Dignity Health, CHI to merge and form new Catholic health system

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The new health system will employ 159,000 people and more than 25,000 physicians and other advanced practice clinicians.

Catholic Health Initiatives (CHI) and Dignity Health made it official and signed a definitive agreement to create a new, nonprofit Catholic health system. The new name of the organization still hasn’t been determined.

The deal, expected to close in the second half of 2018 pending federal, state and church approvals, will allow the organizations to expand their reach via 700 care sites and 139 hospitals across 28 states.

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CHI is based in Englewood, Colorado, and operates 103 hospitals, including four academic health centers and major teaching hospitals as well as 30 critical-access facilities in 18 states. But those states do not include Arizona, California and Nevada, where Dignity Health operates hospitals.

Together, the systems earned $28.4 billion in revenue in 2017 and also had $38 billion in assets and gave $4.8 billion in charity care, community benefit and the unpaid cost of government programs.

"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,” said Kevin E. Lofton, chief executive officer of CHI, in the announcement (PDF). “Our new organization will have the talent, depth, breadth, and passion to improve the health of every person and community we serve."

Lloyd Dean, president and chief executive officer of Dignity Health, said the combined ministries and shared missions will help to expand each organization’s best practices to respond to the evolving healthcare environment and deliver high-quality, cost-effective care.

To meet those needs, the newly formed organization will focus on three strategic priorities:

• Expansion of community-based care that offers access to services in a variety of outpatient and virtual care settings closer to home

• Clinical programs for special populations and those who suffer from chronic illnesses to keep people and communities healthier for longer

• Further advancement of digital technologies and innovations like stroke robots and Google Glass, which create a more personalized and efficient care experience

Governance structure

The new health system will open a corporate headquarters in Chicago, a new location for the organizations. It will employ 159,000 people and more than 25,000 physicians and other advanced practice clinicians.

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, according to the announcement.

Lofton will oversee 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 intend to work side-by-side with the executive team to plan a successful integration.

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 new organization will operate under a new name that will be chosen in the second half of 2018. Local facilities will continue operating under their current names.

A national platform and research

The new organization aims to become a national platform for innovation and research, according to the announcement. This platform would capitalize on existing intellectual property and research capabilities, to position the new organization as a partner for other entrepreneurial organizations. Dignity Health and CHI have an established track record of successful partnerships and affiliations on initiatives spanning telehealth, microhospitals, and precision medicine.

In September 2016, the two systems formed the Precision Medicine Alliance to 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.