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Regents Revise Governance Among Medical College Of Georgia, Teaching Hospitals, Physicians Group

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Atlanta — June 8, 2010

The University System of Georgia (USG) Board of Regents has approved a new governance structure for the Medical College of Georgia (MCG) and its associated hospitals, clinics and physicians in Augusta. This new structure is set forth in 16 documents approved by the regents today and to be approved by related MCG organizations over the next week. It will take effect on July 1, 2010. It supersedes the current governance structure adopted by the board in 1998.

Out of the board’s actions, a new, private, non-profit tax-exempt corporation, named MCG Health System, Inc. (MCGHS) will be formed. This new corporation will provide governance for MCG, MCG Health, Inc. (MCGHI), which is the corporate entity for the hospitals and clinics, and the Medical College of Georgia Physicians Practice Group Foundation (PPG).

As part of the new structure, the president of MCG will serve as the chairman and CEO of MCGHS, as well as the chairman of the existing MCGHI board. The president/CEO of MCGHI will report to the MCG president in the MCG president’s role as chairman of MCGHI.

“Our intent is to strengthen the accountability for and the governance of the entire MCG operation through a more coordinated approach,” said Regent Felton Jenkins, who chaired a study of the existing governance structure through the work of a special MCG Governance Subcommittee. “This new structure achieves this goal and will enhance the ability of all parties to provide improved and more efficient clinical and educational services.”

The new bylaws call for the creation of a 16-member board of directors for MCGHS. The board will contain four directors who are currently members of the Board of Regents, the USG chancellor, the MCG president, the MCG dean of the School of Medicine, the president/CEO of MCGHI, either the chair or the president of PPG, three directors selected by the Governor of Georgia, three directors nominated by the MCGHS chair, as well as a MCG faculty member nominated by the university faculty senate (a non-voting member).

Through a joint operating agreement, also approved today, MCG, MCGHI and PPG will coordinate strategic planning and direction of the clinical and educational activities of the broader MCG enterprise, including shared services, capital expenditures and budgetary planning.

Other agreements approved today will govern financial, technical arrangements, clinical, educational and research services, general business services, and personnel agreements among the various parties.

The regents first activated MCGHI in 2000 as a response to the emerging challenges confronting academic medical centers in a rapidly changing healthcare industry. This original governance structure provided the board with a flexible management structure for MCG’s clinical operations and was critical in ensuring the long-term economic viability of the hospitals and clinics that support MCG’s teaching mission.

Since that time, MCGHI has placed the operations of the hospitals and clinics in a surplus-generating position for the benefit of the MCG enterprise, but as the healthcare industry has continued to evolve, the board wanted to update the governance structure to remain in step and to better coordinate the overall mission of MCG.

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