Cerner president steps down

Cerner President Zane Burke will leave the company on November 2 after five years in the role. John Peterzalek, Cerner executive vice president of worldwide client relationships, will take on Burke’s duties and become chief client officer.

Burke helped oversee Cerner’s $16 billion deal to replace the Department of Veterans Affairs homegrown electronic health record with one made by the Kansas City, Mo.-based company. Contract negotiations stretched out almost a year, during which officials from the federal government and Cerner had to overcome some sticky issues, including interoperability. The VA’s installation of a new EHR will put it on the same system as the Department of Defense. A House oversight committee is schedule to dig into the EHR upgrade during a September 13 hearing.

Cerner did not offer any specifics behind Burke’s decision to leave. “Zane leaves the company with a strong client focus and commitment to continued innovation, partnership and sustainable growth deeply engrained in our culture and leadership philosophy,” said Cerner CEO Brent Shafer in a statement.

Burke, for his part, is optimistic about Cerner’s future, though he noted in a statement that “complex and evolving challenges remain.”

Late last week, Burke sold almost $10 million in company stock. In the announcement of Burke’s departure, Cerner stuck by the guidance it offered in its August earnings. Bookings in the most recent quarter were up 9%, thanks in part to the VA contract, and revenue was up 6% to $1.37 billion.

Amazon, Berkshire Hathaway, and JPMorgan Chase to hire CEO based in Boston, MA

Dr. Gawande will start in the CEO effective July 9. The new company will be headquartered in Boston and will operate as an independent entity that is free from profit-making incentives and constraints, the three organizations announced today.

As Healthcare Informatics noted in a news report published on January 30, “With an ambitious-sounding, if vaguely worded, announcement, three corporate giants—Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. announced Jan. 30 that they were launching an initiative to improve satisfaction and reduce costs for their companies’ employees…The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.’”

Details behind the initiative are still rather vague, but experts have pointed to reducing healthcare fraud and administrative costs as key areas that the companies will focus on. The lack of clarity has also led to skepticism among healthcare stakeholders. A recent survey from venture capital firm Venrock revealed that the majority of respondents are dubious about the impact of the Amazon/Berkshire Hathaway/JP Morgan healthcare partnership and believe the effort will face substantial challenges and take a lot of time to be successful.

CEO of athenahealth is stepping down

Athenahealth CEO Jonathan Bush has stepped down from the helm of the electronic health record system vendor effective immediately, the company said Wednesday.

The move comes after several allegations came to light in recent weeks, including “numerous physical altercations” with his now ex-wife, a sexual harassment settlement and inappropriate behavior at an industry event.

Athenahealth said in a statement that it is searching for CEO candidates. For now, Chief Financial Officer Marc Levine will take on additional leadership responsibilities. The company also named Jeff Immelt, former chairman and CEO of General Electric, as executive chairman.

The EHR vendor’s path forward is unclear. The board of directors will consider selling or merging the company as well as continuing operations independently. Elliott Management, which has a roughly 9% stake in Athenahealth, offered nearly $7 billion in May to purchase the company and has increased pressure on the board to accept the deal.

“We approach this process with an open mind and a commitment to continuing to strengthen the company—including its rich data asset, platform strategy and culture of innovation,” Immelt said in a statement. “We are fully focused on serving the best interests of our shareholders, employees and clients.”

Other investors—including Janus Henderson Group, which has a roughly 12% stake in Athenahealth—met with the Athenahealth board this month to urge a sale and to raise concerns about Athenahealth management’s “execution of strategic initiatives.”

Athenahealth had a relatively rough first quarter in 2018, booking less business than the same period a year earlier. Bush attributed the drop-off to weak demand, but said the company was in a strong position to grow. It laid off about 9% of its workforce at the end of 2017.

Cybersecurity: Nightmare scenarios and guiding principles

From legacy infrastructure to potential medical device hacks, some of the industry’s leading voices opened up about how the industry can begin to combat the inevitable breach.

