The Floyd Healthcare Management Inc. board votes to move forward with merger with Atrium Health. In a called meeting on Friday, the board and the Hospital Authority of Floyd County approved two agreements in preparation for the merger that now goes to the Georgia Attorney General for approval.
Statement from Floyd Medical Center: Today, Floyd Healthcare Management Inc., (FHMI) and the Hospital Authority of Floyd County (HAFC) approved two agreements in preparation for Floyd to request state approval of its strategic combination with Atrium Health.
FHMI and HAFC approved the form of a member substitution agreement between FHMI, the Charlotte-Mecklenburg Hospital Authority and Atrium Health Georgia Inc. for submission to the Georgia Attorney General.
The member substitution agreement, once executed, establishes Atrium Health Georgia Inc., a subsidiary of the Charlotte-Mecklenburg Hospital Authority, doing business as Atrium Health, as the sole member of Floyd Healthcare Management Inc.
FHMI, as lessee of Floyd Medical Center from HAFC, manages and operates Floyd Medical Center and its affiliates.
In addition, FHMI voted to approve an amended and restated lease agreement between HAFC and FHMI.
The agreement extends the HAFC’s lease of Floyd Medical Center to FHMI to 40 years from the date of closing.
George Bosworth, M.D., Chairman of FHMI stated: “Today’s vote is the next step in our strategic combination with Atrium Health. We now are prepared to file our member substitution agreement with the Georgia Attorney General’s office for approval, setting the stage for final approval in late June or early July.
“After more than a year of review, due diligence and organizational discussions, we are more confident than ever that Atrium Health is the right partner for Floyd to ensure that we can continue to provide the highest-quality medical care in our community for generations to come.”
According to the Rome-News Tribune, the Cedartown-Polk Hospital Authority and the board of Polk Medical Center Inc. also voted Friday to amend and restate the lease agreement between the two entities, a condition that lays the groundwork for the submission of Floyd’s member substitution agreement with Atrium to the Georgia Attorney General’s office for approval. Another of Floyd’s hospitals, Cherokee Medical Center in Alabama, will not have to submit a proposal. Alabama does not have the same set of regulatory requirements.
The information below was from the original announcement in November 2019:
Here’s a shocker few saw coming on election day. Floyd is partnering with Atrium Health in a move that has been seen elsewhere in the state and country as healthcare communities combine. At the first of the year, Atrium Heath completed a merger agreement with Macon-based Navicent Health. The Floyd deal increases the North Carolina-based system’s stake in Georgia — but once again outside the metro Atlanta market dominated by WellStar, Emory and others.
Floyd has been growing on its own, first with taking ove and building a new Polk Medical Center and lately with the Floyd Cherokee Medical Center in Centre, Ala. That’s in addition to adding other offices and services.
What’s new: Quick interview with Kurt Stuenkel, Floyd president and CEO.
Stuenkel says the Atrium deal is “a big day” for the Floyd healthcare system and the community. The process began around two years ago, he says, as the board looked at where it was and “what we neeed to do as we look at the future.” Floyd is in a great position, he says, but the future of healthcare “is tremendously uncertain.”
Floyd then began to look at trends in healthcare and some of the upcoming challenges. At that point, Stuenkel says, the board began to look at potential partners in order to have the necessary assets for what’s ahead. “Multiple not-for-profit” organizations were invited to meet with Floyd, he says, adding that those conversations were all confidential. Those conversations and subsequent due diligence were “incredibly rigorous.”
In recent months, it appeared that Atrium and Floyd had the most in common, he says, adding that the North Carolina not-for-profit was highly complimentary of the Floyd organization and mission. The Atrium proposal and conversations “gave us the feeling that we’d have the most local control,” he says. The company’s proposal “was just overwhelming,” says Stuenkel.
One of the caveats of the deal was Atrium’s $80 million investment into the Floyd Healthcare Foundation. It will help in two ways, Stuenkel says. First, it provides an insurance policy of sorts in case the Atrium combination didn’t work out; Floyd’s authority would have the resources needed to make appropriate changes. Plus Stuenkel says the interest from that $80 million will allow Floyd to redirect those resources into serving parts of the market where there are “health disparities.” The annual interest income will flow to those areas, he says.
No changes in local management are planned, Stuenkel adds, again saying Atrium shares its mission “and who we are.”
Media release: Floyd Health System and Atrium Health to Join in Strategic Combination
- Combination will provide Floyd with resources to invest in the future of care
- Agreement preserves Floyd’s ability to make local decisions
- Atrium Health will invest $80 million in Floyd Healthcare Foundation to address health disparities, indigent care, health needs and social determinants in the region.
Floyd Health System (Floyd) and Atrium Health announced Tuesday that the organizations have signed a letter of intent to combine, with the goal of bringing enhanced capabilities and new investments in skills and talent, facilities and technology to the communities served by Floyd. The agreement is subject to regulatory approvals by state authorities and is expected to be completed by the end of 2020.
