Wellstar, AU Health reach deal on merger plans
AUGUSTA, Ga. (WRDW/WAGT) - Wellstar and Augusta University have reached an agreement that will bring AU Health under the Wllestar umbrella.
It’s not a surprise, since the organizations announced the plans several months ago.
but it wasn’t until Friday that state regents approved agreements to transfer control of the 478-bed AU Medical Center and 154-bed Children’s Hospital to Marietta-based Wellstar. Wellstar will also control a 100-bed hospital in Columbia County that AU Health has won approval to build.
The deal may take effect in late summer.
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AU President Brooks Keel said Wellstar would take over as the controlling legal entity of the health system, which will now be known as Wellstar MCG Health, referring to the university’s Medical College of Georgia.
In addition to AU Medical Center and Children’s Hospital of Georgia, AU Health runs the Georgia Cancer Center in Augusta and Roosevelt Warm Springs Rehabilitation and Specialty Hospitals and owns physician practices.
Wellstar runs nine hospitals in suburban Atlanta, but closed two hospitals in Atlanta in the past year.
It said it has pledged to invest nearly $800 million in AU Health facilities, including more than $200 million for the main Augusta University Medical Center, plus building the new hospital in Columbia County and associated facilities.
Wellstar also said it would spend additional money on the implementation of a new medical records system that the state is spending $105 million on.
The two sides said in December that the deal could also result in a further expansion of the Medical College of Georgia by creating a new regional campus at Wellstar Kennestone Hospital in Marietta.
The move is one of many hospital mergers in Georgia and nationwide, as standalone hospitals combine into large systems. That helps them afford massive investments but also gives them the market power to negotiate more lucrative payment agreements with insurers.
Atlanta-based Piedmont Healthcare took over University Health System in Augusta last year.
In the 2021 budget year, AU Health lost $28 million on $1.06 billion in revenue — which is the most recent year for which a state audit is available. Revenue included $30 million in state appropriations. The system has lost $63 million overall since 2017, audits show.
Gov. Brian Kemp and University System of Georgia Chancellor Sonny Perdue pushed hard to conclude the deal, driven by concerns over the financial struggles of AU Health.
“This is an important day for health care in Georgia. I am excited for the benefits that this partnership will provide our state,” Kemp said.
AU said the partnership will focus on five areas to create a healthier future for Georgia: Access to expertise, raising the number of physicians trained in Georgia, creating new and innovative care offerings, pediatric care and digital health.
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