A Macon hospital system, fresh off forging a strategic partnership with a Milledgeville organization last week, announced a similar agreement Monday with Putnam General Hospital in Eatonton.
Ninfa Saunders, CEO of Central Georgia Health System and the Medical Center of Central Georgia, said the Putnam County partnership, like the one in Milledgeville, will have a yet-to-be-determined financial component to it, but falls far short of a merger.
Alan Horton, CEO of the Eatonton hospital, which has been struggling financially, told GHN on Monday that it had been seeking a strategic partner for a while. “Small independent rural hospitals are going to have difficulty surviving on their own,” he said.
The two organizations have signed a letter of intent to create a management services agreement. “We’re all excited about the relationship [that can] help ensure the long-term viability of the hospital,’’ Horton added.
The increasing pace of hospital consolidation over the past two years reflects the uncertainty and continual change roiling the health care industry, partly driven by the Affordable Care Act, analysts say.
Saunders said the goals include expanding medical services in the Eatonton area and retaining and recruit local physicians.
“We get patients from Putnam and Eatonton,’’ Saunders said. “We will develop this market. We will move pretty quickly.’’
The Macon organization can’t create partnerships with every struggling hospital, she added. “What we’re looking for is a strategic fit and an ability to turn around these organizations.”
“You’ll see consolidation and also closure of hospitals,’’ Saunders said.
(Recently, for instance, Lower Oconee Community Hospital closed its doors for the second time this year. Read the GHN article on the closure.)
Horton said the relationship with the Medical Center of Central Georgia can help the 25-bed Putnam reduce its operating expenses and grow its revenues. Putnam, a critical access hospital, also talked with other hospitals about a partnership, he said, but the Medical Center “seemed to be the best fit.’’
The Medical Center and Putnam General Hospital are members of Stratus Healthcare, an alliance of health systems, hospitals and physicians formed a year ago. Horton and Saunders said the Stratus connection helped pave the way for the partnership agreement.
Last week, the Macon system announced a partnership with another Stratus member, Milledgeville-based Oconee Regional Health Systems.
That system’s Oconee Regional Medical Center was also experiencing financial trouble, and recently suffered a credit downgrade from Standard & Poor’s from B to CCC.
(Oconee Regional is not connected to the just-closed Lower Oconee facility.)