Augusta University Health, Wellstar letter of intent made public

The Augusta Chronicle has obtained a copy of the letter of intent between AU Health Systems Inc., a subsidiary of Augusta University, and the Wellstar Health Systems.

Last week, the two organizations announced the letter of intent, but the letter itself was not considered a public record because it contained commercial information. Despite this, the University System of Georgia, which currently oversees AU Health Systems, released a copy of the three-page letter.

The letter, dated Dec. 27, 2022, confirms a discussion where Wellstar would take over all of the assets of AU Health, including the medical practices for faculty members of the Medical College of Georgia.

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"(The merger) would support and enhance a commitment to the provision of high-quality health care services locally and throughout the State of Georgia and better provide health care services to underserved populations," the letter notes. And it would support the planned development of a new hospital in Columbia County. AU Health already has authorization and an architect for the 100 bed hospital in Grovetown.

According to a joint press release, the final agreement could expand training for physicians at the Medical College of Georgia and create a new teaching campus in Atlanta at Wellstar's Kennestone Hospital.

The letter of intent does not bind either organization to a final agreement, and either of them can choose to walk away with a written notice. While the negotiations continue, AU agrees not to look into mergers with other third-party organizations. The letter also states that the two organizations "acknowledge and agree that they are in the process of conducting a due diligence review of the other Party as relevant to the Proposed Transaction."

The deal would also require approval from both organization's governing boards and the university itself. This will include the University System of Georgia Board of Regents and a review by Georgia Attorney General Chris Carr, according to the Associated Press. USG Chancellor Sonny Perdue expressed support for a potential deal.

“AUHS, Augusta University and the Wellstar Health System have a shared mission to solve Georgia’s health care challenges,” Perdue was quoted as saying in a news release announcing the letter. “By joining forces and working together, we can leverage Wellstar’s clinical platform and leading-edge systems to support patients while providing more opportunities for students to learn, train and care for residents in local communities across Georgia.”

Details of the deal, such as how much it would cost, have not yet been established.

AU Health lost $28 million on $1.06 billion in revenue in fiscal year 2021, according to reporting from the Associated Press. Wellstar has faced criticism for shuttering two Atlanta area facilities, including one of just two top-level trauma centers in the Atlanta area and decreasing care for poor and mostly Black patients. Wellstar has said it lost $122 million at the two facilities last year.

This article originally appeared on Augusta Chronicle: AU Health, Wellstar merger letter of intent offers details on proposal