Health

The Long Wait May End Soon For Northside-Gwinnett Merger

If the Northside Hospital-Gwinnett Health System merger is completed, the resulting system would employ 16,000 people, making it one of the biggest employers in the region. Health care industry officials say the deal is close to approval by the Federal Trade Commission.
If the Northside Hospital-Gwinnett Health System merger is completed, the resulting system would employ 16,000 people, making it one of the biggest employers in the region. Health care industry officials say the deal is close to approval by the Federal Trade Commission.
Credit Courtesy of Northside Hospital
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After years of delay, the merger between Northside Hospital and Gwinnett Health System may be close to becoming reality.

Health care industry officials say the deal is close to approval by the Federal Trade Commission. That approval may come within a month or even sooner, say the officials, who are not associated with Northside or Gwinnett and who spoke to GHN on condition of anonymity.

Both Northside and Gwinnett spokespeople said Tuesday that they were not aware of any FTC decision. The federal agency was affected by the recent partial shutdown of government operations.

The mega-deal of nonprofits Northside and Gwinnett was once forecast to close in 2016.

Northside operates hospitals in Canton and Cumming as well as its flagship hospital in Sandy Springs, which it says delivers more babies than any other U.S. hospital. It’s also among the state’s top providers of surgical services.

The deal would create a mega-system across the northern suburbs of Atlanta into populous Gwinnett County.

The potential deal was originally announced in 2015, with a projected completion date of early in the following year.

The state attorney general’s office approved the proposed deal in mid-November 2017. Afterward, Northside said the combined system could start running in early 2018.

The overall length of time that the Northside-Gwinnett merger has taken – since 2015 – has baffled experts.

“One has to wonder how the feds can approve a $70 billion CVS-Aetna deal yet delay the Northside-Gwinnett transaction,’’ said Chris Kane, a consultant with Progressive Healthcare.

Gwinnett Medical Center, whose parent company is Gwinnett Health System, operates hospitals in Lawrenceville and Duluth. If the Northside deal is consummated, the resulting system would employ 16,000 people, making it one of the biggest employers in the region.

The combination “has geographic and clinical synergies,’’ Kane said. “A completed transaction will deepen Northside’s existing strong market position in women’s health and cancer. Gwinnett brings deep resources in cardiovascular and orthopedics that complement Northside’s service line portfolio.’’

The Gwinnett market would adjoin Northside’s primary territory and drive future growth opportunities toward Gainesville to the northeast and Athens to the east, Kane said.

The merger would continue the acquisition trend that has reshaped the state’s hospital market, with giant systems of Emory, WellStar and Piedmont expanding their portfolios.

Hospitals have pursued consolidation to reduce costs and increase their leverage in negotiations with health insurers over reimbursements for medical services. But insurers argue that such deals actually raise hospital prices.

“It’s all a land grab,’’ said Dave Smith, a consultant with Kearny Street Consulting. “Everybody is trying to stake out their territory.’’

Gwinnett “needs Northside’s financial stability,’’ added Smith.

Northside’s flagship hospital in Sandy Springs reported a margin or “profit’’ of more than $327 million in 2017, according to a recent article by the Atlanta Journal-Constitution’s Carrie Teegardin.

Andy Miller is editor and CEO of Georgia Health News