The parties have signed a letter of intent, but the agreement is still in negotiations and decisions are not final.
Depending on final decisions, a partnership potentially could give Wellstar control of Augusta University’s flagship hospital, Augusta University Medical Center, as well as its medical practices in the surrounding area, and any new hospital that the AU Health System would build in the future. A source familiar with the talks leading up to Tuesday’s announcement said they have discussed such an arrangement.
Augusta University Health System is part of Augusta University, and ultimately under the control of the Board of Regents, which oversees the University System of Georgia.
The Board of Regents said in a statement that it was exploring a partnership to provide “more opportunities for students of the state’s only public medical school to learn and train” while working with Wellstar to improve patient care.
AU Health System includes Augusta University Medical Center and Children’s Hospital of Georgia. The system also runs the Georgia Cancer Center and Warm Springs Hospitals, as well as dozens of primary care and specialty doctors’ offices. In addition, AU Health System has been approved to open a new hospital in Columbia County. Part of Columbia County was recently named the #1 Best Place to Live by Money.com, formerly Money Magazine.
While Wellstar did not issue a separate announcement, CEO Candice Saunders said in the university’s announcement that if completed, the partnership would help patients around the state. By “leveraging our respective strengths, we would improve the health of the community, address social determinants of health and expand access to quality care for all Georgians,” Saunders said.
Wellstar just this year closed down two Atlanta hospitals that served a disproportionately lower-income and Black population, Atlanta Medical Center-South in East Point and the main Atlanta Medical Center in downtown Atlanta. Wellstar said its decision to close the AMC locations was necessary because the hospitals were losing too much money.
If Wellstar takes financial responsibility for AU Health System, the arrangement could prove more profitable for Wellstar than running AMC was. Even without expansion into Columbia County, AU Health System already serves a hospital clientele better able to pay medical bills than those Wellstar served at AMC, according to documents filed with the state describing the financial situation in 2019. Augusta University Medical Center reported nearly $60 million in operating income in 2018, though in 2020 that fell to an operating loss of more than $30 million, according to its most recent financial statements.
Augusta University Health System recently won a court battle to build a new hospital in a sought-after area in Columbia County, located adjacent to Richmond County and Augusta.
If Wellstar does take over AU Health and a hospital is built in Columbia County, that could be an additional financial boon. Money Magazine in 2020 named a Columbia County city, Evans, as the No. 1 best place to live. “Of all the U.S. towns and cities we looked at this year, Evans had the lowest cost of living of any place with similarly high income levels,” Money stated.
If such a takeover were to happen so quickly after Wellstar’s closing of the two AMC hospitals, it would raise questions about Wellstar’s motives for running hospitals at all, said the former chief of the medical staff at Wellstar Atlanta Medical Center, Dr. Mark Waterman.
“I thought their prime prime goal was the health care of metro Atlanta,” Waterman said. “So it’s concerning.”
Where Atlanta Medical Center’s two hospitals in downtown Atlanta and East Point admitted patients who had no insurance 15% of the time, AU’s patients had no insurance just 11% of the time, according to figures filed by the health systems in 2019. Similarly, AU’s patients were on Medicaid, a low-reimbursement government insurance, less often than AMC’s.
But when it came to more lucrative private insurance, 22% of AU’s patients had such insurance policies, compared to only 16% of AMC’s, according to the 2019 figures.
Augusta University Health System also touts its connections to such elite local organizations as Augusta National Golf Club.
According to the 2019 documents, where nearly 70% of AMC’s admitted patients were Black and 23% white, at Augusta University Medical Center just under half are white and just under half are Black.
Another hospital in Augusta joined with an Atlanta-area hospital system, Piedmont Healthcare, earlier this year. Piedmont Healthcare affiliated with University Healthcare in Augusta. The names are similar but University Healthcare is not related to Augusta University Health System and is not a University System of Georgia system.
Metro Atlanta hospitals have all consolidated under major hospital systems. That allows the systems to better negotiate higher prices with insurance companies.
Staff writer Eric Stirgus contributed to this report