Originally created 09/15/99

Executive: A hospital will close



Augusta's tight health care market is going to get tighter. It's inevitable, one of the city's top health care executives told a business gathering Tuesday.

"It's my prediction that one out of the top four major hospitals will close down in the next five years," said Donald Snell, president and CEO of MCG Health Inc., during a keynote speech at the Augusta Metro Chamber of Commerce's Business at Breakfast program.

Augusta's four major hospitals are Medical College of Georgia Hospital, University Hospital, Columbia-Augusta Medical Center and St. Joseph Hospital.

Growth in managed careand shrinkage in government health care reimbursement programs have brought "pain" to metro Augusta's second-largest industry, an industry that Mr. Snell said is overbuilt by as much as 60 percent.

The pain will only worsen as area hospitals fight for their shrinking piece of the pie, he said.

"It's going to force the providers in this town to come together," said Mr. Snell, who was hired earlier this year to head MCG Health.

The organization, the Medical College of Georgia's non-profit management company, was created last year to run the state teaching hospital more like a business.

The entity's formation coincides with efforts to find ways to consolidate the local health care industry through mergers, joint ventures and partnerships.

Mr. Snell, who has 20 years experience in health care mergers, said Augusta's hospitals pay to staff about 1,900 beds, even though only 1,053 were needed last year.

He forecasts admissions will decline about 3.5 percent and patient stays will drop 10 percent during five years.

Mr. Snell said managed care has still not hit its peak in Augusta.

One of the ways to maintain the city's overbuilt industry would be to merge hospitals into a "high caliber" medical center that would draw patients from all over the country.

Such a facility would attract investment in pharmaceutical and bio-technology research, both of which could be spun-off into job-creating industries, he said.

It's important for Augusta's medical community to remain healthy, Mr. Snell said, because its economic impact is about $2 billion a year. More than 25,000 residents now make their living off health care.

"When health care sneezes, its a major deal in this area," Mr. Snell said.

REACH:Damon Cline at (706) 823-3486.