Georgia Bulletin

The Newspaper of the Catholic Archdiocese of Atlanta


Emory And Saint Joseph’s Announce Formal Partnership

Published March 3, 2011

Emory Healthcare and Saint Joseph’s Hospital announced March 11 that they have established a formal partnership that will create the largest and most clinically comprehensive health care network in Georgia.

While the arrangement would give Emory Healthcare a majority ownership of Saint Joseph’s, Saint Joseph’s will retain involvement in governance of the joint operating company, including super majority voting rights on certain issues critical to Saint Joseph’s mission and values.

In a press release announcing the partnership, officials said that, subject to a review by Archbishop Wilton D. Gregory, it is anticipated that Saint Joseph’s Hospital will continue as a Catholic facility sponsored by the Sisters of Mercy.

Saint Joseph’s Hospital is the oldest and only Catholic hospital in Atlanta, founded in 1880 by the Sisters of Mercy. As a stand-alone hospital, it has become increasingly difficult for Saint Joseph’s to remain financially strong in a market dominated by health care systems with the capacity to achieve economies of scale in purchasing and top-tier insurance reimbursements.

The announcement comes after an extensive process that had included previous unsuccessful explorations of joint operating companies, including Piedmont Hospital and Emory Healthcare. It had appeared unavoidable that Saint Joseph’s Hospital would be sold.

Against that backdrop, the March 11 announcement about the partnership with Emory Healthcare reverses a concern as to whether Saint Joseph’s Hospital could continue as a Catholic hospital.

“We are thankful the partnership is going forward and it will allow Saint Joseph’s to continue its Catholic identity as it serves the people of Atlanta and beyond,” said Deacon Bill Garrett, president of Saint Joseph’s Mercy Foundation.

Emory Healthcare and Saint Joseph’s leadership say they see this partnership as a strategic and transformative opportunity to marry the clinical and cultural strengths of the two organizations and to create a new opportunity for the delivery of health care to the community.

“At our cores, both Emory Healthcare and Saint Joseph’s Hospital share compatible values and a common purpose to provide outstanding health care to North Georgia and the state,” said John Fox, president and CEO of Emory Healthcare. “Combining the excellence of our physicians, skill and experience of our clinical staffs, and promise of our research capabilities only strengthens what we offer to patients.”

The joint operating company being formed by the two systems is not an acquisition, but rather a partnership business model which the two organizations discussed but dismissed last year. During this recent bid process, Emory again pursued its interest in a JOC with a renewed commitment and the negotiations were a success.

The arrangement would give Emory Healthcare a majority ownership of Saint Joseph’s with a 51/49 percentage split, while providing for Saint Joseph’s involvement in governance and super majority voting rights on critical mission issues.

“Similar values and mission statements outline our shared commitment to delivering compassionate, innovative care with integrity and excellence. While complementing each other well, each organization brings unique features to the JOC that will enable us to better care for our community, while positioning us to meet the growing challenges of health care and industry reform,” said Paul Johnson, chief executive officer of Saint Joseph’s Hospital.

“We are thrilled to have Emory as a partner as we tackle the changing landscape of health care and create an even better and more innovative clinical care delivery model,” Johnson said.

The financial details of the transaction have not been disclosed. According to the press release, governing boards of both systems have reviewed the terms in detail and have determined that each party has contributed adequate and fair consideration for its interest in the proposed new company.

Formation documents will be submitted to the state attorney general and the Federal Trade Commission for regulatory review. As a result changes in ownership are not likely to take place until mid to late 2011. Catholic entities will also review the transaction.

Emory Healthcare has campuses in DeKalb County, Johns Creek and midtown Atlanta, while Saint Joseph’s campus is in Sandy Springs.