An Atlanta-area hospital system has completed its takeover of Augusta University's hospitals
An Atlanta-area hospital system has completed its takeover of Augusta University’s hospitals, with the University System of Georgia and Wellstar Health system saying the deal promises greater financial stability, more medical training and better care.
Marietta-based Wellstar assumes control of the 478-bed Augusta University Medical Center and 154-bed Children’s Hospital of Georgia, as well as the rights to build a 100-bed hospital in suburban Augusta. The hospitals are key training grounds for the Medical College of Georgia, the state’s only public medical school.
“We’re taking the clinical advantages of a modern hospital network — Wellstar — and merging them with one of the best medical education academic centers in the country, the Medical College of Georgia,” University System Chancellor and former Georgia Gov. Sonny Perdue told The Associated Press in a Tuesday interview. “And we think both of those are going to equal more than the sum of their component parts for healthcare in Georgia.”
Wellstar is also taking over the Roosevelt Warm Springs Rehabilitation and Specialty Hospitals.
Both Georgia’s attorney general and the Federal Trade Commission cleared the takeover to proceed.
As part of the 40-year deal, Wellstar is assuming $234 million in debt and will pay the university system at least $111 million to use the Medical College of Georgia name. Formerly Augusta University Health System, the hospitals will now be called Wellstar MCG Health.
Augusta University President Brooks Keel said patients, employees and students won’t notice many changes at first, but he and Wellstar CEO Candice Saunders said improvements will come.
“The partnership is designed to grow and expand care and to build on both of our healthcare strengths as well as them bringing in the research and the educational mission,” Saunders said.
Wellstar has agreed to invest up to $797 million in the system. That includes $395 million to build the new hospital and medical office building in Grovetown. Keel said sitework is underway and the hospital will open in 2025 or 2026.
Wellstar will spend $201 million at the existing Augusta hospitals in the first 10 years of the deal. If the Augusta hospitals have at least a 2% profit margin, Wellstar would invest another $201 million.
Investment includes Wellstar implementing an electronic medical record system. State government is also contributing $105 million for the system, which Perdue said will help the hospitals collect more revenue.
Wellstar could pay the university system more if MCG Health operations are sufficiently profitable — between $5 million and $15 million a year. Regents agreed to spend that money to improve the Medical College of Georgia, Augusta University or the health of Georgians, in consultation with Wellstar.
University system officials have been eager to shed financial responsibility for the health system while maintaining medical training. Keel, in a June hearing, described the health system’s financial situation as “not good.” After years of seeking merger partners, Wellstar was the only suitor willing to take over.
Some Atlanta-area leaders have fought the deal, saying Wellstar illegally discriminated against Black people and violated its tax-exempt status when it closed hospitals in downtown Atlanta and a southern suburb.
Wellstar promised to maintain core services in Augusta for at least 10 years, including an emergency room, a top-level trauma center, a top-level neonatal intensive care unit, a pediatric intensive care unit, and cancer and stroke treatment.
The Medical College of Georgia agreed to work with Wellstar to create a medical school campus at Wellstar’s Kennestone Regional Medical Center in Marietta by as early as mid-2025. Saunders said work has begun to seek accrediting approval, but said applications could not be submitted until after the deal closed.
Wellstar and the Medical College of Georgia are also pledging to increase telehealth, making more medical specialists available to rural Georgians.
“We’re going to bring more modern IT and infrastructure as well as modern digital capabilities to expand to the areas of most need, but we’re really going to be building on the strong work that MCG has pioneered for years,” Saunders said.
Wellstar can extend the deal for a second 40 years. For the first 10 years, the regents could buy back the hospitals if Wellstar sought to convey control to a for-profit entity or a nonprofit based outside Georgia.
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