By now, the healthcare sector is fully aware of the looming target placed on its back by hackers. The issue is that legacy infrastructure, staffing shortages and insider threats can make it tough to tackle these issues.

The biggest threats lie within the legacy infrastructure of healthcare itself. This includes medical devices operating on outdated platforms, along with IoT devices. We have not have seen it happen frequently but, if those devices are hacked cybercriminals can actually put patient lives at risk.

But security risks go beyond a breach. In healthcare, when a hacker gets in it often interrupts patient care, throws clinicians back to pencil and paper and downtime can last for weeks.

Consider the WannaCry attack that crippled the U.K. National Health Service last year.

Hackers are hitting EHR vendors, as well, which impacts providers operating on the impacted platforms. Allscripts was hit earlier this year, and some of its providers were unable to access patient records for up to a week.

“Breaches are always a concern, but lack of access to data and extended downtime with no access to records has huge impacts for revenue, patient care and community trust,” said Max Stroud, lead consultant with Galen Healthcare Solutions.

For some, the crux of security issues lies with the users. Often seen as the biggest threat, “user threats have the potential to cause significant losses and evade detection.”

Indeed, insider threats have been the biggest vulnerability to healthcare security for more than a year. Verizon’s April breach report found insider threats and human error were the biggest risks to security. In fact, healthcare is the only industry where insider threats outnumber outside threat actors.

Incremental steps and human-centric design

What can be done given the attack surface and seeming inevitability of a breach?

“A viewpoint has emerged in the last few years that organizations should just assume they are going to be compromised, so they should focus their efforts on detection and response for when an attack inevitably happens,” said a spokesperson from health IT firm Cognosante.

Detection and response, however, only comprise half the equation: “It’s a huge mistake to back off on preventive controls like strong access control, web application security, adaptive firewalls and user awareness training.”

Several experts said security needs to be designed with the user in mind. According to Stroud, she’s seen doctors share their passwords with nurses in order to complete charts, as it’s seen as “a care efficiency and not a risk.”

Even worse, Stroud said, “I’ve also seen EHRs delivered with standard admin logins. It’s not pretty out there.”

“Human-centered design should account for human-centered tendencies,” said Geeta Nayyar, MD, Femwell Group Health’s chief healthcare and innovation officer. “Understanding how we can help our folks develop an internal motivation to actively embrace the role of our first line of defense.”

With that in mind, organizations need to make it nearly impossible to do the wrong thing, Harlow added. “Very important to reduce exposure, reduce public face, limit internal access on role-based need-to-know basis.”

Organizations should also conduct pen testing and bug bounty programs on the regular to make sure they’re not susceptible to attacks.

“You can try to predict the future, or you can just continually review and improve your systems, processes, personnel, training, etc. including doing new risk assessments as changes are made,” said Harlow.

“We plan for what we can plan for – but there are many unknowns in this business,” said Nayyar. “Keep solid post-event contingency and crisis plans current.”

VA Finalizes ‘Anywhere to Anywhere’ Telehealth Program For Vets

The VA’s new telehealth program, posted in the Federal Register, enables VA practitioners to use connected care technology to treat veterans no matter where either the veteran or the doctor are located.

The Department of Veterans Affairs has posted former Secretary David Shulkin’s ambitious connected care initiative in the Federal Register, finalizing a plan to improve access to healthcare for veterans who have difficulties visiting the VA’s estimated 900 hospitals and clinics around the country. The rule enables VA practitioners to use telehealth to connect with veterans in any state, effectively bypassing state licensure laws.

“This final rulemaking clarifies that VA healthcare providers may exercise their authority to provide health care through the use of telehealth, notwithstanding any State laws, rules, licensure, registration, or certification requirements to the contrary,” the rule, dated May 8, states. “In so doing, VA is exercising Federal preemption of conflicting State laws relating to the practice of healthcare providers; laws, rules, regulations, or other requirements are preempted to the extent such State laws conflict with the ability of VA health care providers to engage in the practice of telehealth while acting within the scope of their VA employment.”

