The planned $28 billion megamerger between Catholic Health Initiatives (CHI) and Dignity Health is on track to close by the end of the year after receiving one of the final OKs it needed to move ahead: a thumbs-up from the Vatican.
Last January, Englewood, Colorado-based CHI and San Francisco-based Dignity first signed a definitive agreement to create a new nonprofit Catholic health system, which would make it one of the largest health systems in the U.S. with 700 care sites and 139 hospitals across 28 states.
The approval from the Vatican was first reported by Modern Healthcare, which also reported that the approval was somewhat in doubt because the complex merger includes non-Catholic hospitals which may not be required to adhere to all religious standards required of Catholic hospitals.
Dignity Health officials told FierceHealthcare that the archbishops of Denver and San Francisco have both issued what is called a “nihil obstat,” which means they found nothing objectionable about the proposed deal on moral or doctrinal grounds.
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What happens next? Dignity Health’s sponsors are taking an additional step to transfer their assets to the combined ministry, and that process is underway, Dignity Health officials said. The deal is still subject to state approvals.
Earlier this week, CHI and Dignity announced their new governing board, including six existing board members from each health system and the two current chief executive officers—Dignity's Lloyd Dean and CHI's Kevin E. Lofton. An additional member will be named after the deal closes.
Tessie Guillermo, current chairwoman of the Dignity Health board, has been recommended to serve as chairwoman of the new board and Chris Lowney, current chairman of the CHI board, as vice chairman.
When complete, the combined health system will be the largest Catholic health system in the U.S.
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Together, the systems earned $28.4 billion in revenue in 2017, had $38 billion in assets and gave $4.8 billion in charity care, community benefit and the unpaid cost of government programs.