It didn't take long for Atlanta's Piedmont Medical Center to get back in the hunt after a divorce last year from the state's largest not-for-profit healthcare system.
Just 11 months after its separation from Promina Health System, Piedmont announced late last month that it has signed a letter of intent to "explore the possibility" of an affiliation with Rockdale Medical Center, a 111-bed hospital about 30 miles southeast of downtown Atlanta in Conyers, Ga.
It was the second significant strategic shift last month for Piedmont, which is building a growing network to supplement flagship 450-bed Piedmont Hospital and 100-bed Fayette Community Hospital in Fayetteville, Ga.
The system added a third hospital to its network earlier last month when it paid about $40 million to SunLink Health Systems to purchase 35-bed Mountainside Medical Center in Jasper, Ga., about an hour's drive north of Atlanta.
The decision to forge ahead with these new relationships so soon after splitting with five-hospital Promina in June 2003 isn't necessarily contradictory, said Ed Lovern, Piedmont's executive vice president.
He said the system's new independence has allowed its leaders to chart their own course.
"I think we found that being in the Promina relationship wasn't really in our best interest anymore the way it was structured," Lovern said. "This is an opportunity to create a network that is more consistent with our vision of what we want to be in the future. We felt like we didn't have as much participation and involvement-and leadership-in" the Promina system.
He stressed that Piedmont's decision represents the first step in a process that may lead to certain operational and clinical collaborations with Rockdale, including cardiology services, group purchasing decisions and insurance coverage. If a deal is negotiated, he said, Piedmont expects to have an affiliation agreement in place by July 1.
"It's pretty preliminary," said Lovern, a former Modern Healthcare reporter. "We're having these discussions to see if we're even going to have an affiliation agreement. I think it's premature to call what's happening with Rockdale `establishing a system.' We're not considering this an acquisition, or a situation where we've got the dominant relationship. This is being approached as evaluating whether a relationship makes sense."
Michael Rovinsky, president of Integrity Consulting Group in Atlanta and a longtime observer of Georgia's healthcare market, said the letter of intent is the first step in determining whether a long-term relationship will blossom.
"I think the benefit (in first exploring an affiliation) is that sometimes you have to date before you get married, and this is a way to start dating," Rovinsky said.
He said the decision by Piedmont to purchase Mountainside and to court Rockdale is an attempt to create some "critical mass and market leverage" for the system. Piedmont has approximately 8.5% of an intensely competitive market in its principal coverage area of Cobb, DeKalb, Fayette and Fulton counties, hospital officials said.
Despite the location of its flagship facility in the middle of an affluent section in northern Atlanta, Piedmont must turn its attention toward the high-population areas surrounding the city if it hopes to grow as it competes with larger systems, Rovinsky added.
This "strategic expansion," he said, is a way for Piedmont to "secure the main hospital (and its market share) through expanded referral networks while tapping into the growth markets surrounding Atlanta."
In a prepared statement, the leaders of both hospitals were cautious about describing the move as anything more than a collaboration of equals.
David Huber, president and chief executive officer of the Rockdale facility, said he hoped that Piedmont's "expertise will help us enhance our current services and bring new strengths to the Rockdale community." R. Timothy Stack, president and CEO of Piedmont, said he sees considerable potential in developing a "clinical and operational" relationship with Rockdale.