Two hospital systems in Middle Georgia announced Tuesday that they intend to form a partnership, in a move that reflects the constant consolidation of health care organizations.
The deal will not be a merger or acquisition, but it will have some financial aspect to it, said leaders of Milledgeville-based Oconee Regional Health Systems and Macon-based Central Georgia Health System.
Ninfa Saunders, CEO of Central Georgia and the Medical Center of Central Georgia, said the partnership’s primary goal is to improve the value of health care for patients, medical providers and insurers.
“This partnership will allow our health system to keep its identity intact while greatly enhancing the patient-focused health care we have provided our local residents for so many years,” Jean Aycock, CEO of Oconee Regional Health Systems and Oconee Regional Medical Center, said in a statement.
The nonprofit Milledgeville hospital, though, recently suffered a credit downgrade from Standard & Poor’s from B to CCC.
“ORMC’s operating and financial profile have weakened steadily in the past several years, with utilization declines, decreased revenue, and (more recently) declining unrestricted reserves,’’ Standard & Poor’s said in March.
Aycock acknowledged Tuesday the “financial pressures’’ that many Georgia hospitals are facing.
The Macon and Milledgeville hospitals are roughly 30 miles apart.
Both nonprofit organizations are already members of Stratus Healthcare, a network of health systems, hospitals and physicians formed a year ago. But Saunders said that while Stratus members do not share equity, the new alliance would have “some components that are financial,” though it would clearly be short of a merger.
Saunders said a goal of the partnership is to increase community access to services and coordination of care. The two organizations aim to develop joint medical services and programs.
“We have a great relationship,’’ Aycock said. “We share patients and geography,’’
She added that it’s not a completed deal at this time. Discussions between the the two health care enterprises have been under way for months.
Chris Kane, an industry consultant, said Tuesday that with such an alliance, the larger entity – Central Georgia –can preserve the level of patient referrals for specialized care that it gets from the smaller Oconee Regional, while the latter “gets additional resources and credibility.”
Oconee Regional can also gain from group purchasing and marketing resources, Kane said.
The wave of hospital consolidation over the past two years reflects the uncertainty and continual change in health care, partly driven by the Affordable Care Act, he said.
“Health care is like a middle school dance, where the music is playing, and you’re sizing up partners across the room,’’ Kane added.
Starr Purdue, chairman of Central Georgia Health System’s board of directors, said in a statement, “As the face of health care continues to change, strategic alignments with community partners will ensure the viability and longevity of health care providers.’’