“Preemption is the minimum necessary action for VA to furnish effective telehealth services because it would be impractical for VA to lobby each State to remove any restrictions that impair VA’s ability to furnish telehealth services to beneficiaries and then wait for the State to implement appropriate changes,” the rule continues. “That process would delay the growth of telehealth services in VA, thereby delaying delivery of healthcare to beneficiaries. It would be costly and time-consuming for VA and would not guarantee a successful result.”

VA officials have stressed that the rule doesn’t give VA practitioners any extra liberties, but allows them to treat veterans through telehealth. It also does not apply to physicians involved in the VA Choice program.

Ascension forges first-ever global supply chain company to reduce costs

Ascension is partnering with a large Australia-based international hospital company to form what appears to be the first-ever global supply chain firm.

A major goal of the joint venture between Ascension and Sydney-based Ramsay Health Care, announced Tuesday, is to reduce costs at Ascension’s 151 U.S. hospitals and hundreds of other not-for-profit facilities to the levels in lower-cost countries.

“We believe our providers, and any providers, want products at high quality and lower cost,” Ascension CEO Anthony Tersigni said in an interview. “This gives us visibility into product offerings around the world, and patients will benefit from this greater awareness.”

he joint venture is part of Ascension’s new strategic direction, announced in March, that includes downsizing hospital operations and expanding ancillary businesses such as group purchasing.

Until now, there have been no meaningful efforts to rationalize the healthcare supply chain internationally, even though that’s been done in other industries. Much higher prices for drugs and other products in the U.S. are a major contributor to much higher healthcare spending here compared with other advanced countries.

Rob Austin, director of healthcare consulting at Navigant, said the deal could help reduce U.S. healthcare costs if it helps Ascension learn how much other countries pay for medical products, and it uses that knowledge to negotiate lower prices for U.S. providers.

“Especially with pharmaceutical drugs, if they could get the pricing, that would really make an impact on bending the cost curve,” he said.

But Austin cautioned that it won’t be easy for the new buying group to navigate the differing regulations in each country, particularly when it comes to drugs and medical devices.

The deal, finalized on Tuesday, will be owned equally by Ascension and Ramsay, a for-profit company founded in 1964. Ramsay owns 230 hospitals and outpatient surgery centers in six countries—Australia, France, Indonesia, Italy, Malaysia and the United Kingdom. It’s the largest private hospital operator in Australia and France. It reported revenue of about $6.5 billion (in U.S. dollars) last year, with a net profit of $451.5 million.

Ascension reported $552.7 million in operating income on net operating revenue of $22.6 billion in 2017, down 27% from $753.2 million in operating income on revenue of $21.9 billion in 2016.

In a written release, Ramsay CEO Craig McNally said the new global buying group will seek products internationally that deliver a high level of service and clinical outcomes. This partnership “will allow us to share learnings, best practices and industry knowledge to seek improved quality and outcomes whilst also reducing costs,” he said.

Ramsay’s share price dropped 4% Monday on news that McNally sold 75,000 shares of his company last week for about $4.8 million. The company said McNally sold his shares primarily to meet personal income tax obligations, The Motley Foolreported.

Through the joint venture, Ascension initially will seek out global sources mainly for medical-surgical products such as gowns, sutures and mattresses. It may also source some pharmaceutical products, most likely generic drugs. Later, the buying group may move into medical devices, implants and a broader range of drugs—all of which would face much tougher regulatory hurdles.

Tersigni said he wants the joint venture to extend Ascension’s reach domestically and internationally, strengthen Catholic healthcare, and help his organization gain insight into clinical research around the world.

“Vendors will benefit from having a single point of negotiation to an international platform like ours and streamline discussions between them and health systems,” he said.

