Another Georgia hospital system has connected with an out-of-state entity in a deal that appears to buttress the concept that in health care, bigger is better.
This time, the connection is not very far away as the crow flies.
Floyd Healthcare Management, which runs Floyd Medical Center in Rome and a hospital in Polk County to the south, has now assumed the management of Cherokee Medical Center in Centre, Ala. That’s about 30 miles from Floyd’s home base in Rome.
Georgia’s Floyd County, where Rome is located, and Alabama’s Cherokee County, where Centre is located, are adjacent to each other, with the state line forming the boundary between them.
The Alabama hospital has a new name, Floyd Cherokee Medical Center.
Earlier this year, Navicent Health in Macon announced it’s discussing a “strategic combination’’ with Charlotte-based Atrium Health. And HCA, a Tennessee-based hospital chain, recently acquired Memorial Health in Savannah.
Such deals make sense for hospitals, experts say, citing cost savings for items such as supplies and IT services. And they put hospital systems in better bargaining position when discussing contract terms with health insurers.
But aside from national hospital chains such as HCA and Tenet owning hospitals here, it’s rare that Georgia nonprofit hospitals have reached across state lines.
The Alabama combination took a few steps. The Cherokee County Health Care Authority (CCHCA) purchased substantially all assets related to the operation of Cherokee Medical Center, along with medical office buildings, physician clinics and outpatient care facilities, from its current owners.
After the sale, the hospital real estate was transferred to CCHCA, which in turn leased the hospital property to a Floyd Healthcare subsidiary, while the other assets of the hospital were transferred from the current owners directly to the new Floyd company.
Floyd Cherokee Medical Center “is an asset to our community, and it is important that this authority and our community do everything we can to make sure that it continues to be here to serve our residents and visitors,” said Eric Ellis, CCHCA chairman, in a statement. “We believe this lease and operations agreement with Floyd will help us to do that.”
The new hospital administrator, Brandon Reece, previously served as financial operations director of Floyd Medical Center’s Emergency Care Center.
Floyd also operates Polk Medical Center, a 25-bed critical access hospital under a lease agreement with the Cedartown Polk Hospital Authority. And Floyd already has a significant presence in Cherokee County, Ala., with primary care and urgent care operations there.