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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