Catholic Health Initiatives and Dignity Health to Merge

Rodiano Bonacci
Dicembre 8, 2017

San Francisco's Dignity Health plans to merge with Catholic Health Initiatives, a Colorado-based health system, in a deal that would create one of the nation's largest nonprofit health systems by revenue, the organizations announced Thursday.

The joint organizations would have a 28-state footprint, including North Dakota, with 700 care sites and 139 hospitals nationwide, about 159,000 employees and more than 25,000 physicians and clinicians.

"We are joining together to create a new Catholic health system ... that is positioned to accelerate the change from sick-care to well-care across the United States", said Kevin E. Lofton, chief executive officer of CHI, in a press release.

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The combined organization will have 139 hospitals and almost 160,000 employees, including more than 25,000 doctors.

"We foresee an incredible opportunity to expand each organization's best practices to respond to the evolving health care environment and deliver high-quality, cost-effective care", Lloyd Dean, president and CEO of Dignity Health, said in a statement.

The governing board for the new organization, the Board of Stewardship Trustees, will include six members from each legacy board and the two CEOs.

The two health systems are similar in size - Dignity reported $12.9 billion in revenue in 2016, Catholic Health Initiatives reported $15.5 billion - and would have a combined annual revenue of $28.4 billion.

The potential merger comes as CHI continues to be dogged by financial issues.

S&P said it will likely update CHI and Dignity Health's respective ratings before the merger deal closes. Neither system has hospitals in IL now, but the combined operation will establish its corporate headquarters in Chicago. Dignity's debt is lower at $5.25 billion in March, though it pays $408 million annually in interest on that debt.

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