Emory Healthcare announced a partnership with St. Joseph’s Hospital on Friday in a move that demonstrates a major shift of power among metro Atlanta hospitals.
If the deal gains regulatory approval, Emory would operate hospitals in Midtown Atlanta, Johns Creek and the “Pill Hill’’ section of Sandy Springs, along with its Clifton Road facilities.
And the Emory system may not be finished expanding. The Henry Daily Herald reported this week that Emory has pledged to make Henry Medical Center its exclusive partner in the southern metro area, if the Stockbridge facility agrees to an affiliation. Piedmont Healthcare is the other announced suitor for Henry Medical Center.
Financial terms of the Emory/St. Joseph’s partnership were not announced. The deal is not an acquisition, and the two systems plan a joint operating company.
In recent months, Piedmont, Tenet Healthcare and other hospital organizations were cited as potential partners for St. Joseph’s, as the Atlanta Business Chronicle points out.
Emory ‘’is spreading its wings,’’ said Dave Smith, a consultant with Kearny Street Consulting. The deal puts Emory on equal footing with Piedmont, Smith said.
Emory also removed a competitor for heart surgery market in partnering with St. Joseph’s, Atlanta’s oldest hospital and a major cardiac care player.
And the deal would head off possible acquisition of St. Joseph’s by a for-profit competitor such as HCA or Tenet, Smith said.
St. Joseph’s probably preferred an outright acquisition, Smith said, but was unable to strike a deal.
Under the agreement, Emory Healthcare will receive a majority ownership of St. Joseph’s, with a 51/49 percentage split.
John Fox, president and CEO of Emory Healthcare, said in a statement that ‘’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.”
The two entities said that it’s anticipated that St. Joseph’s will continue to operate as a Catholic facility sponsored by the Sisters of Mercy.
Paul Johnson, CEO of St. Joseph’s Hospital, said in a statement, “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.”
The state’s attorney general and the Federal Trade Commission will review the partnership, and the deal is subject to approval by Catholic organizations as well. Those reviews will likely take four to six months, the two health systems said.