With 3 more hospitals, Piedmont Healthcare strengthens presence in Georgia

With the acquisition of the University Health Care System, Piedmont Healthcare continues to strengthen its position in Georgia.

This week, Piedmont completed the merger of University Health Care and its three hospitals in northern Georgia. The University system was anchored by University Hospital in Augusta, and also includes University Hospital Summerville and University Hospital McDuffie.

The three hospitals will now be known as Piedmont Augusta Hospital, Piedmont Augusta Hospital Summerville Campus, and Piedmont McDuffie Hospital.

Piedmont now operates 19 hospitals, more than any system in the state of Georgia. The Piedmont system says its reach covers 70% of Georgia’s population.

Just a year ago, Piedmont acquired four hospitals from HCA Healthcare for a price of about $950 million.

Piedmont and University Health Care announced a letter of intent to merge in May 2021. Piedmont said it would invest $1 billion into University’s facilities.

In addition to the hospitals, Piedmont also acquired University’s two skilled nursing and rehabilitation centers and a host of physician practices.

Piedmont President and CEO Kevin Brown said in a statement that he’s excited about the merger with University.

“Our focus is always on changing healthcare, making it easier, more seamless and removing the hassle, which is what we will bring to this partnership,” Brown said in a statement.

James Davis, president and CEO of Piedmont Augusta and Piedmont McDuffie, said the affiliation offers new opportunities for patients, employees and doctors.

“Piedmont Augusta and Piedmont McDuffie are both well positioned for growth,” Davis continued. “Being trusted by Piedmont to serve as their Augusta clinical hub for healthcare is a huge vote of confidence, and it took a lot of work to get to this day. It’s nice to celebrate and make it official.”

The deal drew some opposition. In July, National Nurses United asked the Federal Trade Commission to investigate Piedmont’s plans to acquire the HCA and University hospitals. The union argued that Piedmont’s expanded presence could lead to higher hospital prices in Georgia, and a potential reduction in the quality of care as the hospital market becomes more consolidated.

President Biden’s administration has given more scrutiny to hospital mergers. In an executive order to promote competition in the private sector, Biden called on the FTC and the Justice Department to enforce antitrust law vigorously. The White House also called for federal authorities to pay close attention to the healthcare market, including hospital consolidation.

Even with more scrutiny from regulators, analysts expect there to be more mergers and acquisitions of healthcare systems in 2022. City of Hope completed a $390 million acquisition of Cancer Treatment Centers of America last month.

Analysts expect hospital systems may be looking to partner with systems that can fill specific needs, such as outpatient services or telemedicine.

In January, KPMG surveyed investors and found most expected to increase their merger and acquisition efforts in healthcare and the life sciences. It’s also possible that some smaller hospitals or systems that have been struggling financially may need to look for larger partners, analysts said.