Mayo Clinic will no longer operate a hospital it has run for several years in Georgia, a change that fits with the clinic's strategy to form looser links with out-of-state medical centers.
The deal isn't done yet, but it will end Mayo Clinic's affiliation with a hospital in the southeast Georgia town of Waycross. When the agreement was struck in 2012, it expanded Mayo's operating footprint to a sixth state and created a possible source of patient referrals for the clinic's large hospital in Jacksonville, Fla.
"We plan to disaffiliate, and we are working with them very closely on a smooth transition plan," said Pat McCarty, vice chair of financial planning and analysis at Mayo Clinic, in an interview last month. A financial statement released in February said Mayo's board resolved in November to return the hospital and related governance to community directors.
Back in 2012, the Waycross affiliation was a first step toward Mayo possibly developing a network of feeder community hospitals around its medical center in Jacksonville, much like Mayo Clinic in Rochester built a system of clinics and community hospitals across southern Minnesota, Iowa and Wisconsin.
But Mayo has since opted to grow its Mayo Clinic Care Network, in which several dozen hospitals across the country have subscription agreements whereby they consult with Mayo on challenging cases.
"A community-based hospital is really not a good fit with our strategy for the Florida location," McCarty said. "The Florida practice is really more of a destination site."
The hospital assets in Waycross are owned by the hospital authority in Ware County, Ga., and leased to Mayo Clinic. Before the affiliation began in 2012, a Georgia nonprofit called Satilla Health Services Inc. ran the 231-bed hospital, primary and specialty clinics and two nursing homes.
The decision in Georgia suggests that Mayo Clinic also won't be developing networks of feeder hospitals around its medical center in Arizona, said Martin Arrick, an analyst with Standard & Poor's.
"I think they were feeling that Arizona and Jacksonville needed broader regional bases than what they had," Arrick said. "I think Waycross was a step down that path, but one step. … I think they came to a decision that that really isn't the way they wanted to go."
For 2015, Mayo Clinic posted income of $526 million on $10.3 billion in revenue, which was off from record financial results in 2014.