Ascension will benefit from Ramsay’s experience in buying products to meet the needs of providers and patients in different countries. For instance, in some Asian countries, people are smaller in stature and require smaller scrubs. In addition, each type of hospital staffer may wear a different color scrub. In the U.K., hospital basins and bedpans are made of disposable cardboard rather than plastic.

Ramsay could gain insights from the operating model of Ascension’s group buying division, called the Resource Group. It focuses on streamlining the purchasing process to reduce vendor costs and thus enable them to offer lower prices without sacrificing profit.

The Resource Group manages a portfolio of $7.7 billion in annual spending for supplies, purchased services, pharmacy, construction materials, capital and IT, and it claims to save participants $1 billion annually.

It plans to channel about $143 million in spending through the new buying group in the first year.

Hospitals around the world buy the same types of products but pay sharply different prices in different countries. “If the new buying group shares any of that comparative pricing, that will be really eye-opening,” Navigant’s Austin said. “Imagine price transparency around the globe. That will call suppliers on the carpet for pricing much more aggressively in the U.S. than in other places.”

Why does the U.S. spend so much more on healthcare? It’s the prices

Dr. John Cullen’s four-physician family medicine practice in Valdez, Alaska, employs three full-time staffers who work on insurance and patient billing. A fourth full-timer focuses on obtaining prior authorizations from nine private and public insurers.

Even then, Cullen and his partners often must call and write letters to convince insurers to approve coverage or pay claims.

“It’s an incredible bureaucratic mess to get anything done for patients,” said Cullen, president-elect of the American Academy of Family Physicians.

In contrast, Dr. Trina Larsen Soles’ 12-physician general practice in Golden, British Columbia, has one full-time staffer assigned each day to billing the province’s public medical services plan, its public workers’ compensation plan and its quasi-public auto insurance company. She and her colleagues don’t get involved in billing or utilization-review issues.

“It’s not a big hassle,” said Larsen Soles, president of Doctors of BC, which represents British Columbia physicians in fee negotiations with the provincial health plan. “I can focus on patient issues, not administrative issues.”

The sharp difference between the two doctors’ experience partly explains why the U.S. healthcare system has much higher administrative costs than Canada and other countries. Those costs, plus much higher prices for medical services and pharmaceuticals and much higher pay for physicians and nurses, were the major reasons the U.S. spent a larger share of GDP on healthcare in 2016 than 10 other wealthy nations, according to a recent study in JAMA.

The authors said the huge spending gap—17.8% of GDP in the U.S. versus an average of 10.8% in the other 10 countries—was not primarily driven by the factors that often get the blame. Those commonly cited culprits include excessive utilization caused by the U.S. fee-for-service payment system, defensive medicine prompted by liability worries, underinvestment in social programs, and a low mix of primary care to specialty care.

The JAMA study findings reinforce doubts about whether the current U.S. policy mantra of shifting from fee-for-service to value-based payment, plus adopting high-deductible health plans to squeeze out unnecessary care will be the silver bullet to reduce spending. Instead, the authors suggest the need for measures aimed directly at bringing down the prices of drugs and medical services.

“We do have some overutilization, and value-based programs can help,” said Dr. Ashish Jha, a professor of global health at Harvard and a co-author of the article, which was based on data from the Organisation for Economic Co-operation and Development. “We completely have a price problem. MRIs cost twice as much in Kansas as in London, and that makes no sense.”

“We don’t want to tackle the issue of prices so we defer the discussion to things we think we can deal with, like the differences in quantity,” added Gerard Anderson, a health policy professor at Johns Hopkins University who has studied international systems.

More administrators

Eight percent of U.S. healthcare spending went to administrative costs incurred by private and public insurers, compared with an average of 3% in the 10 other wealthy countries, the JAMA authors found.

That 8% figure doesn’t include billing and insurance-related activities by hospitals and physician offices. Including those costs would bring the share of U.S. healthcare spending on administrative costs up to about 14%, according to Dr. Steffie Woolhandler, a health policy professor at Hunter College.

