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April 01, 2016 01:00 AM

WellStar enters Atlanta with $575 million purchase of five Tenet hospitals

Dave Barkholz
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    WellStar Health System of Marietta, Ga., on Friday more than doubled the size of its hospital footprint by completing its purchase of five Atlanta-area hospitals from Tenet Healthcare Corp. and a merger with a not-for-profit hospital west of Atlanta.

    The $575 million cash deal with Tenet provides WellStar with a major presence in Atlanta and brings the number of hospitals operated by the system to 11. WellStar also finalized a partnership with 276-bed West Georgia Health in LaGrange, Ga., about 60 miles from Atlanta.

    WellStar CEO Candice Saunders said Friday that the hospital additions would push revenue for the system to $3 billion next year from about $2 billion in WellStar's 2016 fiscal year that ends June 30.

    “We will continue to do our part to improve access to high-quality, affordable healthcare in the communities we serve,” Saunders said.

    The hospitals sold by Tenet to WellStar are Atlanta Medical Center and its South Campus, North Fulton Hospital, Spalding Regional Hospital and Sylvan Grove Hospital as well as 26 physician clinics. WellStar is a not-for-profit system and Tenet is investor-owned.

    Saunders said physicians and staff at the hospitals system-wide have begun conversations about sharing best practices both operational and clinical.

    Around Marietta, WellStar has established an accountable care organization that participates in the Medicare Shared Savings Program. The model demands a comprehensive care delivery network with data tracking and quality measures aimed at getting patients the right level of care in the right setting.

    WellStar will be able to overlay that approach in Atlanta for the risk-based contracts increasingly favored by private insurers, Saunders said.

    Separately, publicly traded Select Medical Holdings announced that it is selling its contract therapy business to an affiliate of Encore Rehabilitation Services for $65 million in cash and certain other considerations.

    The buyer is Revelstoke Capital Partners, which owns Encore as part of its investment portfolio, Select said in a regulatory filing Thursday.

    Select operates 109 long-term acute-care hospitals, 18 acute medical rehabilitation hospitals and 1,038 outpatient rehabilitation clinics in 31 states and the District of Columbia. As part of the contract therapy divestiture, Select also could receive another $7.5 million in the deal depending on the business meeting certain revenue targets from 2016 to 2018, the company said.

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        • - Value Based Care
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        • - Future of Staffing
        • - Hospital of the Future (Fall)
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