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Dignity Health, CHI Merging to Form New Catholic Health System

December 8, 2017
by Heather Landi
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Catholic Health Initiatives (CHI), based in Englewood, Colorado, and San Francisco-based Dignity Health officially announced they are merging and have signed a definitive agreement to combine ministries and create a new, nonprofit Catholic health system.

The deal, expected to close in the second half of 2018 and subject to federal, state and church approvals, will create a new health system that includes more than 700 care sites and 139 hospitals across 28 states. The two health systems announced merger talks back in October.

In a press release about the merger, the health systems said the combination of the two organizations will build a “stronger operational and financial foundation to expand access to quality care, build upon complementary resources and capabilities, and reinvest in critical areas to accelerate improvements in care delivery.”

CHI operates in 17 states and comprises 100 hospitals, including three academic health centers and major teaching hospitals as well as 30 critical-access facilities and other facilities and services. CHI reports $15.5 billion in revenue. The two health systems are geographically complementary with no overlap across hospital service areas. Dignity Health is a 22-state network with more than 400 care centers including hospitals, urgent and occupational care, imaging centers, home health and primary care clinics and reported FY2017 revenue of $12.9 billion.

Key strategic and reinvestment priorities for the new system will include:

  • The expansion of community-based care, offering access to services in a variety of outpatient and virtual care settings closer to home;
  • Clinical programs focused on special populations and those suffering from chronic illnesses to keep people and communities healthier for longer; and
  • Further advancement of digital technologies and innovations like stroke robots and Google Glass, which create a more personalized and efficient care experience

“We are joining together to create a new Catholic health system, one that is positioned to accelerate the change from sick-care to well-care across the United States,” Kevin E. Lofton, chief executive officer of CHI, said in a statement. “Our new organization will have the talent, depth, breadth, and passion to improve the health of every person and community we serve."

“By combining our ministries and building upon our shared mission, we will expand our commitment to meeting the needs of all people with compassion, regardless of income, ethnicity, or language,” Lloyd Dean, president and chief executive officer of Dignity Health, said in a prepared statement. "We foresee an incredible opportunity to expand each organization's best practices to respond to the evolving healthcare environment and deliver high-quality, cost-effective care

The new organization will be led by an office of the CEO. Dean and Lofton will both serve as CEOs, each with specific and independent responsibilities and decision-making authority. Together, the CEOs will jointly oversee strategy and integration planning. Lofton will have authority for mission, advocacy, sponsorship and governance, system partnerships, and information technology. Dean will have authority for all of operations, including clinical, financial, and human resources. They will work side-by-side with the executive team to plan a successful integration.

The new organization plans to establish its corporate headquarters in Chicago and operate under a new name that will be chosen in the second half of 2018.

In September 2016, the two systems formed Precision Medicine Alliance LLC (PMA), which will create the largest community-based precision medicine program in the country. A precision oncology program is being implemented in three service areas, and four-to-six more service area launches are planned across the country in the next 12 months. The program’s objective is to be available at nearly 150 CHI and Dignity Health and care centers across the U.S., serving approximately 12 million patients annually.

 

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