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RWJBarnabas Health Eyes Deal With Saint Peter's Healthcare System

Analysis  |  By Steven Porter  
   December 17, 2019

The two health systems in New Jersey signed a letter of intent and expect to hammer out a definitive deal in the coming months.

RWJBarnabas Health and Saint Peter's Healthcare System announced Monday that they have signed a non-binding letter of intent to explore a possible partnership, more than 14 months after Saint Peter's began searching for a partner through a request for proposal.

The two health systems in New Jersey said they have yet to decide how they might structure their affiliation, but they expect to reach a definitive agreement in the coming months.

Leaders for both organizations cited the healthcare industry's shifts as an important reason to pursue a deal.

"The rapidly changing health care landscape presents new challenges and opportunities," said RWJBarnabas Health President and CEO Barry H. Ostrowsky in a statement.  "Saint Peter's is a vital resource to central New Jersey, and through this agreement we would greatly enhance our commitment in these communities with our mission of improving the health and well-being of its residents." 

Saint Peter's Healthcare System President and CEO Leslie D. Hirsch, FACHE, said deepening ties would be mutually beneficial for the organizations.

"The rapid consolidation of hospitals in New Jersey and need for greater scale, as well as ongoing changes in health care delivery made it vital for us to identify a dynamic and strong strategic partner that would allow Saint Peter's to retain its Catholic mission and identity, remain competitive, and yield the best possible outcome for our patients, employees, medical staff and the communities we serve," Hirsch said. "Working in partnership with RWJBarnabas Health would give us an opportunity to enhance the unique strengths of both organizations." 

Saint Peter's Healthcare System includes a 478-bed acute care teaching hospital that is sponsored by the Roman Catholic Diocese of Metuchen and that has a children's hospital. It's among relatively few independent Catholic hospitals nationwide that are sponsored by a Roman Catholic diocese, the organizations said.

Under their letter of intent, RWJBH would invest in Saint Peter's and expand its outpatient network, and Saint Peter's would maintain its Catholic identity and continue to follow the Ethical and Religious Directives for Catholic Health Care Services, according to the announcement.

"As an independent institution for the last 112 years, Saint Peter's has helped to fulfill the Church's mission of healing in an extraordinary way while making Christ's love and mercy known to people of all ages and backgrounds, from conception to natural death," said the Most Reverend James F. Checchio, JCD, MBA, Bishop of the Roman Catholic Diocese of Metuchen, in a statement.

"Through this proposed strategic partnership, Saint Peter's will be strengthened to continue to serve those who are in need of—and greatly benefit from—the excellent, accessible, and life-affirming care intrinsic to Saint Peter's Catholic identity and mission," Bishop Checchio added. "This partnership will also position Saint Peter's to continue caring for the whole person with a compassionate response and to greater inform the wider community to the full range of human needs, hallmarks of our Catholic faith."

Bishop Checchio thanked John Haas, PhD, STL, president emeritus of the National Catholic Bioethics Center, for "ongoing oversight and guidance" to assure "that any transaction is structured such that Saint Peter's will remain stalwart in its fidelity to the Catholic health care tradition."

Any deal must be approved by state and federal authorities, as well as the Catholic Church.

RWJBarnabas Health has also signed a letter of intent to acquire Trinitas Regional Medical Center, a 554-bed acute care Catholic teaching hospital in Elizabeth, New Jersey. Ostrowsky told HealthLeaders on Monday that he expects to finalize that agreement within the next 30-45 days and consummate the deal in 2020.

RWJBarnabas Health currently includes 11 acute care hospitals, three acute care children's hospitals, and a pediatric rehabilitation hospital, among many other facilities.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Saint Peter's Healthcare System includes a 478-bed hospital sponsored by a Roman Catholic diocese.

The structure of the potential relationship has not been decided, the organizations said.


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