Piedmont Healthcare, fresh off adding an Athens hospital, is turning south in seeking a partner in Georgia’s second-largest city.
The Atlanta-based hospital system said Tuesday that it has entered exclusive partnership talks with Columbus Regional Health. That system operates three major facilities in Columbus — Midtown Medical Center, Northside Medical Center and the John B. Amos Cancer Center — as well as urgent care centers and multiple physician practices.
Nonprofit Piedmont added Athens Regional Medical Center as its seventh hospital in October.
Columbus, with its location just across the Chattahoochee River from Alabama, and roughly at the midpoint between the northern and southern halves of Georgia, is traditionally the gateway to a large area that is far from Piedmont’s Atlanta-area base. If the new deal is completed, Columbus Regional would become Piedmont’s regional hub for clinical services in Southwest Georgia.
The talks continue the consolidation that has ripped up the hospital map of Georgia in recent years.
Hospital systems are looking to gain size in order to wield more clout in negotiations with health insurers for payments for services. They’re also looking to cut costs, and save on purchasing supplies and equipment.
WellStar Health System, based in the Atlanta suburb of Marietta, and HCA, a Nashville-based hospital chain, have also completed major deals recently in Georgia. (Here’s a GHN article on HCA’s recent deal with a Savannah hospital.)
“We share a commitment to high-quality, patient-centered care with Columbus Regional and welcome this opportunity to increase access and enhance care across Southwest Georgia,” said Kevin Brown, president and CEO of Piedmont Healthcare, in a statement. “Columbus Regional has a rich history of caring for its community and region, and we are thrilled to start working on a partnership with an organization that shares so many of our values.”
It’s not the first talks that Piedmont has held with a Columbus hospital. Piedmont had looked into a partnership with St. Francis Hospital before the talks collapsed two years ago.
Scott Hill, Columbus Regional Health president and CEO, noted Tuesday in a statement that his system has been seeking a partnership or affiliation for a year.
Over that time, he said, “we have maintained our position of strength financially and we continue to realize improvement across many areas of our health system. We believe that now is the time to combine our strengths through a strategic partnership. This will allow us to serve our patients and the community to the highest degree possible.”
Warren Steele, chairman of the board of Columbus Regional, added in a statement that “this decision was made after a comprehensive, yearlong process to evaluate the benefits for our patients, for our employees, our medical staff, and most importantly, for our community. Based on the core goals and objectives we laid out before we began our process, we are confident Piedmont is the right fit for us.”
Both Columbus hospital systems have run into recent financial trouble.
In September 2015, the state attorney general announced that Columbus Regional and other related entities had agreed to pay Georgia and the United States up to $35 million to resolve allegations of false Medicaid claims.
Right afterward, the Columbus Ledger-Enquirer reported that St. Francis had been told by the feds to repay $21.4 million and make major changes in the way it did business.
The federal audit report came 10 months after St. Francis said it could not account for about $30 million on its financial books.
Brentwood, Tenn.-based LifePoint Health acquired St. Francis in January 2016.
Besides its flagship hospital in Atlanta’s Buckhead neighborhood, and its Athens facility, Piedmont runs hospitals in Fayetteville, Newnan, Stockbridge, Covington and Jasper. And in February, Piedmont said it would operate 27 retail health clinics in Walgreens stores across the Atlanta area.
Chris Kane, a consultant with DHG Healthcare, said Piedmont “has a strong track record in adding hospitals.’’
For Atlanta-based health systems, “the geographic aspirations have expanded,” Kane said. “Piedmont and WellStar have been aggressive with hospital transactions, and Northside [in Atlanta] has broadened its footprint with its physician network.’’
“As in any transaction, the marriage is more important than the wedding,’’ he said. “Success demands integration of the clinical programs, cultures, information technology and brands.”
Columbus Regional Health’s Midtown Medical Center provides the region’s only advanced maternity services and neonatal intensive care unit; a Children’s Hospital, including a pediatric intensive care unit; and a neuroscience center for spine and stroke care.