Piedmont Healthcare is expanding its already strong presence in the greater Atlanta area with the proposed acquisition of four HCA Healthcare hospitals within 90 miles of Atlanta.
The not-for-profit health system, which is based in Atlanta, announced Monday it plans to pay about $950 million for the facilities, whose operating margins averaged 13.4% in their most recent federal filings. That's well above the 6.7% average operating margin across Piedmont's 11 acute-care hospitals in 2020, according to a Modern Healthcare analysis of cost reports filed with the CMS.
Piedmont CEO Kevin Brown called the deal an "exciting opportunity" in a statement.
"HCA Healthcare has instilled a high standard of care into these facilities, and we are proud that they have trusted Piedmont to continue this legacy," he said. Neither Piedmont nor HCA agreed to comment beyond their news releases.
The deal still needs to undergo regulatory approval, and the organizations said they plan to close on July 31. Georgia Attorney General Chris Carr will not review the proposed transaction, as his office only has purview over not-for-profit hospital deals in Georgia. HCA is a for-profit company.
"So, once Piedmont owns them, any sale or lease would be subject to our review if Piedmont decided to do a transaction in the future," Katie Byrd, attorney general spokesperson, wrote in an email.
Nine of HCA's 185 hospitals were located in Georgia as of Dec. 31, 2020. This transaction includes four of its five hospitals within 90 miles of Atlanta. Most of Piedmont's 11 hospitals are clustered around the greater Atlanta region, except for two in Columbus, a city that borders Alabama.
HCA emphasized its focus on its remaining network of facilities in southeast Georgia, especially with its purchase of Meadows Regional Hospital in Vidalia from Meadows Health Alliance, a deal that closed on Monday.
One of the hospitals Piedmont plans to buy, HCA's Cartersville Medical Center, posted a remarkably high 32.8% operating margin in 2020. The 119-bed Cartersville hospital, which has a level III trauma center and a 43-bed emergency department, is just over 40 miles from Piedmont's Atlanta hospital.
Another hospital that's part of the deal, 310-bed Coliseum Medical Center in Macon, reported a 12.1% operating margin in 2020. It's just under 90 miles from Piedmont's Atlanta hospital. Piedmont also plans to buy HCA's Coliseum Northside in Macon, a 103-bed hospital whose operating margin was 4.2% in 2020. As part of the deal, Piedmont would acquire an ambulatory surgery center in Macon with three operating rooms.
Piedmont also plans to buy HCA's Eastside Medical Center in Snellville, which drew a 4.7% operating margin in 2020 and is located just 30 miles from Piedmont's Atlanta hospital. The facility includes a north campus with 229 acute-cares and a 46-bed emergency department and a south campus with a 61-bed inpatient psychiatric center, a 20-bed inpatient rehabilitation facility and an 11-bed emergency department.
Piedmont's Henry Hospital in Stockbridge is its most profitable, having generated an almost 17% operating margin in 2020. Piedmont's two hospitals in Columbus are its second most profitable, with operating margins of about 13% and 15.6% in 2020. Four of Piedmont's hospitals lost money in 2020, federal filings show.