Saint Joseph’s and Piedmont Healthcare explore joint operating company

Saint Joseph’s Health System and Piedmont Healthcare on April 9 announced the signing of a letter agreement to enter exclusive negotiations to create a new partnership in the form of a Joint Operating Company. Both Piedmont Healthcare and Saint Joseph’s are nationally recognized healthcare systems known for their quality, service to the community, and outstanding medical staffs.

The proposed partnership would enable the two healthcare systems to collaborate to better serve the people of North Georgia.

The proposed Joint Operating Company (JOC) would combine certain assets of both Piedmont Healthcare (PHC) and Saint Joseph’s Health System (SJHS), including Saint Joseph’s Hospital of Atlanta, and the newly formed entity would operate pursuant to the Ethical and Religious Directives (ERDs) of the Catholic Church.

The ERDs would not apply to PHC entities outside of the JOC. The Letter of Intent provides for a period of time in which the two healthcare systems will conduct exclusive discussions to reach a final agreement on the terms of the joint operations.

“Saint Joseph’s believes that this is an opportunity to leverage our reputation as a leader in clinical excellence and will allow us to expand our mission as a faith-based health system,” said J. Stephen Eaton, Chairman, Saint Joseph’s Health System Board of Trustees. “We highly regard the accomplishments and healthcare expertise of Piedmont Healthcare and believe a partnership with them will better serve our patients and expand access to quality healthcare services.”

“A joint operating company between Piedmont Healthcare and Saint Joseph’s would be a unique partnership between two of the most respected and longest-serving healthcare providers in Georgia,” said R. Timothy Stack, President and CEO of Piedmont Healthcare. “We have each served this community for more than 100 years by providing unparalleled patient care while achieving the highest possible clinical outcomes.”

Both system CEOs note the rapidly changing landscape of health care as an impetus for creating a more collaborative business model.

“In a constantly changing and complex healthcare environment, a joint operating company with Piedmont Healthcare is a smart, efficient and cost-effective way to provide the best quality of care possible for Georgians,” said Kirk G. Wilson, President and CEO, Saint Joseph's Health System.
“We look forward to finalizing the JOC structure with Piedmont Healthcare, who represents an exceptional potential partner. The JOC 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.”

The JOC would be cosponsored by Piedmont Healthcare and Saint Joseph’s Health System. Under the leadership of a separate Board populated with trustees from both SJHS and Piedmont Healthcare, the JOC's Board and management would lead all decision-making involving the JOC.

The due diligence period under the Letter of Intent is expected to take approximately 90 days. Once a definitive agreement is reached, Saint Joseph’s and Piedmont Healthcare pursue final approval from their respective governing bodies, the Sisters of Mercy and Catholic Health East, the Archbishop of Atlanta, the Federal Trade Commission and the Georgia Attorney General. The parties hope to have the proposed JOC in place by the end of the year.

“It is a challenging time in the healthcare industry, but one that we must approach with the belief that these challenges can also provide us opportunities to seek innovation and improve clinical care in a collaborative model,” said Stack.

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