Emory Healthcare, Saint Joseph's Hospital Form Partnership

Emory Healthcare and Saint Joseph's Hospital of Atlanta have created a joint operating company that will give Emory the controlling stake, but allow the Catholic hospital to keep its religious affiliation and avoid an outright sale.

The financial details of the JOC were not disclosed when the deal was announced Friday. However, the partnership -- expected to be finalized by year's end -- will create the largest health system in Georgia, with campuses in DeKalb County, Johns Creek, Midtown Atlanta and Sandy Springs.  

The two systems stressed that the JOC is a partnership -- not an acquisition -- that was first discussed but dismissed last October. However, the arrangement would give Emory Healthcare a 51/49 majority stake of Saint Joseph's and allow the joint healthcare system to expand services. Saint Joseph's said it will be involved in the governance of the JOC, with "super majority voting rights on certain issues critical to Saint Joseph's mission and values."

Executives at Emory Healthcare and Saint Joseph's -- Atlanta's oldest hospital -- said they see the partnership as "a strategic and transformative opportunity to marry the clinical and cultural strengths of the two organizations," the two systems said in a joint announcement.

"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/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 patients."

Heather Dexter, COO of the 410-bed St. Joseph's Hospital, told the Atlanta Journal-Constitution earlier this month that any decision to look for a buyer or a partner would be driven by inescapable changes in the healthcare sector that make it more difficult for independent hospitals. "We can't continue to be a stand-alone hospital in Atlanta, which is quickly changing into a market that will be dominated by three or four large players," Dexter told the newspaper. "We are making this deal in order to continue serving this community for the next 130 years." And while Saint Joseph's is profitable, the hospital increasingly has had to use investment funds to cover operations.  

The deal is subject to state and federal review, and review by the Catholic Archbishop of Atlanta. It is anticipated to be completed by the end of the year, and Saint Joseph's Hospital will likely continue as a Catholic facility sponsored by the Sisters of Mercy.  

"Similar values and mission statements outline our shared commitment to delivering compassionate, innovative care with integrity and excellence," said Paul Johnson, CEO of Saint Joseph's. "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 healthcare and industry reform."

Although the financial terms have not been made public, the two systems said their respective governing boards have reviewed the deal and have determined that each party has contributed adequate and fair consideration for its interest in the new company.  

A member of Catholic Health East, Saint Joseph's Health System is based in Atlanta, with subsidiaries that provide indigent care services, an employed physician group, a 25-bed critical access hospital in Greensboro, GA, and research facilities.