Possible Sale Of Hospital Could Shake Up Rome
Speculation is swirling in Rome about the possible sale of Redmond Regional Medical Center, owned by HCA, to AdventHealth, a Florida-based health system.
Redmond CEO John Quinlivan declined to comment Wednesday about a potential deal.
The potential for a sale could be part of a larger strategy by HCA Healthcare, a Tennessee-based hospital chain. Talk among industry officials has centered on HCA selling other Georgia hospitals as well.
Dave Smith, a consultant with Kearny Street Management, said Wednesday that the COVID-19 pandemic may have forced “some repositioning of hospitals.’’
Atrium Health, a system based in Charlotte, N.C., has a pending deal to acquire another Rome hospital, Floyd Medical Center. That may have helped prompt HCA to rethink its Redmond operation, Smith said.
“AdventHealth is huge, and is pretty well run,’’ he said.
Floyd Medical Center, Polk Medical Center in Cedartown and HCA’s hospital in Cherokee County, Ala., are all on the cusp of an acquisition by Atrium Health.
That deal, currently under review by the Georgia Attorney General’s Office, has the potential to pump in more than $650 million into the Floyd system over the next 11 years. The Floyd-Atrium merger is expected to be finalized in June or early July.
AdventHealth is a Christian-based hospital system, headquartered in Altamonte Springs, Fla. It was founded in 1973 and currently has 45 hospitals around the nation. Its hospital in Calhoun, known as AdventHealth Gordon, has received consistently high marks in the Leapfrog Group’s patient safety ratings. AdventHealth also runs a hospital in Chatsworth. Both facilities are near Rome.
HCA owns nine hospitals in Georgia. It purchased a hospital in Waycross in 2017 and is in the process of buying one in Vidalia. HCA’s biggest acquisition in the state came in 2018, when it bought Memorial Health in Savannah for a reported $456 million.
The proposed deal for Redmond comes as a surprise overall. Redmond has remained a profitable hospital and was named to the Fortune/IBM Watson Health 100 Top Hospitals list for the second year in a row earlier this week.
From the standpoint of hospital chains such as Atrium and AdventHealth, consolidation brings advantages, such as lowering some costs and giving hospitals more clout in contract negotiations with health insurers, experts say. For hospital systems, bigger tends to be better.
Though hospital consolidation has slowed down a bit because of the pandemic, it still is seen as a major trend in the health care business.
But while mergers may benefit hospitals’ bottom line, for local municipalities there is the very real potential for tax revenue loss.
AdventHealth, like Floyd Medical Center and Atrium Health, is a nonprofit health system. That designation could mean that Floyd County would take a hit on tax revenue if AdventHealth takes over Redmond, a for-profit facility that pays taxes.
Currently Redmond pays $588,000 in taxes on personal property, including equipment, and $790,000 in taxes on property and buildings, according to Floyd County Tax Commissioner Kevin Payne.
Conversely, tax bills for properties listed under Hospital Authority of Floyd County or Floyd Healthcare Management totaled $30,242.
AdventHealth Gordon, for example, currently shows no record of local property tax paid, according to Gordon County Tax Commissioner Scott Clements.
If the deal for Redmond comes to fruition, much of the hospital’s property could be removed from the county’s tax rolls. That would translate into a significant cut in funding for both city and county schools.
This story comes to GPB through a reporting partnership with Georgia Health News.