By ANDREW NELSON, Staff Writer | Published April 15, 2010
Saint Joseph’s Health System and Piedmont Healthcare announced April 8 the organizations signed a letter of intent to create a partnership that aims to lower costs and expand health care delivery. The discussions are expected to be completed in 90 days.
The proposed joint venture between Atlanta’s Catholic hospital and Piedmont Healthcare would adhere to the Catholic Church’s medical and ethical directives.
Leaders at Saint Joseph Hospital see the move as expanding the reach of Catholic health care principles in the community as they propose to give up control of most of the hospital’s medical facilities.
The partnership—known as a joint operating company—would be independent of the two hospitals with its own board of directors. However, it would “operate pursuant to the ethical and religious directives of the Catholic Church,” according to a press release.
Complex healthcare finances are in part driving the move. The new company would allow the two to share the costs of computer information systems, among other savings. The partnership could trim $30 million in costs between the two hospitals.
Saint Joseph’s Healthcare System is offering its two hospitals, its research arm and a medical group for the new venture, reserving only its charity care with Mercy Care and its foundation to its own control.
The contribution is valued at roughly $300 million. Piedmont would contribute assets of “equal value” to the joint operating company.
“It’s a sizable company,” said Kirk Wilson, president and chief executive officer of Saint Joseph’s Hospital.
Wilson said the arrangement isn’t a merger or an acquisition, but a new company. “The (joint operating company) is a wonderful opportunity to create one of the finest healthcare delivery systems in the country, and we are very excited with the prospect of partnering with Piedmont Healthcare in this effort,” he said.
“Nothing could be further from the truth” about the idea of an acquisition or merger of Saint Joseph’s Hospital, Wilson said. The partnership’s goal is to “sustain (Catholic medical care) for years and years to come.”
Wilson said finances for the healthcare have come under extreme pressure, with a drop in elective surgical procedures, the recession and lower insurance reimbursement rates.
R. Timothy Stack, president and CEO of Piedmont Healthcare, called the opportunity a “unique partnership between two of the most respected and longest-serving healthcare providers in Georgia.”
The joint operating company would be co-sponsored by Piedmont Healthcare and Saint Joseph’s Health System. It would have its own board of directors made up of trustees from both organizations. The board and the new management would make all the decisions involving the company. Representatives from Piedmont Healthcare would control the board with 51 percent of the vote, but any change in the joint operating agreement would require a “super majority” approval of the board, according to the spokeswoman for Saint Joseph’s.
Once the due diligence is completed, the joint venture would need final approval from the organizations’ governing boards, including the Sisters of Mercy and Catholic Health East, and state and federal regulators.
Archbishop Wilton D. Gregory said hospital executives kept him informed of the discussions and he is pleased with what he has seen.
“Saint Joseph is a beacon of Catholic healthcare for the Atlanta region, and it will remain so under this new arrangement. The leadership of the hospital has kept me informed of this plan from the very beginning. They have invited my input and consulted widely with Catholic ethicists and canonists, both those of their own choosing and those that I recommended.
He said, “I am confident that this arrangement will safeguard and keep in place all of the requirements that Catholic moral and ethical principles require for church-related healthcare institutions.”
Archbishop Gregory said many Catholic healthcare institutions have used this type of collaborative partnership as the needs of hospitals have changed.
“It offers the best opportunity to keep Saint Joseph the proud and dedicated Catholic hospital that it has been for more than 125 years. The tradition of caring for the sick and serving the poor that is the heritage of the Sisters of Mercy, the founders of Saint Joseph, will continue with this new affiliation with another important Atlanta institution,” he said.
Both not-for-profit medical facilities are viewed as leaders in healthcare in North Georgia. Piedmont Healthcare, the parent company of Piedmont Hospital, operates four hospitals. Its flagship is Piedmont Hospital, a 481-bed acute facility in north Atlanta. It has been recognized for its cardiac care specialties by medical organizations.
Founded in 1880 by the Sisters of Mercy, Saint Joseph Hospital has 410 beds and has been recognized for its services in cardiac care, vascular oncology and orthopedic services, among other specialties.
The new company is to adhere to Catholic social teaching and medical ethics, from end of life concerns to reproductive issues.
Deacon Bill Garrett, who is president of the Saint Joseph’s Mercy Foundation, said the ethical directives were key elements as the hospital talked with possible partners.
“It is a big deal. They were not taken lightly by anybody,” he said.
Wilson said the Catholic medical ethics is second nature at Saint Joseph’s Hospital and now those ethical principles would have a wider impact in Atlanta as a new community of physicians is educated about them and the joint operating company acts in compliance with them.
It will “spread the Catholic influence in healthcare,” Deacon Garrett said. “We think this is a win for Catholics in Atlanta.”