Mayo Clinic Disengages from Georgia Nonprofit Hospital

Print Share on LinkedIn More

November 23, 2015; Gwinnett Daily Post

The former Satilla Regional Medical Center, which signed an integration agreement with the Mayo Clinic in 2012 and became the Mayo Clinic Health System in Waycross, Georgia, is apparently once again on its own.

Mayo is exceptional in that it operates in a “rarefied environment” of international destination specialty medical care with competitors like Johns Hopkins and the Cleveland Clinic. Mayo said that operating community hospitals is “not the highest and best use of Mayo’s time and capital.”

The hospital’s physical plant is owned by county government, and that will not change. It’s unclear how the hospital’s governance may change to reflect Mayo’s formal exit, though there is a freestanding 501(c)(3) that could be renamed to reflect the hospital’s resumed freestanding identity.

The 231-bed hospital with two nursing homes has about 1,600 employees and annual revenues of almost $160 million, according to its 2013 Form 990. There is speculation that the hospital’s net operating margin (profit) may have been negative, and that that was a factor in Mayo’s decision. However, a Mayo spokesman insists the hospital was always viable and remains so.

Mayo’s exit from Waycross will not be immediate, and there are indications that the community hospital will still have access to Mayo Clinic Florida specialists and resources on a collaborative basis.

There are many hospital system ownership and merger models being tested across the U.S. Many healthcare professionals believe that system integration and acquisition of large numbers of patients is a key to survive the lower margins and increased power of government and large insurance companies. The fact that Mayo Clinic appears to be acting contrary to that trend in Georgia may be significant. Local officials are worried about the future of their community hospital as an independent entity. No doubt, local government is also worried about the potential taxpayer liability should the hospital not be able to maintain a positive net operating margin (i.e., profit).—Michael Wyland