Piedmont Healthcare has added Augusta to its expanding hospital footprint.
The Atlanta-based nonprofit system now contains 19 hospitals, with the announcement Tuesday that it has taken over University Health Care System, which includes University Hospital in Augusta.
Other hospitals in the agreement are smaller facilities: University Hospital Summerville and University Hospital McDuffie. The two systems had announced in May that they had signed a letter of intent to seek an affiliation.
Piedmont last year acquired four hospitals from HCA for $950 million: Cartersville Medical Center, Eastside Medical Center in Snellville and Coliseum Medical Centers and Coliseum Northside, both in Macon.
Through these takeovers, Piedmont has greatly surpassed the number of hospitals held by other systems in Georgia, including Emory Healthcare and Wellstar Health System.
“They are going to be a force throughout Georgia,’’ said Dave Smith, a consultant with Kearny Street Management, who added that Piedmont may want to get even bigger.
Piedmont, when asked about plans for future growth, said in statement later Thursday, “We will continue to develop our network of care options to ensure that Georgians have access to high-quality, cost-effective care close to home.”
By its expansion, Piedmont is consolidating its power to reach contracts with insurers.
Contract negotiations between health systems and insurers used to be routinely resolved before prior agreements expired, even if the bargaining was contentious. But in recent years, an increasing number of these disputes have not settled in time, severing network relationships and leaving patients caught in the middle.
Wellstar, based in Marietta, has been out of network with UnitedHealthcare since October, while Anthem Blue Cross Blue Shield and Northside Hospital have not been able to reach a contract deal, despite a Fulton County court’s intervention.
“I think Piedmont feels they have leverage’’ in such contract battles, Smith said. “They’ve done a great job positioning themselves for a showdown” with insurers.
Still, Piedmont will face a challenge in managing 19 hospitals, Smith said.
A bigger hospital system, though, can save money in purchasing medical supplies, experts say.
University Health Care System serves the greater Augusta region, anchored by University Hospital, founded in 1818 as City Hospital. The system includes University Hospital Summerville, also in downtown Augusta, and University Hospital McDuffie in rural Thomson.
“Piedmont’s model is to provide comprehensive care close to home, and we are excited that a great system like University Health Care, which has been doing that for more 200 years, is joining with us,” Kevin Brown, Piedmont president and CEO, said in a statement Tuesday.
“Our focus is always on changing health care, making it easier, more seamless and removing the hassle, which is what we will bring to this partnership.”
University also operates two skilled nursing and rehabilitation centers, and serves ambulatory patients with physician practices and Prompt Care centers in downtown Augusta, Evans, South Richmond County and Grovetown in Georgia, and in Aiken and North Augusta in South Carolina.
The agreement will include an infusion of $1 billion in capital to modernize and update facilities and grow the Heart and Vascular Institute tower at the newly named Piedmont Augusta Hospital, the Augusta Chronicle reported. The affiliation also includes $2 million a year for 10 years to address community health care needs, such as supporting clinics and other initiatives, the newspaper reported.
“Today, we celebrate the beginning of a new chapter in the history of University Health Care System,” James Davis, president and CEO of Piedmont Augusta and Piedmont McDuffie, said in a statement. “We are excited about the many possibilities and new opportunities the partnership with Piedmont will bring to our patients, employees, physicians and the community. Becoming Piedmont ensures we secure high-quality care in our community into the future. This has been our commitment for 204 years, and we’re excited the tradition of excellence will continue.”