A 2013 Health Affairs study co-authored by Woolhandler found that administrative costs accounted for 25.3% of U.S. hospital spending in 2010, compared with 19.8% in the Netherlands, 15.5% in England, and 12.4% in Canada.

For example, Minnesota-based HealthPartners employs about 200 full-time staff to handle back-end billing and collection work for its one hospital and 36 clinics and specialty locations, a HealthPartners spokesman said.

In contrast, the University Health Network in Toronto, which has six hospitals including Toronto General and 1,272 beds, has just 5.5 full-time-equivalent employees handling insurance billing and patient collection activities, a UHN spokeswoman said. Meanwhile, its CEO was one of the highest-paid hospital managers in the province of Ontario with a 2017 salary of $558,000 (C$720,000) at recent currency rates, according to the Canadian Broadcasting Corp. The median base salary of a stand-alone hospital CEO in the U.S. in 2017 was $550,000 and with bonuses and incentives that rises to $648,000, according to Modern Healthcare’s Executive Compensation Survey.

It’s the same story for doctors. Physician practices in Ontario spent just 27% as much per physician per year on interactions with insurers as U.S. physician practices spent, according to a study published in Health Affairs in 2011.

Those administrative cost disparities arise from starkly different payment systems. While the U.S. has hundreds of private and public payers that each set their own rates with providers and drugmakers, the other 10 countries either have a single public health plan or have private insurers that pay the same nationally negotiated prices.

“We have a much more complicated healthcare system than anyone else, so it’s no surprise that the cost of administering it is so much higher than in any other place,” Jha said.

The profit motive

Some analysts say the mandate to maximize revenue is an inseparable part of a U.S. system that is more profit-oriented than systems in other countries. “It’s the ideological model,” said Aaron Katz, a lecturer in global health at the University of Washington who has studied the U.S. and Canadian systems. “The system is perfectly designed to provide opportunities for organizations to make money.”

At the urging of business consultants, U.S. providers have boosted revenue by breaking out separate fees for every service item, such as OR recovery room time, in contrast to much simpler billing in other countries, Rosenthal said. At the same time, U.S. patients have come to expect fancy, hotel-like facilities and amenities, far different from the utilitarian facilities abroad.

Even so, she and others say identifying villains is not productive. “How did we get to this crazy place nobody likes?” Rosenthal said. “Everyone wants to name a bad guy—insurers, drugmakers, high salaries. But it’s kind of all of the above.”

Nevertheless, many experts agree with the JAMA study’s conclusion that high prices and administrative costs, more than overutilization, are to blame for this country’s singularly high healthcare spending.

That won’t change until the people who pay the bills start using their clout to push down prices, Johns Hopkins’ Anderson said.

Indeed, it may be starting to happen with the January announcement that three corporate powerhouses, Amazon, Berkshire Hathaway, and JPMorgan Chase, are teaming up to tackle healthcare costs.

“When American corporations say we are no longer willing to pay 50% more than Medicare for the same service, we’ll have a discussion about healthcare spending,” he said. “Until then, we’ll be talking around the edges.”

Jha’s preferred solutions are for Medicare to take the lead in trimming provider payments for certain overpriced specialist services, and for the government to more aggressively enforce antitrust laws to prevent providers from consolidating to raise prices.

The University of Washington’s Katz, who sees no evidence that market competition works in healthcare, wants to see the government set overall spending levels and payments to providers and drugmakers, as other advanced countries do. “But that would impair everyone’s revenue and profit growth, and the U.S. players don’t want to hear that story,” he said.

Any spending reduction effort would have to lighten the crushing administrative burden associated with the numerous U.S. payers each setting their own payment rates and coverage policies.

Cullen, the family physician in Alaska, said he tried to persuade a Canadian doctor who works a few months a year at his office to join his practice full-time. She turned him down flat due to the hassles she’s experienced in dealing with U.S. insurers.

