University of Michigan
News for Faculty and Staff

September 21, 2018

Saint Joseph Mercy, U-M proceed with Chelsea joint venture

February 15, 2018

Saint Joseph Mercy, U-M proceed with Chelsea joint venture

Saint Joseph Mercy Health System and Michigan Medicine, the academic medical center of the university, have signed a definitive agreement to establish a master affiliation and a joint venture for the 133-bed St. Joseph Mercy Chelsea hospital, effective immediately.

The Board of Regents on Thursday approved the master affiliation and joint venture, which will allow two strong health systems to join forces and enhance care in their communities.

Both organizations are committed to providing the right care, at the right time, in the right place through shared clinical objectives and bringing more care options closer to where patients live.

As announced in March 2017, the two health systems signed a letter of intent to carefully examine the feasibility and structure of the proposed joint venture. The two parties have completed this due diligence period and finalized the terms of the definitive agreement under which SJMHS and Michigan Medicine will both have an interest in St. Joseph Mercy Chelsea.

As both the majority and managing partner, SJMHS will provide leadership, nurses and staff and continue to oversee all hospital operations.

"It has been a pleasure working with Michigan Medicine to create a care delivery model that uses both of our existing strengths to benefit patients," said Rob Casalou, president and CEO, Mercy Health and SJMHS.

"Our health systems have a long history of working together and this joint venture is a continuation of our efforts to expand access to health services, including specialized surgery and physicians that were previously only available on Michigan Medicine's campuses."

"SJMHS has a long-standing, positive reputation for delivering high quality care, which makes this an excellent partnership for Michigan Medicine," said David Spahlinger, president of the U-M Health System, the clinical care enterprise of Michigan Medicine.

"With this affiliation, Chelsea-area patients will have expanded care choices closer to home."

Michigan Medicine serves patients from across the state through a network of relationships with health systems, hospitals and physicians, Spahlinger said. A strategic priority in expanding this statewide network is a greater presence in communities across the state, including communities adjacent to Ann Arbor as well as in West Michigan, he said.

Spahlinger added that formation of strategic relationships will help manage the growing need for hospital beds in the U-M hospitals in Ann Arbor.

Michigan Medicine and Trinity Health, which owns and operates St. Joseph Mercy Chelsea Hospital as part of Saint Joseph Mercy Health System, have a history of successful collaborations based on the complementary attributes and resources of Michigan Medicine as an academic health system and Trinity Health as a health care system with unique capabilities operating community hospitals.

The joint venture builds upon the existing Michigan Medicine family medicine residency clinic located on the St. Joseph Mercy Chelsea campus since 1978. The joint venture expands the surgical procedures that Michigan Medicine provides at St. Joseph Mercy Chelsea, as well as increases access to Michigan Medicine physicians for patients in Chelsea and across western Washtenaw County.

Construction on the St. Joseph Mercy Health System project will begin shortly on the seventh and eighth operating rooms at St. Joe's Chelsea. More services and surgical procedures will continue to be explored as the partnership advances.

"We have experienced a highly productive year at St. Joseph Mercy Chelsea as we have prepared for expanded services and greater collaboration with our Michigan Medicine doctors," said Nancy Graebner, president and CEO of St. Joseph Mercy Chelsea.

"We are now primed to begin working together operationally through this new joint venture with a smooth process in place."

All St. Joseph Mercy Chelsea staff will remain SJMHS employees, and no staff reductions will take place as a result of this agreement. Additional colleagues will be recruited as needed to support medical and surgical volumes. All Michigan Medicine employees, including doctors, residents and house officers who may work at Chelsea, will remain U-M employees.

St. Joseph Mercy Chelsea will retain its Catholic identity and continue to abide by the Ethical and Religious Directives.

Trinity Health, SJMHS and Michigan Medicine have had a variety of clinical programs and educational partnerships in place for decades. A master affiliation agreement between the organizations was executed in 2012 to enable the health systems to work together to create health care solutions in communities each mutually serves across the state.

The new agreements are part of a larger statewide strategy among Trinity Health-owned Mercy Health and SJMHS on one hand and Michigan Medicine and its most recent affiliate, Metro Health in Grand Rapids on the other hand.

This statewide strategy also includes a professional services agreement between Mercy Health cardiothoracic surgery and the department of cardiac surgery at Michigan Medicine, clinically integrated network delivery models that serve West Michigan, and graduate medical education.