By Abraham Kenmore, The Augusta Chronicle —
Representatives of Augusta University Health System, Wellstar Health and outside consultants on Tuesday delivered a blow-by-blow explanation of a proposed merger during a hearing held by the Office of the Attorney General in Augusta. About 20 members of the public also shared their comments, including elected officials, AU Health employees and others; the vast majority speaking in favor of the deal.
“We are here today because we know healthcare in this country continues to change, and change quickly,” said Augusta University President Brooks Keel, who also serves as the acting CEO of AU Health.
How the merger will happen
The hearing was split into two parts, with representatives of AU Health and Wellstar delivering sworn testimony outlining the deal, and consultants hired to examine the financials sharing their findings. Then the hearing was opened to the public.
In his testimony, Keel outlined the multi-year effort to examine opportunities for AU Health to merge with another health system, given significant financial challenges. The agreement, if approved, would see Wellstar step in as the sole corporate member of AU Health. It is not a sale, but Wellstar has made a number of contractual agreements to invest up to $797 million over 10 years in existing facilities as well as the new hospital in Columbia County for which AU Health holds a certificate of need.
Keel said that faculty and staff of the hospital have been supportive, that the health system would continue indigent care, and that patients would continue to receive quality care. Candice L. Saunders, president and CEO of Wellstar, elaborated on their end of the deal, including what she described as commitment to serving diverse communities, charity care and development of healthcare professionals.
“Wellstar, AUHS and Augusta University share a mission to create a healthcare future for Georgians and solve healthcare challenges across the state,” Saunders said. “We have a unique opportunity to create transformational impact on improving the health and wellbeing of every person we serve, through education, research and innovative patient care.”
One aspect of the agreement would be pediatric care, as AU Health has the Children’s Hospital of Georgia. Others include expanding the pipeline of clinicians and expanding digital health, she said.
“Simply put, this partnership will bring together the best capabilities and innovations from Wellstar, AUHS and MCG to advance healthcare in our state,” she said.
Jim Lloyd, an accountant with PYA who was retained to examine the transaction by AU Health, explained the financial aspect of the deal. By comparing AU Health to similar businesses, PYA came up with with a value of $566.8 million before debt, and roughly $376 after. Evaluating Wellstar’s commitment, including taking things like inflation and the likelihood of some contingent payments being made, PYA came up with a total value of $584 million being invested into the system — $208 million over the value of AU Health.
Natasha Hunerlack, a partner with Ernst & Young, was retained by the Attorney General’s office to examine PYA’s evaluation and update it from last September. She testified that while there were places the PYA valuation could be argued with, the overall conclusion that Wellstar was investing more than they were receiving in AU Health assets held.
Atlanta Medical Center still top of mind for some
Those who have expressed caution about the agreement have done so less on the specifics of the merger itself than on Wellstar’s track record with the Atlanta Medical Center and Atlanta Medical Center-South, two facilities closed by Wellstar last year that served served largely Black patients. Wellstar has outlined its position on the matter in a website, maintaining that the financial losses at AMC were too great to be sustained.
Kierra Stanford, an organizer with the New Georgia Project, came in from Atlanta to share how the hospital closure had impacted her community.
“Augusta, my love letter to you would to please be cautious in trusting Wellstar,” she said. “I can only hope they continue to operate at the level of care you need.”
Several state lawmakers from Atlanta had already submitted written testimony on a similar theme ahead of the hearing, and ahead of the hearing Liz Coyle of the consumer advocacy group Georgia Watch shared written testimony she submitted calling on the Attorney General to ensure that similar closures could not happen in Augusta.
According to the proposed transaction agreement, Wellstar is obligated to continue core services, including emergency room and Level 1 adult trauma services at Augusta University Medical Center, for ten years after the finalizing of the agreement.
Melvin Ivey, president of Augusta NAACP, expressed concern over the proposal that AU’s current charitable care policy would be replaced by Wellstar’s a year after the merger, saying the current policy works well.
Overwhelming support from most
Most of the other community members who spoke to the agreement supported it thoroughly, including state Sen. Harold Jones II, D-Augusta, and Reps. Gloria Frazier, D-Hephzibah, and Karlton Howard, D-Augusta.
Jones said his experience with AU Health stretched back to receiving allergy shots when he was 6 years old, and the health system had a personal impact on him.
“We realize that certainly Wellstar has done a tremendous financial commitment, but more importantly, especially in this particular area in Augusta, the commitment to continue to do charity, and also indigent care and emergency room services, which is so critical to this particular community,” he said.
Nurses, doctors, faculty members, and researchers all testified in favor of the merger. Dr. Charles G. Howell, CEO of Augusta University Medical Associates, the practice group for MCG faculty which is slated to be dissolved as part of the agreement, described himself as an “avid supporter.”
“Since 1928, we’ve had a mission of caring for patients and educating the next workforce in all facilities for the state of Georgia,” he said. “Wellstar is a partner that we hope will join us in making sure we don’t drop this mission. Our training footprint, I hate to admit it, is too small. Our facilities are not large enough …. our equipment needs updating.”
Dr. Cynthia Mercer, a member of the board of AU Health, re-iterated that the board was in unanimous support of the merger after a “complex and ardous” process. “Overwhelmingly we concluded Wellstar health system was the best fit for our strategic
goals,” she said.
The record for the hearing will remain open for written comments through 5 p.m. Thursday, and comments can be submitted at haa@law.ga.gov. Once the comment period is closed the report from the attorney general’s office will be available within 30 days.
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