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The University System of Georgia Board of Regents voted Friday to approve Wellstar Health System’s proposed takeover of Augusta University Health System.
Wellstar, a nine-hospital system based in Marietta, Georgia, would become the corporate parent of Augusta Health System, which includes the 600-bed AU Medical Center, the Children’s Hospital of Georgia, the Georgia Cancer Center, the Roosevelt Warm Springs Rehabilitation and Specialty Hospitals and a physician practice. The transaction, which follows other recent health system affiliations with academic medical centers as they aim to bolster clinician recruitment and retention, is expected to close in the summer, pending regulatory approvals. The companies signed a letter of intent in December.
The deal comes on the heels of Wellstar closing Atlanta Medical Center, a 460-bed safety-net hospital and one of two Level 1 trauma centers in the city. Wellstar shut down the hospital in November, displacing low-income patients and provoking outcry from the community and from local and state officials.
Wellstar maintained that it wasn’t financially sustainable to keep Atlanta Medical Center open. Other area hospitals, such as Grady Memorial Hospital, have since experienced higher volumes and longer wait times. A Wellstar spokesperson did not say whether the deal with Augusta would have any impact on Atlanta Medical Center.
Under the agreement with Augusta, Wellstar pledged to invest nearly $800 million over 10 years in Augusta facilities and infrastructure, including building a new hospital in nearby Columbia County. The affiliation would increase the number of physicians trained in Georgia and advance research, Wellstar Health System President and CEO Candice Saunders said during a news conference Friday.
“We will train more physicians to help address the significant shortage of physicians in our state,” Saunders said.
The Wellstar board would become the fiduciary governing body for Augusta, which otherwise would continue to operate as it does today, the Wellstar spokesperson said. The Medical College of Georgia would remain independent from the combined entity, the spokesperson said.
Wellstar reported $105.8 million in operating income on $4.57 billion of revenue in fiscal 2022, which ended June 30. That was down from $377.1 million in operating income on $4.25 billion of revenue in fiscal 2021. The company’s days cash on hand dropped from 208 to 160 over that span.
Augusta, which generates roughly $1.1 billion in annual revenue, recorded operating losses for each of its last three fiscal years.
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