US Government Board Approves Wellstar Health and Augusta Health Deal

The Georgia University System Board of Regents voted Friday to approve Wellstar Health System’s proposed takeover of Augusta University’s healthcare system.

Wellstar, a nine-hospital system based in Marietta, Georgia, will become the corporate parent of the Augusta Health System, which includes the 600-bed AU Medical Center, Georgia Children’s Hospital, Georgia Cancer Center, Roosevelt Warm Springs Rehabilitation Center, and Specialty Hospitals and medical practice. The deal, which follows other recent healthcare system ties to academic medical centers as they seek to increase clinician recruitment and retention, is expected to close over the summer, pending regulatory approval. In December, the companies signed a protocol of intent.

The deal comes in the wake of the closure of Wellstar Atlanta Medical Center, a 460-bed community care hospital and one of two Level 1 trauma centers in the city. Wellstar closed the hospital in November, crowding out low-income patients and sparking outrage from the public and local and state officials.

Wellstar argued that it was not financially viable to keep the Atlanta Medical Center open. Other area hospitals, such as Grady Memorial Hospital, have since seen increased volumes and increased wait times. A Wellstar spokesman did not say if the Augusta deal would affect Atlanta Medical Center.

In an agreement with Augusta, Wellstar committed to invest approximately $800 million over 10 years in Augusta’s facilities and infrastructure, including the construction of a new hospital in neighboring DC. Joining will increase the number of doctors trained in Georgia and advance research, Wellstar Health System President and CEO Candice Saunders said at a press conference on Friday.

“We will train more doctors to address the significant shortage of doctors in our state,” Saunders said.

According to a Wellstar spokesperson, the Wellstar board will become Augusta’s fiduciary governing body, which would otherwise continue to function as it does today. The Medical College of Georgia will remain independent of the combined organization, the spokesman said.

Wellstar reported an operating profit of $105.8 million on revenue of $4.57 billion in fiscal year 2022 ending June 30. This is less than $377.1 million in operating income on revenue of $4.25 billion in fiscal 2021. The company’s cash on hand dropped from 208 days to 160 days. over this gap.

Augusta, which has annual revenues of about $1.1 billion, has posted operating losses in each of its last three financial years.