Twice this year, St. Joseph’s Hospital has sought to go into partnership with other metro Atlanta hospitals to curtail its costs in the delivery of health care. Both overtures ended without success, and St. Joseph’s – Atlanta’s oldest hospital – has begun looking to see whether other health-care companies might want to merge with or buy St. Joseph’s.

Paul Johnson

Paul Johnson, St. Joseph’s executive vice president and chief operating officer, recently took over as interim chief executive officer after the departure of his predecessor, Kirk Wilson.

The Reporter Newspapers submitted written questions to Johnson about St. Joseph’s future, and he provided these answers.

Q. It has been widely reported that St. Joseph’s Hospital now is proposing selling itself to another health-care system. Have you given up on your efforts to find a partner to work with?

A. Saint Joseph’s is not on the “auction block,” instead this is a positive attempt to better position the health system for the changes coming in the local and national healthcare environment. In evaluating the future, Saint Joseph’s recognized the value of aligning with a more localized partner.

Saint Joseph’s then began the process of finding the right partner and business model. Following two attempts to partner using a Joint Operating Company business model, we are now expanding our affiliation options to other forms, such as acquisition or merger. The fact that we are in such good financial position means we can negotiate and partner from a position of strength.

Q. What derailed the proposed mergers with Piedmont Healthcare and Emory?

A. The complexity of the business model we discussed in both situations, a Joint Operating Company (JOC), was the sole cause both negotiations were called off. A JOC has both financial and operational stipulations which, in the end, can be difficult to implement.

Q. How would a sale work? Do you hope to sell the entire hospital and related entities or would you spin off some businesses? Who would receive the proceeds of the sale and how could such a deal be structured?

A.  A sale of Saint Joseph’s would most likely include both the main hospital and campus, the Saint Joseph’s Medical Group, the Saint Joseph’s Translational Research Institute and Saint Joseph’s East Georgia Hospital. Saint Joseph’s Mercy Care Services and related clinics would not be included, but would continue to operate within Catholic Health East (CHE), our current parent company.

Q. Do you have any interested buyers?

A. Our investment banking firm, Cain Brothers, has received dozens of inquiries since we announced our openness to other models. We are, however, in the very early stages of this process and no “short list” has been developed, nor have any negotiations taken place.

The interested parties are both local and national and we are thrilled, yet not surprised, to be in such high demand. In addition to being an award-winning health care facility in cardiovascular, orthopedic, and oncology care. We are home to the leading robotic surgical training program for surgeons, and are also known worldwide as one of just three 4-time recipients of MAGNET nursing status, which speaks to our level of expertise. Including a healthy, underleveraged balance sheet, these distinctions make Saint Joseph’s a very desirable system with which to partner.

Q. Would the sale of St. Joseph’s Hospital to a for-profit health-care company, such as Tenet Healthcare Corp., conflict with St. Joseph’s mission as a Catholic hospital?

A. For 130-years, Saint Joseph’s mission has been to provide compassionate, quality health care to the Atlanta community. That mission is built around Catholic teachings and beliefs. While a sale to a for-profit health care company would require that Saint Joseph’s no longer be sponsored by the Catholic church, we could still be affiliated with the Sisters of Mercy, their pastoral care and work in the community.

Q. Where do you see St. Joseph’s in 10 years? What sort of health-care delivery business will it be in a decade?

A. With this planned acquisition, Saint Joseph’s will be even better positioned for the significant changes that are coming to the market. We believe Saint Joseph’s will be even stronger than it is today and be even better suited to serve the needs of our patients.

Q. How do you think the sale of St. Joseph’s would change the Atlanta medical market place, and what effect do you think it would have in the “Pill Hill” area around St. Joseph’s and Northside Hospital?

A. The reason for this sale is our belief that the Atlanta health care market is going to undergo change through consolidation, and we intend to be on the leading edge of that change. An effective, forward-looking affiliation would in turn, only strengthen the “Pill Hill” area and improve healthcare quality for our Atlanta community.

Q. Why did your former chief, Kirk Wilson, depart from St. Joseph’s on Oct. 29?

A. After four years at Saint Joseph’s, Kirk simply decided that he wanted to pursue other opportunities.