It’s been 20 years since Savannah’s two oldest hospitals joined in a “remarkable journey” to expand their provider network throughout the region and better serve their communities.
The merger of two faith-based hospitals — St. Joseph’s in southside Savannah and Candler in midtown — avoided potential hurdles in what Paul P. Hinchey, president/CEO of St. Joseph’s/Candler Health System Inc., called “really a great Savannah success story” that provided a textbook model for such collaborations.
“It was remarkable,” Hinchey said. “There was no acrimony. (Trustees) just cared about what was good for the merger and the community.”
The combination, driven by “a common philosophy and vision,” provided a springboard to rapid growth that is still vibrant, Hinchey said.
Today, the system has 87 provider locations spanning 33 counties in southeast Georgia from Wayne County to Statesboro and Hilton Head, S.C. There are 714 patient beds — St. Joseph’s Hospital with 330 and Candler Hospital with 384 beds — in what Hinchey called the largest health care provider in the region.
It employs 4,000 people and last year provided almost $75 million in community assistance, including $27 million in traditional charity care and $2.4 million in community health improvement service and community benefits, according to its 2016 Community Benefits Report.
“We’re still growing,” Hinchey said.
Most recently St. Joseph’s/Candler unveiled a planned $62 million “micro-hospital” in Pooler with the first step to open in early 2019 on an 18-acre parcel on Pooler Parkway near the intersection with Interstate 16.
When built out over a 10-year period, the 170,000-square-foot facility will provide a health care campus that addresses the needs of west Chatham County and surrounding communities.
Pooler Mayor Mike Lamb said in February that the St. Joseph’s/Candler Pooler Campus is the type of expansion of services he has sought since he became mayor in 2004.
“We constantly are looking for more and more medical facilities and doctors because it helps our citizens not to have to travel all the way to Savannah,” Lamb said. “Any steps that will help our citizens has got to be a big plus for our community.”
The merger’s goals
From the start, Hinchey said the merger, technically a joint operating agreement, is built on three goals:
• Consolidating clinical services to pool talented caregivers in one location rather than have them fragmented
• Eliminating duplication of services to provide care more efficiently
• Creating a more robust community outreach to the underserved
“It worked seamlessly,” Hinchey said, adding the boards of the respective hospitals quickly moved from a St. Joseph’s Hospital, Candler Hospital mentality and morphed into a single entity. “The two words became one word.”
It required some shifts in programs between the hospitals. For example, St. Joseph’s moved its obstetrics and pediatrics programs to the Mary Telfair Hospital at Candler. Most cardiology moved to St. Joseph’s Heart Hospital as well as orthopedics.
The April 1, 1997, agreement came at a time when the three major local hospitals — Memorial Medical Center (now Memorial University Medical Center) within blocks of Candler — were involved in revolving talks to restructure the local health care provider systems.
Candler and St. Joseph’s began their talks about possible collaboration in March 1996, shortly after and partly because of Memorial’s announcement that it would enter into exclusive affiliation talks with Columbia/HCA, the nation’s largest for-profit hospital chain.
Shortly afterward, Candler ended its 18-month-old talks with Memorial and opened talks with St. Joseph’s and, on Jan. 7, 1997, formally approved creation of a proposed unified health system that would rival the county’s largest health care provider in size.
‘Everybody had to give up something’
Cecil Abarr, a retired Braniger Organization executive and community volunteer, was chairman of the Candler Hospital board of trustees when discussions began on joining with St. Joseph’s.
“The environment for hospitals was bad all over the country” at the time, he said. “There were just too many of them. … We were starting to feel the pinch here.”
A group of hospital board members began kicking around what the future held, and a series of meetings followed. Among the concerns were the proposed merger of the Catholic and Methodist hospitals and how it would work, he said.
“A lot of things about the structure (of the merger) had to be worked out,” he said.
A series of frequent meetings involving Abarr, Harvey Granger, who chaired the St. Joseph’s board, Walton Nussbaum Jr. and Archie Davis, among others, resulted in the merger within 16 months.
After getting along with the discussions, they decided they needed to meet with Sister Margaret Beatty at St. Joseph’s and get her approval, Abarr said.
“She wasn’t a part of the final planning, she just approved it,” Abarr said. “She was very excited about how we got along.”
Beatty then was president of the Baltimore Regional Community of the Sisters of Mercy in the Southeast and a board member at St. Joseph’s Hospital. She now is vice president for mission services at St. Joseph’s/Candler. St. Joseph’s is a Sisters of Mercy hospital.
“Everybody had to give up something,” Beatty said of the merger. “Everybody was taking a risk. … We formed these human relationships where it didn’t make any difference which hospital was involved.”
Board members “were all prominent citizens of Savannah … all extraordinary leaders,” she said. “We came at it as a team, I think.”
Another key issue was who would be named to head the new entity, and Abarr said Hinchey was named by agreement of both boards.
“This is a real merger because we’re all really intertwined” with key department officials all working for the benefit of both hospitals.
”I think that’s one of the key things that worked,” Abarr said. “Really we look at it as one operation now. It’s pretty much a joint deal.”
He said concerns of working two faith-based groups has long since past, he said.
“That hasn’t impacted the whole situation,” Abarr said. “Oh, it has been a tremendous success. They really work well together. There’s no question.”
‘The stars were aligned’
The Catholic Church- based St. Joseph’s and United Methodist Church-based Candler shared very similar cultures. Both are faith-based with a common philosophy and vision, Hinchey said.
It was, he said, a textbook example of a board-driven operating agreement rather than a CEO-driven agreement.
He said such collaborations should proceed “not too fast, but don’t drag your feet either.”
“You lose momentum” through delay, he said. “You need to start acting like a good married couple.”
And Hinchey said the local agreement allowed for a rapid consolidation with the first steps completed within six months, not the 18-24 months commonly seen in similar mergers nationally.
Hinchey, who had been president of St. Joseph’s since May 1993, became president/CEO of St. Joseph’s/Candler on April 1, 1997.
A new 19-member board of trustees was elected with seven by Candler, six by St. Joseph’s and three by the Sisters of Mercy’s Baltimore Community. After six years it became a self-perpetuating board “representing everybody.”
“The stars were aligned in this deal,” Hinchey said. “We had the right people here at the right time – a perfect governance match. … They (trustees) thought St. Joseph’s/Candler, not St. Joseph’s and Candler.”
Looking back, Hinchey said, “I wouldn’t change a thing about it. … I never had any doubts about it, but I do have a healthy respect for the amount of work it takes to do it.
“As I start my 25th year as CEO, I was blessed to be there from day one and am gratified to see where it is 20 years later.”