Industry Pulse (October 2008)

ATLANTA – Even though Piedmont Healthcare of Atlanta has been wracking up plenty of capital building projects and hospital acquisitions in recent years, the system recently announced that it is launching an even more expansive growth plan. The system revealed in September that it plans to spend $525 million over five years to build new projects and hopefully gain market share in the Atlanta metropolitan area. The strategic plan is expected to generate up to 750 new jobs and bolster Piedmont’s cardiology, oncology and neuroscience services, according to system officials. However, according to a report in the Atlanta Business Journal, shrinking reimbursements and a slowing economy could slow the strategic plan somewhat, especially if economic conditions slow the metro area’s growth. Even so, Piedmont is planning to build a new $200 million hospital in the Atlanta suburb of Newnan, Ga., spend $40 million to expand its Piedmont Fayette Hospital, and build an $11 million cancer center on the Fayette, Ga., campus, among other projects. So far, the system has remained healthy, with annual revenues of about $1.2 billion and a projected 10 percent annual growth rate during the next five years. While Piedmont has a solid reputation for providing a wide array of medical services in the Atlanta metro area, it lacks a signature specialty, such as Northside Hospital and its reputation for provide top-quality obstetric care. Also, Emory Healthcare is well-known for its cancer care, and Saint Joseph’s Health System is the area’s best-known cardiac care provider. As a result, Piedmont is looking to pour plenty of money into its cardiology, oncology and neuroscience business units. In fact, Piedmont has acquired a local cardiac care group, Atlanta Cardiology Group PC, and consolidated it with its own to form the Piedmont Heart Institute. As Piedmont looks to grab more market share, however, it faces some stiff competition. In fact, Gwinnet Medical Center has formed a joint venture with Saint Joseph’s to develop a $33 million open-heart program in Lawrenceville, Ga. And, Schaumburg, Ill.-based Cancer Treatment Centers of America Inc. has plans for a $150 million specialty cancer hospital in the Atlanta area. In addition, Children’s Healthcare of Atlanta expects to invest $2.5 billion during the next decade, and Emory Healthcare is planning to spend about $1.5 billion to remodel and expand two of its campuses, one in midtown Atlanta and the other in Decatur.