The partnership between CentraState Healthcare System and Atlantic Health System grew a little more Monday, when both organizations announced the signing of a Letter of Intent to create a co-ownership of CentraState.
Upon completion of this expanded partnership, Atlantic Health will become the majority corporate member in CentraState, and CentraState will join the Atlantic Health System network of care.
But don’t call it a merger or an acquisition, Atlantic Health CEO Brian Gragnolati said. This is a unique partnership between Freehold-based CentraState and Atlantic Health.
Gragnolati told ROI-NJ that this is the next step in a partnership that advances past clinical affiliation.
“What we’re really talking about is, how do we as Atlantic make investments into CentraState in a way that helps them develop clinical services in that area, make the kind of investments that they need in information technology, augment their population health efforts and enhance their physician network?” he said. “By doing it, this way, where we are in essence investing in CentraState, we will be able to be economically linked in a way that we can do all these things.
“We have a lot of rules and regulations that we have to follow in terms of how we work with organizations, particularly not-for-profits. This concept of really investing in them and becoming a co-member and a co-owner is, we think, a different model than you’re seeing happen in New Jersey and one that we feel will be very successful.”
Under this model, both systems will hold seats on a single CentraState governing board, each with specific rights and responsibilities. The CentraState board and leadership team, led by CentraState CEO John Gribbin, will continue to oversee system operations.
Gribbin said he is excited by the possibilities.
“After two years of study, we invited AHS to be a co-member of CentraState because we firmly believe that they share the values, philosophy and commitment to community that is the hallmark of CentraState,” he said. “Our organizations align in mutually beneficial ways, with the constant focus on a common culture of commitment to our patients, physicians and employees.”
CentraState — one of the few remaining standalone hospitals in the state — is comprised of a 284-bed acute-care hospital, a health and wellness campus, three senior living communities, a charitable foundation and four satellite health pavilions.
Those facilities will benefit greatly from the agreement, as the next step involves significant capital investment by Atlantic Health, which will strengthen CentraState’s integrated clinical services, physician network and infrastructure. The agreement has been outlined in a five-year plan endorsed by both system’s boards.
Earlier this year, CentraState and Atlantic Health expanded oncology and neuroscience care for Central Jersey residents through a clinical affiliation that has improved access to nationally recognized specialists and enhanced coordination of clinical and research activities. This affiliation expanded upon the systems’ existing relationship in the Healthcare Transformation Consortium, designed to provide broader and more affordable health insurance to employees across New Jersey.
Gragnolati and Gribbin said this latest venture between the two is a clear reflection of their shared mission and values. Both are grounded by strong ties to their local communities, along with longstanding commitments to clinical excellence, engaged physician leadership and value-based strategies to improve access to high quality, affordable health care, they said. And both systems take great pride in their exceptional workplace cultures that value the contributions of every team member while promoting award-winning innovation and compassionate care.
Gragnolati hoped this is just the next step of a continuingly growing partnership.
“We are thrilled to partner with CentraState to support their longstanding commitment to the community and make this investment in the health and well-being of New Jersey’s residents and families,” he said. “Having worked closely over the past few years with the CentraState team, we feel fortunate for this opportunity to combine our talents and resources to deliver high-quality, affordable and accessible care for patients across the state.”
Both organizations will now engage in a due diligence process, working towards a definitive agreement, which will define the specifics of their future relationship. Approvals will be necessary from state and federal officials before the transaction can be considered complete.
Atlantic Health System serves more than half of the state of New Jersey, including 11 counties and 4.9 million people. The system offers more than 400 sites of care, including seven hospitals: Morristown Medical Center, Overlook Medical Center in Summit, Newton Medical Center, Chilton Medical Center in Pompton Plains, Hackettstown Medical Center, Goryeb Children’s Hospital in Morristown and Atlantic Rehabilitation Institute in Madison.