The Georgia Board of Regents voted Friday to approve Wellstar Health System’s potential takeover of Augusta University’s hospitals.
The move advances a deal that is a top priority of Gov. Brian Kemp’s administration that has been at the center of a bitter feud between powerbrokers at the state Capitol.
While the agreement “is not a sale,” Wellstar leaders will take over management and funding of the Augusta University Health System, said Brooks Keel, Augusta University’s president. Wellstar’s board of directors “will step into the shoes” of the AU health system’s board, which also approved the plan this week.
Officials on both sides of the deal said the pact will improve health care access and expand physician training opportunities at the Medical College of Georgia, also part of Augusta University. The health system will be renamed Wellstar MCG Health.
“There’s no doubt in my mind that this new partnership is a win for our state and a win for countless families across our state,” Kemp said in a Friday call with reporters.
The Georgia attorney general must review the plan, which officials expect to finalize by late summer. Federal regulators must also review the hospital merger.
The partnership could save the university millions of dollars. Wellstar will invest nearly $800 million over 10 years in buildings and infrastructure, including more than $200 million for Augusta University Medical Center, the flagship hospital. Wellstar also will fund a new hospital in Columbia County, which the university recently received approval for after a six-year legal battle against competing hospital systems.
The University System of Georgia and Wellstar did not immediately respond to questions seeking further details of the arrangement.
“This has been a long and thorough process,” said Board of Regents chair Harold Reynolds, just before the vote, adding that Wellstar is “the perfect partner.”
Wellstar President and CEO Candice Saunders said the partnership will enhance access to care in rural areas, provide more virtual health care options and train more physicians “to help address the significant shortage of clinicians in our state.”
Wellstar has been criticized for closing two Atlanta-area hospitals in 2022 that served disproportionately lower-income and Black patients. The prosperous, Marietta-based hospital group has said it wasn’t financially feasible to keep those sites open. Local leaders recently announced they were filing two federal complaints against the provider.
The state stepped up negotiations with Wellstar in December in hopes of shoring up the AU system’s teetering finances. But state officials grew concerned that Wellstar could walk if a separate hospital deregulation measure became law.
Lt. Gov. Burt Jones was the force behind a Senate proposal that would allow smaller counties to build hospitals without first obtaining a costly “certificate of need” from state regulators.
Credit: Natrice Miller/AJC
Credit: Natrice Miller/AJC
Jones made clear to Republican leaders that the measure, Senate Bill 99, was a top priority and threatened to block mental health care legislation if it didn’t pass. He told legislators it would pave the way for better access to quality health care in rural Georgia.
He also had personal reasons to back the measure. His family had long advocated for a 100-bed private hospital for a booming area in his native Butts County, a facility that could have been built on his father’s land near a commercial mega-project.
Wellstar adamantly opposed the measure because the proposed hospital could compete with two nearby health care centers it operates — and potentially clear the way for a wave of other new medical facilities that could undercut Wellstar.
Amid opposition from Kemp and House leaders, Jones reluctantly abandoned the overhaul this year. But he orchestrated a series of attempts to punish Wellstar and its allies in other ways.
He backed a Senate plan that initially sought to strip $105 million in higher education funding from Kemp’s spending proposal — the same amount that legislators recently approved for an electronic records system for the medical college that could benefit Wellstar. Legislators later agreed to pare back the cut to $66 million.
Jones also backed an unsuccessful effort to roll back tax benefits that Wellstar receives.
State officials, meanwhile, were adamant about keeping the potential deal between Wellstar and the Augusta health system on track to avoid a wash of red ink on the public ledger. Just last week, Moody’s downgraded the health system’s bonds due to cashflow struggles and a “very weak liquidity position.”
Staff writer Ariel Hart contributed to this article.