Hospital consolidation continues with deals in Kentucky, Georgia
- Baptist Healthcare System is expanding its footprint in Kentucky with the purchase of Hardin Memorial Health for an undisclosed sum, Louisville Business First reported. Under the agreement, Louisville-based Baptist Healthcare will buy up all assets of Hardin Memorial and sink new capital into the 300-bed hospital and healthcare system. It will also make a monetary commitment to Hardin County.
- In Georgia, Northside Hospital and Gwinnett Health System tied up two years of negotiations with an agreement to merge operations, according to the Atlanta Business Chronicle. The combined system — with 1,479 beds, about 21,000 employees and 3,500 doctors — is expected to be fully integrated in 2019.
- The deals are the latest in a wave of mergers and acquisitions across the industry.
The Hardin Memorial acquisition is a bright spot for Baptist Healthcare, which announced in March that it was laying off 228 employees due to restructuring. Days later, then-CEO Steve Hanson abruptly resigned. He had led the nonprofit health system since March 2013.
In June, the health system closed its outpatient behavioral health office in Louisville, though inpatient behavioral health services continue to be provided.
Consolidation has been hot in the hospital industry of late as hospitals and health systems face declining admissions, rising costs and cuts to reimbursement. According to a recent Kaufman Hall analysis, transactions dipped slightly in 2016 from an all-time high in 2015 — 102 versus 112 — but are still much more frequent than several years ago.
Organizations also see acquisitions as a way to expand geographically and to increase brand awareness. Recent deals include Cleveland Clinic’s plan to buy Dover, Ohio-based Union Hospital. Union has had a service partnership agreement with Cleveland Clinic for several years through the clinic’s Telestroke Network. The move will increase the clinic’s presence in southern Ohio.
Fairview Health and HealthEast Care System also announced merger plans this spring, setting them up to control about 34% of the Minneapolis/St. Paul metropolitan market. And last week, UMPC reached a definitive agreement to acquire Harrisburg, Pa.-based PinnacleHealth, allowing it to grow its market share in central Pennsylvania, where it will compete directly with a University of Pennsylvania Health System hospital, among others. UPMC’s health plan line will also benefit from broader exposure.
- Louisville Business First Baptist Healthcare agrees to acquire a Kentucky hospital system
- Atlanta Business Chronicle Northside Hospital and Gwinnett Health System agree to merge