Northside Hospital’s move to acquire Gainesville’s Northeast Georgia Diagnostic Clinic may be just its first major push into the Hall County health care market, said a national health care consultant familiar with Atlanta area medical practices.
“Any hospital that buys a large medical group like (NGDC) does so with the purpose of establishing a beachhead in the market,” said Nate Kaufman, managing director of San Diego-based Kaufman Strategic Advisors.
“I don’t think the question is (whether Northside) might (expand). It’s not if, it’s when,” he said.
Frank Norton Jr., a real estate executive and economic development observer, said he believes NGDC’s acquisition is “part of a “consolidation trend across all of Georgia for the last three years.”
“It points to the ever-changing and competitive health care landscape throughout North Georgia, (with) institutional medical groups trying to carve out their space,” he said. “We expect the movement to accelerate over the next five years as health care attempts to provide patient-centric care at a fair price.”
Northside has been inching for several years toward and into what is otherwise the Gainesville-based Northeast Georgia Health System’s backyard.
Northside, which has hospitals in Atlanta, Cherokee County and Forsyth County and one in Gwinnett County under review by the Federal Trade Commission, opened Northside/Gainesville Imaging at 425 Broad St. in 2015. Earlier this year, its Arthritis & Total Joint Specialists opened at 1255 Friendship Road in Braselton.
NGDC, based at 1240 Jesse Jewell Parkway SE, also has offices in the Braselton area.
Northside, with more than 2,800 physicians and 15,000 employees who serve 3 million patients annually, has not stated its further intentions beyond acquiring NGDC as part of a “planned framework.”
Hospital officials didn’t comment in a news release earlier this week, with Lee Echols, vice president of marketing for Northside Hospital, releasing a statement later that said Northside looked forward “to building on (NGDC's) legacy as our new partnership gets underway.”
“The work of connecting the two organizations is underway, and the operational plans are being determined,” the release states. “Both entities hope to have the new relationship finalized later this year.”
The move has caused an immediate, widespread reaction in the community, as well as social media stir with posters on both sides of the issue.
“We are surprised and very disappointed that Northeast Georgia Diagnostic Clinic chose to join an Atlanta-based health care system,” said RK Whitehead, Board of Trustees chairman of Northeast Georgia Health System, which also operates a hospital in Braselton and Northeast Georgia Physicians Group offices throughout the area.
“This shifts focus outside our local community and may make it more difficult for their patients to coordinate their care close to home,” he said.
John Ferguson, former longtime CEO and president of NGHS, said through a hospital spokesman that Northeast Georgia Medical Center “was built on the foundation of excellent care provided by the founders of Northeast Georgia Diagnostic Clinic,” or Drs. Henry Jennings, Sam Poole and W.D. Stribling.
The clinic, founded in 1953, now has 32 doctors and 11 mid-level providers.
“Having worked alongside those visionary leaders, I can assure you this decision to align with a health care system outside of our local medical community is not what they would have wanted,” Ferguson said. “Those men were not only invested in their patients, they were passionate about supporting their community. To imagine the practice is potentially turning away from that path is both astonishing and disheartening.”
Bill Beyer, CEO of Northeast Georgia Diagnostic Clinic, has said that while a new business structure will be developed, very little else will change.
“We will not be leaving the Gainesville area — we will remain here and provide health care services as we’ve always done,” he said. “Our physicians will be here. Our remarkable staff will be here. Our patients and their families will notice a few changes, all for the better.”
He said in a phone interview that Northside’s acquisition doesn’t change the clinic’s relationship with Northeast Georgia Medical Center, that “we will continue to admit to the hospital.”
He added that doctors “will be credentialed at Northside, but the chance they will be admitting patients there is probably very little. It’s not down the street.”
“They won’t refer down to Northside,” Kaufman said. “But if I’m a patient and I see a physician (in Hall) and he says he wants to do surgery … at Northside, then I’d probably go down there for the surgery. That is a typical thing for hospitals to do.”
Also, while Northside may not refer patients out of the market, “that doesn’t mean physicians aren’t going to come (to Hall) and have office hours.”
Rob Fowler, executive vice president and partner of Turner Wood & Smith Insurance, said referrals outside Hall have already started to happen.
“I have an employee who … is a patient of a NGDC physician,” he said. “The physician recently told the employee that she should have surgery at Northside hospital in Atlanta. No local options were provided to the patient.
“This upset our employee, as she does not want to travel to Atlanta to have surgery and told the physician that if she had the surgery, she would have it at Northeast Georgia Medical Center.”
Fowler added, “Being directed to Atlanta for surgery is unsettling for patients with chronic conditions who have had a trusting relationship with their doctor for many years.”
When asked about how the association with Northside got started, Beyer said, “I don’t really want to go into too much of the background. It’s the kind of thing where we learned very quickly that a partnership with Northside made perfect sense … for us and for them, and especially for our patients.”
Last year, Whitehead said, NGHS created an “Accountable Care Organization,” in which Longstreet Clinic and other area practices work with Northeast Georgia Medical Center “to improve health care outcomes while reducing cost for local patients.”
NGDC “declined to participate, which also raises concerns about their commitment to our local medical community.”
Beyer called it "simply a business decision."
"We wanted to better understand how it would affect our ability to
deliver patient care," he wrote in an email late Thursday night. "And we are still evaluating our option to join the ACO at
the beginning of next year."
Louis Smith, president of Northeast Georgia Medical Center in Gainesville, expressed disappointment in NGDC’s acquisition by Northside.
“We asked NGDC leadership to give NGHS the same partnership consideration that would be given to any other group,” Smith said in a statement to The Times. “Their leadership never formally pursued discussion about an acquisition of the entire practice, despite ongoing conversations about NGHS potentially employing their pulmonologists and closer alignment with oncology services. It’s disappointing that NGDC looked outside of our community for that greater level of partnership.”