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Southern Regional, Emory planning to form partnership

Wole Ralph (left) and John T. Fox

Wole Ralph (left) and John T. Fox

Emory Healthcare, Inc., is forming a partnership with Riverdale-based Southern Regional Health System that will give the metro-Atlanta-wide medical system a large “say-so” in the medical treatment of Southern Crescent residents.

The two health-care systems announced, Thursday, that they have signed a letter of intent to begin negotiations that would allow Emory to take over the management of Southern Regional. The move has been in the works for several months, as the Southern Regional Board of Directors repeatedly met in executive sessions to discuss the deal.

While it is not a full-on merger, the partnership is expected to open the door for Emory to bring its resources, including its doctors, staff, equipment and Emory University graduate-level medical students, into Clayton County.

“With this letter of intent, we commit to ensuring a strong and viable health-care presence in the Southern Crescent, by working with Emory on formalizing a management agreement,” said Southern Regional President and Chief Executive Officer Jim Crissey, in a written statement. “Having accomplished that task, it is our intent to participate in Emory’s Clinically Integrated Network in the Southern Crescent.

“This will not only further the clinical and operational objectives of both organizations, but will enhance the future for quality health care in the Southern Crescent.”

Officials from both health-care systems said the next step in the partnership will be to hammer out a formal management agreement that will allow Emory to take over management responsibilities at the Riverdale-based health-care center.

“We will work diligently with Southern Regional to formalize a management agreement and to integrate Southern Regional into our clinical network,” said Emory Healthcare President and CEO John Fox, in a written statement. “When an agreement is reached, it will establish Southern Regional as a hospital partner in the Emory Clinically Integrated Network in the Southern Crescent area.”

Emory Spokesman Vince Dollard said Southern Regional Medical Center would be the only Southside hospital in the network, although it does already include several private physicians from across the Southern Crescent.

Officials from Emory and Southern Regional said the Riverdale-based medical center, and its satellite locations will be able to legally remain an independent health-care system, because this is not a merger. “Physicians and staff will not become Emory Healthcare employees,” Dollard said. “They will remain Southern Regional employees.”

In many ways, however, it will be Emory officials who call the shots — so to speak — in Southern Regional’s daily operations.

Southern Regional Spokesman Jeff Dickerson said the Riverdale-based hospital’s Board of Directors would stay in tact. But, he added that Emory will decide (with the consultation of Southern Regional’s board) who will be the Southside health-care center’s chief executive officer, chief financial officer, chief operating officer, chief medical officer and chief technical officer.

The economy has made it difficult for smaller, independent hospital systems, such as Southern Regional, to operate and provide the same level of health care as larger systems, like the one Emory runs, Dickerson explained. Therefore, he said, a partnership is needed to move forward.

“This partnership with Emory gives it [Southern Regional] an opportunity to put itself on a much more stable footing,” Dickerson said. “It will allow Southern Regional to become much stronger and sustainable going forward.”

Under an Emory-run management system, Southern Regional’s health-care programs would be blended with Emory’s, while the Atlanta-based health-care system’s programs are initiated at Southern Regional, according to a joint news release from the two medical systems. It also said Emory would provide guidance over the establishment of new quality, financial and operational directions at the Riverdale-based hospital.

“Our board is confident that Emory’s mission aligns closely with our own and our shared values will help us to form a successful partnership,” Crissey said. “Most importantly, a partnership with Emory Healthcare will preserve access to high-quality care for the communities we serve.”

Dickerson said some type of re-branding for Southern Regional should be expected as a result of the partnership, but he added that it has not yet been determined what that new branding might look like.

Clayton County Commission Vice Chairman Wole Ralph said the partnership between Southern Regional and Emory should be good for the county, because it will bring in a respected name in health care, while also providing financial stability to the Riverdale hospital.

Ralph became a member of Southern Regional’s Board of Directors in 2009, when the county commission agreed to back $40 million in bonds to help keep the hospital open. The partnership should provide Southern Regional with financial stability, he said, to pay back the bonds at a faster rate.

“We’ll be able to benefit from Emory’s name, capital and [insurance] reimbursement level, which is much higher than Southern Regional’s,” Ralph said.

The move is the latest development in a courtship that has been ongoing for the last couple of years, as large metro-area health-care systems move in to Clayton and Henry counties. Southern Regional and Emory were flirting as far back as 2010, when they applied to the state for permission to let Emory’s cardiothoracic doctors perform surgeries at Southern Regional.

That plan was dropped after it received opposition from Piedmont Healthcare, which later merged with Henry Medical Center, in Stockbridge.

Ralph said the new agreement between Southern Regional and Emory is not directly a response to Piedmont’s merger with Henry Medical Center, though. The county commissioner explained that Southern Regional’s seeking an affiliation with a major health-care system is part of the business model the hospital came up with when the county agreed to back bonds.

The Henry Medical Center merger with Piedmont Hospital, he explained, was only a symptom of a larger issue that drove Southern Regional to a partnership with Emory. He said a struggling economy, saddled with new federal health-care requirements, is causing financial struggles for hospitals, which in turn is forcing them to merge with one another.

“With the Henry Medical merger with Piedmont, and the consolidation of other hospitals, we knew we had to form a partnership with a large health-care system — one with a reputation for quality care,” Ralph said. “Emory emerged as the champion.”