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Analysis

Emory-DeKalb Deal Secures Final OK From Regulators

By Steven Porter  
   August 10, 2018

The integration plan calls for three DeKalb Medical hospitals to be renamed effective September 1.

A plan to bring DeKalb Medical under the Emory Healthcare umbrella cleared its final regulatory hurdle on Friday, paving the way for the two Atlanta-area nonprofits to finalize their union in about three weeks.

In its 13-page report signing off on the plan, the Georgia Attorney General's Office said the parties took appropriate steps to protect the value of their charitable assets and ensure that any proceeds from the deal "are used for appropriate charitable health purposes."

The deal comes amid rapid consolidation in the state, including Piedmont Healthcare's acquisition of Columbus Regional Healthcare System earlier this year, which Piedmont President and CEO Kevin Brown described as part of a "hub-and-hub" strategy.

But mergers and acquisitions among other health systems in Georgia, and across the nation, didn't spur the Emory-DeKalb deal along, according to Emory Healthcare President and CEO Jonathan S. Lewin, MD, who has helmed the Emory University–affiliated health system about two-and-a-half years.

"When I first arrived, we did a strategic planning exercise and made a very conscious decision not to look at growth for growth's sake alone," Lewin told HealthLeaders on Friday. "So we actually have passed up a number of opportunities, including some of those that our friends and peers here in metro Atlanta have pursued. We looked at them and said, 'No, that does not fit with our strategic vision as an academic health center.'"

There's a simple reason why the DeKalb Medical opportunity was so attractive: geography. DeKalb sits just outside Atlanta, and about half of the university's employees live in DeKalb's primary service area, Lewin said.

"Whatever we can do to make sure that DeKalb becomes a strong contributor to the health of the community is something that's exactly aligned with our strategic vision for the future," he added.

DeKalb Medical has had some financial struggles as most of its peers in metro Atlanta have partnered up, as the Atlanta Business Chronicle reported. But Lewin said Emory Healthcare is up to the challenge.

"Everything worth doing isn't easy, and clearly turning around a struggling health system is a challenge that many others have dealt with before and many will deal with in the future," he said. "We are very confident that we'll be successful in helping DeKalb achieve its potential as a successful and thriving component of Emory Healthcare."

What makes him so confident? For starters, DeKalb Medical already has an excellent physician staff, Lewin said. What the organization needs is reinvestment in the institution, which Emory Healthcare is prepared to provide, he added.

Next 3 Weeks
 

If all goes according to plan, the combination will be finalized effective September 1. In the mean time, the two organizations will complete the final stage of due dilligence, checking off a list of legal to-do items ahead of the expected union, Lewin said.

In a joint statement with Lewin, Bob Wilson, president and CEO of DeKalb Medical—which has three hospital campuses totaling 627 licensed beds—expressed confidence in his organization's decision to become part of Emory Healthcare. Wilson was named CEO in late 2016 following the resignation of former CEO John Shelton and layoffs affecting about 60 employees, as the Atlanta Journal-Constitution reported at the time.

The integration plan calls for DeKalb Medical's hospital in Decatur to be renamed Emory Decatur Hospital. DeKalb Medical Hillandale will be called Emory Hillandale Hospital. And the DeKalb Medical Long Term Acute Care facility in downtown Decatur will become Emory Long Term Acute Care.

Prior to the acquisition, Emory Healthcare had seven hospitals and 200 provider locations in Atlanta and the surrounding area, with operations in more than 40 of the state's 159 counties. With the three additional hospitals from DeKalb, the health system associated with Emory University will have 10 hospitals in the state.

Georgia Attorney General's Report of Findings on DeKalb-Emory Deal by HLMedit on Scribd

Steven Porter is editor at HealthLeaders.


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