Saint Peter’s Healthcare System and RWJBarnabas Health announced on Dec. 16 that they have signed a non-binding letter of intent to explore a potential partnership.

In a joint news release the two health systems said that the move puts the institutions on a path toward reaching a definitive agreement, expected within the coming months.

Saint Peter’s said in October 2018 that it was considering a strategic partner. The hospital’s process has involved a comprehensive and detailed analysis of the organization, its Catholic mission, the competitive market and broader industry trends.

The LOI is the first step in the process of evaluating and designing a new relationship. The structure of the relationship has not yet been decided.

RWJBarnabas Health serves nine counties that are home to five million people. The system includes 11 acute care hospitals, three acute care children’s hospitals, and a renowned pediatric rehabilitation hospital, among many other facilities. RWJBH also has a partnership with Rutgers University.

Saint Peter’s University Hospital, a 478-bed acute-care teaching hospital sponsored by the Roman Catholic Diocese of Metuchen, is the flagship of Saint Peters Healthcare System that also includes the Children’s Hospital at Saint Peter’s.

Saint Peter’s is one of a few independent Catholic hospitals in the country sponsored by a Roman Catholic diocese.

Under the terms of the LOI, the role of Saint Peter’s as a full-service provider of acute health care services for the greater Middlesex County community would be enhanced.

RWJBH would make significant investments in Saint Peter’s and expand the network of outpatient services currently provided by Saint Peter’s, the partners said. Saint Peter’s would remain a Catholic institution and continue to abide by the Ethical and Religious Directives for Catholic Health Care Services.

The parties have been in discussions for some time and said they share a common perspective and culture regarding providing high quality, cost-effective services to their communities consistent with their respective missions and the need to move in the direction of population health management.

Leslie Hirsch, president and chief executive officer of Saint Peter’s Healthcare System said in a statement: “The rapid consolidation of hospitals in New Jersey and need for greater scale, as well as ongoing changes in health care delivery made it vital for us to identify a dynamic and strong strategic partner that would allow Saint Peter’s to retain its Catholic mission and identity, remain competitive, and yield the best possible outcome for our patients, employees, medical staff and the communities we serve. Working in partnership with RWJBarnabas Health would give us an opportunity to enhance the unique strengths of both organizations.”

Barry Ostrowsky, president and CEO of RWJBarnabas Health said: “The rapidly changing health care landscape presents new challenges and opportunities. Saint Peter’s is a vital resource to central New Jersey, and through this agreement we would greatly enhance our commitment in these communities with our mission of improving the health and well-being of its residents,” said Ostrowsky.

He added: “With tremendous support from municipal, county and state elected officials, our Robert Wood Johnson University Hospital academic medical center has enjoyed a longstanding collegial relationship with Saint Peter’s, and we are incredibly excited about the many possibilities for enhanced collaboration signaled by this Letter of Intent.”

The Most Reverend James F. Checchio, who as Bishop of the Roman Catholic Diocese of Metuchen said he supports the plan.

“As an independent institution for the last 112 years, Saint Peter’s has helped to fulfill the Church’s mission of healing in an extraordinary way while making Christ’s love and mercy known to people of all ages and backgrounds, from conception to natural death,” he said. “Through this proposed strategic partnership, Saint Peter’s will be strengthened to continue to serve those who are in need of – and greatly benefit from – the excellent, accessible, and life-affirming care intrinsic to Saint Peter’s Catholic identity and mission,” said Bishop Checchio .

He added that the partnership will also position Saint Peter’s to continue caring for the whole person with a compassionate response and to greater inform the wider community to the full range of human needs, hallmarks of our Catholic faith.

“I am grateful for the work of Saint Peter’s leadership in bringing this potential transaction to this stage, and am particularly appreciative of the ongoing oversight and guidance of Dr. John Haas, President Emeritus of the National Catholic Bioethics Center, in assuring that any transaction is structured such that Saint Peter’s will remain stalwart in its fidelity to the Catholic health care tradition,” Checchio said.

Both parties will engage in a due diligence process to define the specifics of the relationship. Approvals will be necessary from state and federal officials, the Catholic Church and others before the transaction is considered complete.