(AP Photo/John Russell)
Photo: JOHN RUSSELL
Photo: JOHN RUSSELL

Firm reaches deal to negotiate taking over Vidalia’s public hospital

A private hospital company has signed a contract to work toward taking over the public hospital in Vidalia.

The company, HCA, or Hospital Corporation of America, already owns the major hospital in Savannah and one in Waycross. Adding the hospital in Vidalia would give HCA dominance in several counties near coastal Georgia.

The agreement between HCA and the Vidalia hospital’s nonprofit parent, Meadows Health, would include the hospital, its cancer center and outpatient facilities, and, importantly, its network of physician practices.

“The Meadows Health Board is comprised of community members who are passionate about ensuring that our health system remains stable, strong and growing despite the increasingly challenging dynamics in healthcare,” Meadows Health Board Chairman Mike Calhoun said in a statement announcing the agreement.

The statement does not specify whether HCA will buy the hospital or work out some other arrangement but says they are working toward alignment.

The current contract is a letter of intent. HCA and Meadows will now begin a period of due diligence and negotiate a “definitive” agreement, the two organizations said in a joint statement. When they have a deal, they will file it with the state Attorney General’s Office and hold a public hearing about it in Vidalia.

Having a public hospital means having public input and more transparency in what the hospital does, but it also carries risks for taxpayers. Meadows Health and its affiliates were hit in 2017 with a $12.9 million settlement by the U.S. Department of Justice and the state over allegations they were illegally paying doctors to refer patients to them.

Running a hospital also isn’t cheap. Health costs are rising much faster than overall inflation. Meadows CEO James Alan Kent was paid $929,000 in reportable compensation in 2017, according to tax forms, the latest year public forms are available. That is less than the top doctor was paid. (The hospital notes the CEO’s pay was usually half that amount but that year he received a one-time payout.)

About the time HCA bought Memorial University Medical Center, by far the largest of three hospitals in Savannah, Memorial had run staggering losses, up to $44 million one year.

The biggest concern analysts often have for an area when hospital consolidation occurs is that prices will rise as competition decreases. A dominant hospital system can use its leverage as the only game in the region to raise prices substantially. But a spokeswoman for Meadows wrote in an email that “we would expect that cost to our patients would remain largely unchanged.”

The spokeswoman, Elizabeth Harvill, said patients with private insurance generally have out-of-pocket costs set by the insurance plan, and rates with Medicare and Medicaid are set by government. For uninsured patients, she said, HCA’s charitable care policies are “more generous than many hospitals in Georgia.”

She did not address costs to insurance companies, which filter down to patients in premium prices.

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