A Charlotte-based health care system has finalized a deal to acquire a nonprofit hospital organization based in Rome.
Floyd Medical Center, a hospital in Cedartown and one in Alabama will now become part of Atrium Health under the long-delayed agreement, announced Wednesday.
It’s the second big foray into Georgia for Atrium Health, which in 2018 acquired the Navicent system in Macon. Atrium may now look to expand further in the state, experts say.
The deal continues a recent flurry in Georgia of hospital system acquisitions, pending or finalized, involving large organizations such as Atlanta-based Piedmont, Tennessee-based HCA and Florida-based AdventHealth.
One of these acquisitions is also taking place in Rome, with AdventHealth scheduled to acquire the other large hospital in the city, Redmond Regional Medical Center, from HCA.
The latest deal comes shortly after President Biden ordered the Federal Trade Commission and the Department of Justice to review hospital mergers to ensure they do not harm quality of care and raise prices.
The presidential order, announced Friday, is the latest example of scrutiny from the federal government over mergers and acquisitions in the medical industry, Fierce Healthcare reported.
Hospital groups said the order could add more bureaucratic red tape to mergers that are already vetted by other government agencies.
“It is important to stress that hospital mergers and acquisitions undergo an enormous amount of rigorous scrutiny from the federal antitrust agencies and state attorneys general,” said Rick Pollack, president and CEO of the American Hospital Association, in a statement Friday.
The Biden order said that lack of competition in health care can lead to price increases without improving quality of care.
Foundation part of deal
The Atrium deal includes a pledge to invest $650 million in capital for Floyd over the next decade “to enhance capabilities, skills and talent, facilities and technology.’’ It will lead to the creation of a new Floyd-Polk Healthcare Foundation, When fully funded, the foundation is expected to total more than $150 million in assets, and plans to address disparities in care in the region as part of its mission.
Atrium Health now has 40 hospitals and more than 1,400 care locations across the Carolinas, Georgia and Alabama.
It will now operate Floyd Medical Center; Polk Medical Center, a 25-bed critical access hospital in Cedartown; and Cherokee Medical Center, a 60-bed acute care hospital in Centre, Ala. Also included are a 53-bed behavioral health center in Rome, eight urgent care sites and more than 20 primary care offices.
“This is a historical milestone in the history of both of our organizations,” Eugene A. Woods, president and CEO of Atrium Health, said in a statement. “We look forward to making significant investments in the health of the communities served by Floyd through working with the dedicated leadership team and talented medical community to implement the latest technological advancements, achieve the best clinical outcomes and expand the breadth of services we provide.”
Atrium Health and the Floyd health system announced their intent to combine in November 2019, but officials said the COVID-19 pandemic slowed the process. Final approval for the combination was given Monday by the Georgia Attorney General’s Office.
“What impressed me from the first meeting with Atrium Health’s leadership is how alike we are in our commitment to clinical excellence, service to the community and, especially, a mission that embraces caring for all,” Kurt Stuenkel, the Floyd Medical CEO, said in a statement. “Being part of Atrium Health will allow us immediate access to the best minds and resources of a highly regarded, growing, academic health system that will help ensure quality, accessible health care is available in our community for decades to come.”
Stuenkel will remain CEO of Floyd, and serve on the executive team of Atrium Health, reporting to Woods. The Floyd facilities will retain their respective local governing boards, with Atrium Health being allotted two seats on the Floyd Healthcare Management Inc. board of directors.
Floyd will also nominate a member to the Charlotte-Mecklenburg Hospital Authority board of commissioners, as well as two members to governance committees for Atrium Health.