The New Jersey-based operators are working towards fully integrating in the coming months.
Atlantic Health System and Saint Peter’s Healthcare System have signed a letter of intent to partner with the ultimate aim of merging, the organizations announced.
A merger would bring New Brunswick, New Jersey-based Saint Peter’s into Morristown, New Jersey-based Atlantic Health’s network of care. Under the agreement, Atlantic Health would also make “significant investments” in Saint Peter’s, including the transition of the latter’s electronic medical record system onto the acquiring party. Saint Peter’s would continue as a Catholic hospital and still abide by the ethical and religious directives for Catholic healthcare services.
The systems said they hope to reach an agreement in the coming months, which will require approval from regulators and the Catholic Church.
“Although Saint Peter’s is stronger today than ever, throughout this journey it has become clear that to assure our future success, we need a strategic partner whose resources, capabilities and values are aligned with our mission,” said Leslie D. Hirsch, president and CEO of Saint Peter’s Healthcare System, in the news release. “We are very excited about the prospect of becoming a part of Atlantic Health as it has an excellent reputation for being a high-quality healthcare provider and our respective cultures are very well aligned.”
Saint Peter’s, the last independent operated health system in Middlesex County, is partly made up of a 478-bed acute-care teaching hospital in Saint Peter’s University Hospital and a state-designated children’s hospital and regional perinatal center.
The system had been on the lookout for strategic partners and in 2019 signed a letter of intent to merge with West Orange, New Jersey-based RWJBarnabas Health. A definitive agreement between the two organizations was signed in 2020 but terminated in June 2022 after the Federal Trade Commission filed a lawsuit to block the transaction for harming competition.
The agency said the combined health system would have had a market share of approximately 50% for general acute care services in Middlesex County, potentially leading to price increases and reduced quality of care.
If the FTC doesn’t step in this time, Saint Peter’s would get a partner in Atlantic Health with more than 550 sites of care, including seven hospitals, and Atlantic Medical Group, comprised of more than 1,600 physicians and advance practice providers.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Taking the first step towards a merger, Atlantic Health System and Saint Peter’s Healthcare System signed a letter of intent to form a combined system serving New Jersey.
The terms of the initial agreement would bring Saint Peter’s into Atlantic Health’s network of care and transition the former’s electronic medical record system onto the latter, while allowing Saint Peter’s to continue as a Catholic hospital.
Saint Peter’s had previously attempted a merger with RWJBarnabas before the definitive agreement fell apart in 2022 due to pressure from the Federal Trade Commission.