A public hearing on the “member substitution” giving control of Augusta University Health System to Marietta hospital chain Wellstar drew mostly praise from AU medical professionals and local officials Tuesday.
Required by state law governing not-for-profit hospitals, the hearing included nearly nearly three hours of testimony about the deal itself followed by about 90 minutes of public comment.
The transfer has come under fire as it will terminate benefits and programs that were available to AU medical staff as state employees. It also evoked questions about Wellstar’s decision last year to close two Atlanta hospitals that serve majority-Black populations.
Senior Assistant Attorney General Alkesh Patel, who conducted the hearing, said the state will report its decision on the changes within 30 days.
Brooks Keel, AU president, CEO and chair of the AU Health board of directors and acting CEO of AU Health System, outlined the process by which AU Health began the search for a private partner in 2014 and the requirements the deal places on Wellstar. The substitution affects AU Health Systems, the Roosevelt Warm Springs Rehabilitation and Specialty Hospitals and the new hospital in Columbia County, for which AU Health obtained a Certificate of Need.
“We’re here today because we know that health care in this country continues to change and change quickly. The current reality is the delivery of healthcare remains a challenging effort,” Keel said. “Our financial situation is not good. Labor costs have increased significantly, reimbursements are flat or declining and overall our expenses are outpacing our revenue.”
Keel said the search affirmed that leadership at Wellstar and AU shared a common vision.
“The board is confident in the conclusion that we reached, and confident that the proposed transaction is good for the community, the state of Georgia and the AU Health System,” he said.
Wellstar’s commitment
In the resulting transaction, Wellstar has agreed to a total capital commitment of $797 million over 10 years that includes completing construction of the Columbia County hospital and medical office building and relocation of the Columbia County Surgical Center, he said. It also includes spending $31 million per year at the AU medical campus for two years, followed by $139 million in capital spending downtown over years 3-10. A quarter of the capital commitment could be deferred, however, if AU Health System isn’t operating at a 2% margin, he said.
In addition, Wellstar has agreed to continue to operate AU Medical Center as an academic medical center, and once it opens, the Columbia County hospital as a full-service acute-care hospital with an emergency department. AU Medical Center must provide specific clinical services – emergency, obstetrics-gynecology, Medicaid, adult Level 1 trauma, Level 2 pediatrics, Level 4 neonatal intensive care, the Children’s Hospital of Georgia and a pediatric ICU, oncology and a stroke center for a decade, he said. The University System Board of Regents will gain two appointments on the Wellstar board.
The “Master Affiliation Agreement” between AU Health and Wellstar has a 40-year term and “cannot be easily terminated by either party,” Keel said. If Wellstar attempts a change of control to a for-profit organization or one not headquartered in Georgia, the Regents have a right of first refusal, he said.
The facilities will be renamed “Wellstar” followed by their location and “affiliated with the Medical College of Georgia,” he said.
The public heard similar testimony from Candice Saunders, president and CEO of Wellstar Health Systems. Tax documents from 2021 show her salary as more than $2.5 million, not unlike executives at not-for-profit Piedmont Augusta.
“We look forward to all the AU Health System team members becoming employees of Wellstar,” she said. “We expect the system to grow as we open the new hospital and invest at the main campus.”
Public comments
After testimony from two financial consultants who determined Wellstar’s financial commitment was a better alternative than AU Health could produce, the public comment period began. Dr. David Hess, dean of the Medical College of Georgia, said the addition will create the fourth-largest medical school in the country, a boon for the state’s dire shortage of physicians.
“This transaction I believe places Augusta and also I believe the state of Georgia in a very good place to navigate any changes that takes place,” Hess said. “It brings two entities together that both have similar goals.”
Adding supportive comments were the senior dean of graduate medical education, the CEO of the Ronald McDonald House and others.
The lone opposed voice came from Kiera Stanford, a health care organizer from East Point. “Wellstar shut down my community’s hospital, but promised they would still be there for us,” she said.
Augusta NAACP branch president Melvin Ivey said he wasn’t concerned about AU joining Wellstar. “My concern is with providing that charitable care for our citizens who are not able to afford the cost of going into the hospital,” Ivey said. “I challenge you to maintain AU’s charitable program, because it works.”
In a joint statement, Keel, Saunders and University System Chancellor Sonny Perdue praised the partnership.
“Wellstar Health System, the University System of Georgia, Augusta University Health System and Augusta University’s Medical College of Georgia are excited for all the ways this innovative partnership will improve and transform the care and well-being of Georgians across the state,” it said.
Joint statement
“This includes investing in medical facilities and infrastructure, increasing rural hospital partnerships and expanding patient access to digital health sites and clinical care such as Wellstar and AUHS’s exemplary pediatric care provided through Children’s Hospital of Georgia. At the same time, the partnership will bring together the power of AUHS, Augusta University and Wellstar to advance medical education and research by increasing opportunities to train more physicians in a modern clinical environment and help address doctor shortages right here at home and across the nation. We appreciated the opportunity to talk about these benefits at today’s hearing and look forward to moving state-of-the-art healthcare forward in Georgia.”
