Saint Joseph Mercy Health System and Michigan Medicine Finalize Terms for JV of St. Joseph Mercy Chelsea


Saint Joseph Mercy Health System (SJMHS) and Ann Arbor-based University of Michigan’s Michigan Medicine have signed a definitive agreement, effective immediately, to create a master affiliation and a joint venture for the 133-bed St. Joseph Mercy Chelsea hospital (SJMC). The joint venture is to expand surgical and inpatient services at the hospital.

SJMHS, a health care organization currently serving seven counties in southeast Michigan, and Michigan Medicine, the academic medical center of the University of Michigan, signed a letter of intent in March 2017 to examine the feasibility and structure of the proposed joint venture.

Terms of a definitive agreement have been finalized and both parties 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.

On Thursday, the U-M Board of Regents approved the joint venture following Trinity Health Michigan Board’s approval.

“SJMHS has a long-standing, positive reputation for delivering high quality care, which makes this an excellent partnership for Michigan Medicine,” says David Spahlinger, president of the University of Michigan Health System, the clinical care enterprise of Michigan Medicine. “With this affiliation, Chelsea-area patients will have expanded care choices closer to home.”

Because Michigan Medical serves patients across the state using a network of relationships with health systems, hospitals, and physicians, Spahlinger says expanding the statewide network will allow for a greater presence in communities across the state, including communities adjacent to Ann Arbor as well as in west Michigan. Additionally, he says, formation of strategic relationships will help manage the growing need for hospital beds in the University of Michigan hospitals in Ann Arbor.

“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,” says 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.”

Building upon the existing Michigan Medicine family medicine residency clinic, which has been located on the St. Joseph Mercy Chelsea campus since 1978, the joint venture will expand surgical procedures provided by Michigan Medical and increase access to Michigan Medicine physicians for patients in Chelsea and across western Washtenaw County.

As part of the Saint Joseph Mercy Health System, Michigan Medicine and Trinity Health own and operate St. Joseph Mercy Chelsea Hospital. Michigan Medicine and Trinity Health 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.

Construction on the seventh and eighth operating rooms at St. Joe’s Chelsea is slated to begin shortly, with more services and surgical procedures continuing 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,” says 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 all Michigan Medicine employees, including doctors, residents, and house officers who may work at Chelsea, will remain employees of the University of Michigan. No staff reductions will take place as a result of this agreement and additional colleagues will be recruited as needed. St. Joseph Mercy Chelsea will retain its Catholic identity and continue to abide by the ethical and religious directives.

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