Mayo Clinic’s startling decision to pull out of its “integration agreement’’ with Satilla Health Services has left the South Georgia hospital with an uncertain future.
Officials with Mayo’s Florida operation said Friday that they ended the deal with Satilla in Waycross to focus on expanding specialty care for people with complex medical needs.
Mayo said it will concentrate on building relationships with other providers through affiliation models, rather than acquisitions.
The Mayo pullout will return Satilla Regional Medical Center to the status of a standalone hospital at the very time when consolidation of health care facilities is accelerating, propelled partly by changes created under the Affordable Care Act.
“Long-term success as an independent hospital is increasingly difficult,’’ said Chris Kane, a health care consultant with DHG Healthcare in Atlanta.
Kane said Monday that he is not familiar with the Waycross hospital’s situation, but noted that publicly available financial data show the facility had a negative operating margin. “This may have been a factor in Mayo’s decision.”
Three years ago, Mayo Clinic, a renowned Minnesota-based health system, struck an agreement with Satilla Health Services — featuring a 231-bed hospital and two nursing homes — and renamed it Mayo Clinic Health System in Waycross. The South Georgia city is a few miles from the Florida line and only about 80 miles from Mayo’s Florida campus in Jacksonville.
At the time the deal was reached, Robert Trimm, president and CEO of Satilla, cited the economic vulnerability of standalone hospitals at a time when health care is rapidly evolving.
Steering a lone community hospital through those dizzying changes would be ‘‘challenging if not impossible,’’ Trimm said. “We’ll all need a big brother.”
Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in Georgia, said Monday that the Mayo pullout “clearly means [Satilla] has an uncertain future.”
“This came out of the blue,’’ Lewis said. “It would appear that the hospital has been losing increasing amounts of money since the Mayo takeover.”
“It’s a large hospital and a vital hospital for that area,’’ he added.
The hospital facilities are still owned by the Ware County Hospital Authority, and board member Bill Parham told the Florida Times-Union that he heard of Mayo’s pullout after the fact.
“The board has been told nothing,” Parham told the newspaper. “I was a little flabbergasted.”
Parham, who directs emergency medical services for Ware County, said he is disappointed to see Mayo leave.
‘It’s a tragic loss’
“They had brought in a lot of physicians,” were increasing the the types of specialty care available and had raised the level of health care overall, Parham said.
“I believe it’s a tragic loss. I sure am disappointed,” Parham said, according to the Times-Union.
Owen Herrin, past chairman of Satilla Health Services, said in a statement Friday, “I’m very grateful for the positive relationship we’ve had over the past three-and-a half years with leadership, physicians and staff at Mayo Clinic in Florida.
“During this time, Mayo Clinic has helped the hospital achieve advancements in quality of care, and improved hospital facilities by bringing in the latest technology to assist patients,’’ Herrin said. “Along with Mayo Clinic, we are deeply committed to a smooth transition and moving forward to meet the needs of our patients, staff and the region.”
Mayo spokesman Kevin Punsky said Monday in an email to GHN that Mayo Florida’s decision “has absolutely no impact on the ownership of the Satilla assets, which remain as they were prior to Mayo Florida’s involvement.”
The transition will not be immediate, he added.
Asked about the hospital’s future, Punsky said, “The Waycross hospital was viable before Mayo Clinic’s involvement and will continue to be viable after the transition is made back to the community board of directors.’’
Kane, the health care consultant, said Mayo “operates in a rarefied segment of the health care industry. With the Cleveland Clinic [in Ohio], Johns Hopkins [in Maryland] and a few others, Mayo competes for patients and talent worldwide.”
Operating and sustaining community hospitals, he said, “are not the highest and best use of Mayo’s time and capital.”
Beyond its famed medical complex in Rochester, Minn., and campuses in Arizona and Jacksonville, Mayo has a network of clinics and hospitals serving communities in Minnesota, Wisconsin and Iowa.
“Mayo Clinic’s Florida campus has been privileged to work with hospital staff in Waycross, and we are honored to have been a part of the Waycross community,” Dr. Gianrico Farrugia, CEO of Mayo Clinic’s Florida campus, said in a statement Friday.
Eva Byrd, executive director of the Waycross-Ware County Chamber of Commerce, sounded an optimistic note about Satilla’s future.
“Having the Mayo name was a big deal,’’ Byrd told GHN on Monday. But she added, “I think the biggest thing is that it’s the people that made our hospital great. And the people are still here.”