Emory Report

November 9, 1998

 Volume 51, No. 11

Emory signs agreement with Columbia/ HCA to manage 13 metro Atlanta facilities

Emory Healthcare and Columbia/HCA Healthcare Corp. are teaming up to create the most comprehensive health care delivery system in metropolitan Atlanta. An agreement signed Nov. 4 will include eight Atlanta area hospitals and five surgery centers owned by Columbia/HCA and its affiliates in the Emory Healthcare system.

"This agreement is an important step for us, and it fits well with our strategic plans," said Executive Vice President for Health Affairs Michael Johns. "This new alignment with these strong community hospitals and ambulatory surgical centers will enable Emory Healthcare to broaden its ability to offer acute care and ambulatory surgery care across many of the city's most rapidly growing areas.

"The goals of both organizations are to forge an even stronger alliance between the private practice physicians on the medical staff of these hospitals and Emory's physicians; create unique efficiencies in delivering care to patients; and enhance opportunities for managed care contracting, marketing and strategic planning," Johns added.

Johns, who also serves as CEO of Emory Healthcare, signed the agreement late last Wednesday with Jay Grinney, president of the eastern group of Columbia/HCA Healthcare. It is expected to go into effect early next year.

"Not only is this agreement good for the community, but we believe it is in the best interests of the University, since it places the Woodruff Health Sciences Center in an even stronger position to support our shared missions of creating and disseminating knowledge," President Bill Chace said.

The new agreement provides for creation of a limited liability corporation (LLC) overseen by a board jointly governed by Emory Healthcare and Columbia/HCA Healthcare. Through the LLC, Emory will be responsible for clinical management and quality assurance in the 13 facilities and Columbia/HCA will be responsible for the management of the day-to-day operations.

Under the arrangement, Cartersville Medical Center, Dunwoody Medical Center, Eastside Medical Center, Metropolitan Hospital, Northlake Regional Medical Center, Parkway Medical Center, Peach-tree Regional Hospital and West Paces Medical Center will provide patient care under the umbrella of Emory Healthcare. All eight hospitals are JCAHO accredited, one with commendation, and 92 percent of their practicing physicians are board eligible or board certified. Each hospital will retain its employees and medical staffs. Over the course of a transitional period, signage and materials will reflect the addition of Emory Healthcare to the local name.

The business deal also extends to five ambulatory surgery centers: Atlanta Outpatient Surgery Center, Atlanta Outpatient Specialty Services, Atlanta Outpatient Peachtree Dunwoody, Marietta Surgical Center and Northlake Surgical Center, which will retain their local names, employees and medical staffs.

"We look forward with great pleasure to working more closely with the excellent physicians based in these hospitals," said Rein Saral, CEO of Emory Clinic. "We believe our cooperative relationship as physicians will provide the best in high quality care to residents of Atlanta-and also improve our opportunities with managed care organizations and other payors."

Saral added that Emory Healthcare plans over time to establish dedicated specialty support in selected individual hospitals, such as that related to heart, cancer, the nervous system, gastroenterology and women's services.

Columbia/HCA will continue to own the buildings and other physical assets of the eight hospitals and five surgery centers. The LLC will lease these facilities for the duration of the agreement and provide the overall operational management. Existing Emory Healthcare facilities-the clinics and hospitals-and other hospitals or facilities owned by Columbia/HCA elsewhere in Georgia are not included in the agreement.

This arrangement greatly broadens the community's access to care under the Emory umbrella. The 1,277 licensed beds in these eight inpatient, acute care facilities will increase the size of the Emory Healthcare hospital network, which numbered 1,358 licensed beds prior to the agreement.

The agreement has been in negotiation for many months, during which it went through review and approval processes of the boards of Emory Healthcare, Emory Clinic and the Health Sciences Center before approval by the executive committee of the Board of Trustees.

Emory Hospitals CEO John Henry was part of the negotiation team and noted this agreement is very different from the one Emory discussed with Columbia/HCA almost five years ago. "Both Emory and Columbia/HCA are in a better position today to enter into this mutually beneficial, coordinated relationship for the benefit of an expanded base of patients in the Atlanta metropolitan area," he said.

--Sylvia Wrobel

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