Hospital consolidation has heated up again in metro Atlanta, as Emory Healthcare and Southern Regional Health System have entered talks about a possible partnership....

Hospital consolidation has heated up again in metro Atlanta, as Emory Healthcare and Southern Regional Health System have entered talks about a possible partnership.

The discussions were first reported in an Atlanta Business Chronicle story.

Emory issued a statement Friday that confirmed the talks with Southern Regional. “During the past several weeks, discussions have taken place between our organizations regarding possible affiliation options, and those conversations are continuing,’’ the statement said.

Earlier this year, Emory completed a partnership deal with Saint Joseph’s Hospital in Atlanta.

Southern Regional Medical Center, a 331-bed Riverdale hospital, has been financially challenged in recent years. The Business Chronicle said last year that the hospital reported nearly $40 million in operating losses from fiscal 2007 to fiscal 2009.

A hospital spokesman could not be reached for comment Friday.

Hospital consolidation is a national trend, driven by several factors. Part of it involves hospitals aiming to cut costs in an era when they face possible declining reimbursements for services.

And the health care reform law, though its own fate remains uncertain, has ignited the trend toward revamping the health care payment system, so the value of services gets rewarded — not the volume of services delivered.

“It’s all changing,’’ said Piedmont CEO Tim Stack at a recent forum. “It’s not going back.’’ (Here’s a recent GHN article about payment reform.)

Piedmont has been a leader in metro Atlanta hospital consolidation. The system, which already had facilities in Fayetteville, Newnan and Jasper, recently completed an alliance with Henry Medical Center in Stockbridge.

“All of the players in this market are looking for a geographical spread,’’ said Charles Goldberg, an Atlanta-based health care consultant.

“Single community hospitals are going to be standing alone if they’re not linked up with a larger health system.’’

Emory could benefit from an alliance with Southern Regional by gaining referrals for its specialty care, Goldberg said.

Southern Regional could gain from new access to Emory’s physicians, clinical data systems and strong market reputation, he added.

Such partnerships and mergers have occurred across the state. Recently, in South Georgia, the prestigious Mayo Clinic took control of a health system in Waycross as the result of a merger. Satilla Health Services — featuring a 231-bed hospital and two nursing homes — has been renamed Mayo Clinic Health System in Waycross.

This GHN article describes the impact of Mayo’s entry into Georgia.


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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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