Georgia health systems pursue narrower alliances

Central Georgia Health System, Macon, has created new partnerships with two area hospitals, building off a statewide alliance that stresses collaboration without loss of independence.

CGHS, parent of 659-bed Medical Center of Central Georgia, signed letters of intent to form affiliations with Oconee Regional Medical Center in Milledgeville and Putnam General Hospital in Eatonton. All three organizations will retain local control and work together on expanding services, recruiting physicians and lowering the cost of care in the region.

The deals are separate but similar to non-equity partnerships formed through Stratus Healthcare. Last July, about two dozen hospitals in central and south Georgia—including CGHS, Oconee Regional and Putnam—created the not-for-profit Stratus to help area hospitals share best practices, centralize information technology functions, reduce costs and build population health management experience.

Ninfa Saunders, president and CEO of CGHS, said in a news conference the new hospitals wanted to avoid a top-down management structure and work together to move away from hospital-centric care. Stratus gave them the initial platform to determine where further partnerships could be developed, she said.

Oconee Regional, a 90-bed hospital that has lost $18.4 million from operations the past three fiscal years, has been actively looking for this type of collaboration for a “good period of time,” said Jean Aycock, president and CEO. The same holds true for 25-bed Putnam.

“Management relationships such as these are a path to sustainability for rural hospitals,” Putnam CEO Alan Horton said, noting that the hospital could not afford to expand clinical services without a larger partner.

These types of non-ownership agreements have popped up frequently across the country, with healthcare antitrust experts saying they also present fewer regulatory hurdles than traditional mergers and acquisitions.

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