St. Joseph’s Hospital, known for handling complex heart cases, will keep its Catholic affiliation and avoid an outright sale through a partnership with Emory Healthcare.
The deal, announced Friday, adds the venerable Sandy Springs hospital to Emory Healthcare’s growing presence in metro Atlanta’s rapidly-consolidating market.
With St. Joseph’s in its network, Emory Healthcare expands a lineup of major hospitals and clinic locations across the area They include its flagship facility on the Emory University campus, as well as major hospitals in Midtown Atlanta and Johns Creek.
“We believe that St. Joseph’s represents an extraordinary opportunity for Emory Healthcare, in terms of clinical excellence, the pursuit of quality, culture and values,” said John Fox, Emory Healthcare’s president and chief executive.
Patients who see doctors at either Emory or St. Joseph’s will not see any immediate changes, hospital executives said. No major job cuts are planned. As some operations consolidate, however, reassignments are possible, Fox said.
Friday’s announcement came after St. Joseph’s spent the past year seeking a partner or a buyer. While the hospital’s overall finances have been strong, it has been covering losses on patient care with investment income. For it to survive, hospital leaders knew St. Joseph’s had to embrace Atlanta’s transition to a hospital marketplace that will soon be dominated by a handful of multi-hospital systems.
The partnership will help St. Joseph’s become more efficient by gaining economies of scale on some operations -- including the costly transition to electronic medical records, executives said. The hospital could also be in a stronger position when negotiating reimbursement rates with insurance companies.
Emory Healthcare has built the largest hospital system in the state. With St. Joseph’s in its network, it will have about 15,000 employees and about $2.5 billion in annual revenues, Fox said.
Emory and St. Joseph’s pursued a similar marriage last year, but talks failed. Partnership negotiations between St. Joseph’s and Piedmont Healthcare, another power player in the Atlanta market, also did not result in a deal.
St. Joseph’s leaders decided late last year to pursue a sale, even if that meant the hospital would give up its official Catholic designation. The affiliation is valued by the hospital’s leadership and the Sisters of Mercy, the Catholic nuns whose order started the hospital in 1880. But the Catholic designation also blocks clinical practices such as abortions or embryonic stem cell research, complicating the search for a partner.
Even after the deal failed last year, Emory and St. Joseph’s kept talking. The protracted process “just speaks to the complexity of these types of transactions,” Fox said.
Under the partnership, Emory Healthcare will take a 51 percent ownership stake in St. Joseph’s. But St. Joseph’s will retain the final say on the ethical and religious rules governing clinical practices within St. Joseph’s.
St. Joseph’s is now owned by Pennsylvania-based Catholic Health East, which operates hospitals in 11 states. It will be minority owner under the partnership.
In addition to the 410-bed Sandy Springs hospital, St. Joseph’s Health System includes a 25-bed hospital in Greensboro and St. Joseph’s Mercy Care, which provides medical, dental and other care to homeless and uninsured Atlantans through four clinics and several mobile clinics.
The Greensboro hospital and Mercy Care are not part of the deal and Mercy Care’s operations are not expected to change. St. Joseph’s employed physician group and its research facilities will be part of the new partnership with Emory.
St. Joseph’s and Emory did not reveal the financial details of the deal, which must be reviewed by the Georgia Attorney General’s office, the Federal Trade Commission and entities of the Catholic Church, the hospitals said.
addition to the 410-bed Sandy Springs hospital, St. Joseph's Health System includes a 25-bed hospital in Greensboro and St. Joseph's Mercy Care, which provides medical, dental and other care to homeless and uninsured Atlantans through four clinics and several mobile clinics.
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