Headquartered in Charlotte, N.C., Atrium Health is one of the nation’s leading health care organizations with an integrated network of 39 hospitals.
“Our governing board selected Atrium Health because of its mission, its commitment to all patients, its industry-leading best practices, its success and vision and its desire to invest in and help further Floyd, while also preserving our ability to make local decisions,” said Kurt Stuenkel, Floyd president and CEO. “This strategic combination will help continue Floyd’s success and will allow us to be more responsive to the needs of our communities through additional investments and resources.”
“From the first moments we met Kurt, his team and their board, we knew Floyd Health System was special,” said Eugene A. Woods, president and CEO of Atrium Health. “The team at Floyd is known for their deep commitment to clinical excellence, for their relentless focus to continuously improve, and most importantly, for keeping their mission at the heart of everything they do. I know our shared future is limitless, and we can’t wait to formally welcome them to our family.”
Floyd is the region’s largest employer with an economic impact of nearly $800 million annually. Through Atrium Health, Floyd will have more resources and be able to make an even greater impact in the communities it serves. Atrium Health has pledged to invest $650 million in capital for Floyd over the next 11 years to enhance capabilities, skills and talent, facilities, and technology.
As part of the combination and capital commitment, Atrium Health will invest $80 million in support of Floyd Healthcare Foundation. Founded in 1979 by a small group of visionary local citizens, Floyd Healthcare Foundation has become an integral part of the Floyd health system, supporting health-related programs in communities served by Floyd. “This endowment will provide additional resources to creatively impact health care disparities in our region,” Stuenkel added.
More information on the strategic combination is available at www.floydandatrium.org.
Here is GHN’s Andy Miller’s take on the Floyd/Atrium deal:
A Rome-based hospital system said Tuesday that it has signed a letter of intent to combine with Charlotte-based Atrium Health.
The agreement between the nonprofit systems Atrium and Floyd Health System, if finalized, would represent another major development in the consolidation of hospitals in Georgia.
Atrium Health recently took over operations of the Macon-based Navicent Health system and, experts say, may be looking to add more hospital systems in Georgia beyond Floyd Health.
Formerly known as Carolinas HealthCare System, Atrium Health has 39 hospitals in all.
Kurt Stuenkel, Floyd president and CEO, said the choice of Atrium comes after two years of study and discussions with other potential partners.
“We’re doing well financially,’’ Stuenkel told GHN on Tuesday. “What we’re thinking about is the future.’’
He noted that similar-sized hospitals in Macon, Columbus and Athens have joined larger systems recently. “Health care is rapidly changing,’’ Stuenkel said. “We don’t [currently] have the capability to take advantage of all the technologies coming into health care.’’
Stuenkel cited Atrium Health’s mission, “its commitment to all patients, its industry-leading best practices, its success and vision and its desire to invest in and help further Floyd, while also preserving our ability to make local decisions.”
The deal would bring Floyd Medical Center in Rome; Floyd Polk Medical Center in Cedartown; and Floyd Cherokee Medical Center in Centre, Ala., into the Atrium fold.
Such consolidation helps hospitals cut costs and boost their bargaining clout in negotiations with health insurers over reimbursements for services. Georgia systems run by Piedmont, WellStar, Emory, Northside and HCA have all added hospitals in recent years.
“From the first moments we met Kurt, his team and their board, we knew Floyd Health System was special,” Eugene A. Woods, president and CEO of Atrium Health, said in a statement. “The team at Floyd is known for their deep commitment to clinical excellence, for their relentless focus to continuously improve, and most importantly, for keeping their mission at the heart of everything they do. I know our shared future is limitless, and we can’t wait to formally welcome them to our family.”
Craig Savage, a consultant with North Carolina-based CMBC Advisors, said Atrium “seems like they want to be pretty aggressive and expand their presence in Georgia.’’
Atrium is the largest hospital system in North Carolina, and is “well-managed and well-regarded,’’ Savage said. He added that it’s probably looking to acquire other hospitals in Georgia.
Floyd is the region’s largest employer. It currently has local competition from fellow Rome hospital Redmond Regional Medical Center, which is run by the HCA system, and from neighboring systems in various directions, such as Dalton, Chattanooga and the northwest Atlanta suburbs.
In the agreement, Atrium Health has pledged to invest $650 million in capital for Floyd over the next 11 years to enhance capabilities, skills and talent, facilities, and technology. The North Carolina system would also invest $80 million in Floyd Healthcare Foundation to address health disparities, indigent care, health needs and social determinants in the region.
Stuenkel said he plans to stay on at Floyd after the agreement is done.
The agreement is subject to regulatory approval by state authorities and is expected to be completed by the end of 2020.