ALBANY, Ga.: As first reported at albanyherald.com, the Hospital Authority of Albany-Dougherty County voted unanimously Tuesday to acquire Palmyra Medical Center.
Officials with Phoebe Putney Health System announced the acquisition following the authority's approval Tuesday morning. The cost, which is $195 million, includes all assets and property owned by the 248-bed hospital on Palmyra Road. It is a cash transaction.
Closing of the acquisition is expected to take place in late January. Palmyra will convert from a for-profit hospital to a not-for-profit facility and will be owned by the authority -- which also owns Phoebe Putney Memorial Hospital. The authority will enter into a management agreement with the new entity, a subsidiary of the health system, for the facility's day-to-day operations.
The Palmyra facility will be known as Phoebe North once the transaction is complete.
Phoebe CEO Joel Wernick said the acquisition of Palmyra will have economic benefits and allow the 443-bed hospital to increase capacity.
"Unification means that it will give us additional capacity to continue growing," he said. "Despite past rivalry, they (Palmyra's employees) are good folks. A transaction of this nature is not simple. We are pleased to have come to an agreement."
Wernick also said the development would be invisible to taxpayers and that a payment in lieu of taxes will be "equal to what is currently being paid in taxes as a base" -- which is roughly $570,000, according to Dougherty County Tax Director Denver Collins-Hooten.
The $195 million is coming from surplus assets, the CEO said.
"We are able to do this transaction because of the support we have enjoyed," Wernick said. "We are fiscal conservatives, but we are a successful institution."
Another point Wernick stressed during a late-morning news conference Tuesday morning is that the acquisition will not result in any layoffs.
"Palmyra employees will become Phoebe employees," he said. "These folks will be treated just like other employees."
Phoebe is also in the process of broadening its insurance base to accommodate those whose coverage currently utilizes the hospital out-of-network.
"We will be covering all insurance companies," Wernick said.
A statement released by Palmyra officials said that Phoebe approached Hospital Corporation of America with an offer to acquire the Albany facility, after which HCA subsequently made the decision to enter into an agreement to sell Palmyra.
It also pointed out that the transaction is not yet final.
"We have provided quality care to this community for almost 40 years and will continue our focus on our patients," said Palmyra CEO Mark Rader. "While we have had great support from the community for broadening the services we offer, the dynamic environment makes this our best course of action.
"Throughout this process, our caregivers will not waiver from our mission of providing high quality care. We appreciate the support of our Board of Trustees, physicians, staff and community during this transition."
Wernick also addressed criticism that Phoebe would create a monopoly in local health care: "The last time I checked, nobody has been forced to come here," he said. "I'm glad we live in a country that will allow them to have that freedom of opinion."
The planned acquisition of Palmyra will have to meet federal regulatory standards, according to Mitchell Katz with the Federal Trade Commission.
While unable to speak on the specific Phoebe/Palmyra buyout, Katz said that companies are required to report an acquisition whose sale will top $63 million for review by either the FTC or the Department of Justice.
"Basically, it all boils down to whether a merger or acquisition affects choice or will cause health care costs to rise in determining the position of the FTC," Katz said.
Russ Williard, a spokesperson for the Georgia Attorney General's office, said his office doesn't review the acquisition of hospitals unless a nonprofit hospital is being bought by a private entity.
"The whole reason for the review is based on the fact that we view nonprofit corporations as being assets of the people, so we check to make sure the people aren't being harmed through the acquisition," Williard said. "In this instance, since the nonprofit isn't going anywhere, it's not something we'd review."
From a medical services standpoint, Georgia Department of Community Health officials say they are notified when a health organization intends to merge with another, but they mainly address certificate-of-need concerns that may arise, according to spokesperson Lisa Sheckle.
While Palmyra and Phoebe have been involved in multiple legal battles over certificate-of-need and anti-trust issues, the acquisition will end all outstanding litigation.