“She’s just horrified with what we do here,” Cullen said with a laugh. “This is a crazy system.”

By: Harris Meyer

Epic CEO Judy Faulkner reveals two new EHR versions are in development

The new versions will provide pathways for providers who don’t need the full version of Epic.

What a difference one year can make. In the world of Epic founder and CEO Judy Faulkner, where creating new technology meets with a delight for words, 2016 was a productive and rewarding year.

How so?

“We’re developing some really nifty new software,” she told Healthcare IT News on Sunday after attending the daylong CHIME-HIMSS CIO Forum at HIMSS17.

“There’s going to be three versions of Epic,” Faulkner said. “That’s what we’re working on now. There’s Epic Sonnet.” She pauses to note that an “epic” is a long poem – as in Homer’s Odyssey. As she put it, “even though we’re computer scientists, we can still be literate.”

Sonnet, she said, is the smaller poem. She describes Sonnet, which is now in development, as Epic technology with some of the features removed. It has a lower price point, and it can be just the right technology for organizations who don’t need the features of the full Epic EHR. Then, there’s yet another version, one between the full Epic EHR and the Sonnet. Both will provide a path toward upgrading to the full product.

“We’re finding that people need different things,” she said. “So, if you are a critical access hospital, you don’t need the full Epic. The two new versions of Epic in development can provide a pathway to adding all the features at a later time.

And then there’s “Caboodle” – the name of Epic’s data warehouse. “I don’t like boring words,” Faulkner said.

The trade name for Epic’s analytics suite is Cogito, from the Latin phrase “cogito ergo sum” – “I think, therefore I am.” In mid-2016, Epic renamed the data warehouse portion of the suite  “Caboodle” and Faulkner is now working on Kit – as in Kit & Caboodle. “Kit is making everything very open,” Faulkner said.

Faulkner seems to relish her work and is buoyed by it. Is there any time when it becomes a grind?

“Some parts do,” she replied. “Sometimes what becomes a grind is not the work itself, but how long it takes and how much of my life it takes and how little I have for other things.”

However, there are rewards – for example, knowing that there are so many drug-to-drug interactions – a quarter million – averted through Epic system alerts.

She’s also pleased that Epic customers have done well financially, she said. Yes, Epic EHR installations are known to cost millions of dollars. But, Faulkner has done the math and created charts. Over the years 2004 to 2015, and across all healthcare organizations, she believes that Moody’s and Standard & Poor’s statistics demonstrate that Epic customers reaped profitability unsurpassed by clients who implemented her competitors’ EHRs.

For Faulkner, 2016 was a very good year, indeed. From June through December, family members from around the world visited her and her husband in Madison, she engaged in work she loved, and she was often inspired.

Who inspired her the most in the past year? It was Mona Hanna-Attisha, MD, the doctor who — with the help the Epic EHR at Hurley Medical Center in Flint, Michigan — discovered the extent of the Flint water crisis.

“If we did not have Epic, if we did not have EMRs, if we were still on paper, it would have taken forever to get these results,” Hanna-Attisha was quoted as saying.

Healthcare organizations praise CMS’ overhaul of EHR incentive programs

LAS VEGAS — After CMS administrator Seema Verma announced plans to overhaul of the federal electronic health record incentive programs, healthcare organizations are wondering how those plans will unfold and whether they’ll meet the stated goal of boosting interoperability.

Details on the changes have been few and far between. The Office of the National Coordinator for Health Information Technology will continue to work with the CMS to figure that out, said ONC head Dr. Donald Rucker.

“The goal is to really get information flowing and to put patients in control,” Rucker said. The government might do that by pushing open APIs, which Rucker has called the “most transformative” tool for interoperability.

Whether the overhaul will achieve that depends on what it includes and on how providers and others react to it, according to some healthcare organizations. Here, a sampling of what the industry had to say about what it wants to change and whether it can expect the changes to affect interoperability.

