Doctors and local officials praised the pending acquisition of Newton Health System by Piedmont Healthcare during a public hearing moderated by a representative of the Attorney General’s office, as required by law.
Under the terms of the acquisition, Piedmont would become the sole member of Newton Health System Inc., which currently operates the hospital under a lease agreement with the Hospital Authority. NHS would continue to lease the physical assets and campus of the hospital for the next 40 years from the Authority, which retains ownership.
Piedmont has committed to continuing to provide indigent and charity care without funding from the county, and to participate in Medicare and Medicaid. It has also agreed to pay the Authority for bond indebtedness, and to forego payments from the county for indigent care.
The hearing opened with testimony from NHS CEO James Weadick, who reviewed the history of the hospital, the third largest employer in the county.
He said following changes in the market and the passage of the Affordable Care Act, the hospital board decided it could not “continue to stand alone as an independent hospital in the community.”
When looking for a larger partner with which to merge, Weadick said the board wanted the hospital’s assets to remain the property of the Hospital Authority, while passing on responsibility for the debt. It was also important that the new partner continue to provide service to patients regardless of their ability to pay.
He reviewed the bidding process, stating that a request for proposals was sent to five entities, three of which responded: Piedmont, Emory, and Lifepoint Corporation.
Newton Medical then hired Pershing Yoakley & Associations to assess the offers. Piedmont’s proposal emerged as the most favorable.
“We believe the culture of Piedmont is very compatible with that of Newton Medical,” Weadick said.
The firm also did a community benefits study, which found that Piedmont’s offer was worth $47 to $53 million, compared to the calculated value of the NHS, which was about $10 million.
The study was reviewed by a third party, Ernst & Young, acting as the financial consultant for the Attorney General.
That review found that Pershing Yoakley & Associates’ valuable techniques were “reasonable,” although the representative from Ernst & Young pointed out that no study had been commissioned to evaluate the potential benefit of an outright sale of assets.
The panel also heard testimony from Gregory Hurst, COO of Piedmont Healthcare.
Hurst reviewed the five hospitals operated by Piedmont, adding that the company was “committed to maintain and enhance services offered in Newton Medical.”
He said the company had no plans to reduce staff, although some services would be centralized.
Dr. Carter Rogers, Chief of Staff at Newton Medical Center, announced his wholehearted support, as did several other doctors and department heads.
Covington Mayor Ronnie Johnston, County Chairman Keith Ellis, and County Commissioner J.C. Henderson all spoke in favor of the deal.
Dr. Brad Jacoby, an ophthalmologist and member of the Physicians Advisory Committee for the deal, said the staff was particularly impressed by Piedmont’s commitment to continue indigent care.
“We did a lot of research to decide who we wanted to partner with…there was no doubt that Piedmont was going to be the winner,” he said.
The Attorney General’s office will post its report on the acquisition, scheduled to go into effect October 1, within 30 days.