“If they still push interoperability and the C-CDA and have good API requirements, the overhaul will work well.”

— Micky Tripathi, CEO, Massachusetts eHealth Cooperative

“The focus is on interoperability and patient access to data. But I don’t see how it could be easier if we’re going to focus on the things that are toughest. TO me, what needs the overhaul is the quality payment program.”

— Naomi Levinthal, practice manager, Advisory Board

“The overhaul and interoperability go hand in hand.”

— Kathy Mosbaugh, vice president of healthcare analytics, LexisNexis RiskSolutions

“It’s exciting to see the federal government taking such significant action to ensure data follows the patient. We’ve long known the value of understanding claims data at the clinical point of care and hope other sources of data—such as that with commercial payers—will soon follow suit and better support needs of individuals.”

— Meg Marshall, senior director of public policy, Cerner

“Interoperability requirements were deferred for many years. The thing that made me optimistic is that there’d be no more deferrals. But I worry about the Trusted Exchange Framework and Common Agreement, which could set back interoperability by years.”

— Carl Dvorak, president, Epic Systems Corp.

“We applaud the freeing of CMS data for patients, and we echo CMS’s sentiment that the deep burden afflicted on healthcare that is associated with documentation must be alleviated. While we wish CMS would also take this opportunity to recognize and work with ONC on the burden that the EHR certification program places on users of those products, we recognize CMS’s objective as being well-meaning.”

— Kyle Armbrester, chief product officer, Athenahealth

“We are hopeful the ACI overhaul outlined today will move us away from prescriptive measurements and toward using technology to improve patient health outcomes and patient access to data. We look forward to working with the administration in fleshing out the details to ensure that physicians get to spend more time caring for their patients and less time on administrative tasks.”

— Dr. David Barbe, president of the American Medical Association

“CMS’s announcements this week underscore the growing importance of health IT in care delivery as the move to value-based reimbursement continues to accelerate.”

Atrium Health to merge with Navicent

Atrium Health, previously Carolinas HealthCare System, and Navicent Health signed a letter of intent to merge, the organizations announced Thursday.

The merger of not-for-profits would give Atrium Health a regional presence in Georgia, opportunity to expand to other areas and bolster its service lines. Macon, Ga.-based Navicent, which would become part of Atrium, would gain access to capital and benefit from spreading costs over a wider patient base.

The announcement came a day after Carolinas HealthCare changed its name to Atrium, in part because it wanted a name that didn’t limit it to a certain geography.

“As not-for-profits continue to come together to build scale to drive affordability, care quality and cost savings, we are doubling down on that idea, and shouldn’t be limited to inside the state lines,” said Gene Woods, president and CEO of Charlotte, N.C.-based Atrium. “Navicent has a regional hub in Georgia and we can help broaden the community they serve, and possibly create a model for further expansion.”

Both organizations, which operate on Cerner’s electronic health record, are committed to caring for vulnerable communities and improving access, said Navicent President and CEO Dr. Ninfa Saunders. Saunders also co-founded Stratus, a collaboration of physicians and hospitals that aims to fill information gaps to better care for rural communities.

“This gives organizations around us an opportunity to join us,” she said. “Hopefully there is a catalytic function to this strategic combination.”

Whether it’s a certain service line, a favorable payer mix or additional access points, health systems have targeted particular regions to grow, picking up where national players have struggled to manage costs and realize a return.

Navicent is building Beverly Knight Olson Children’s Hospital in Macon, Ga., which complements Atrium’s Levine Children’s Hospital in Charlotte, Woods said. There are also opportunities to expand oncology lines, post-acute care, telemedicine and behavioral health services.

“Sharing our infrastructure and analytics will give us the ability to better manage populations and identify best practices,” Woods said.

Atrium, the largest hospital system in North Carolina, is also pursuing a mergerwith UNC Health Care, based in Chapel Hill, N.C.