Dignity Health, CHI delay merger closing until January

Handshake business deal executives
Dignity Health and CHI have delayed the closing of their merger. (Pixabay)

Dignity Health and Catholic Health Initiatives are delaying the closure of their union until the new year, they announced Friday. 

Dignity said in a statement (PDF) that the two health systems would operate jointly as CommonSpirit Health beginning Jan. 31, instead of Dec. 31 as was originally planned. 

“We continue to finalize the last steps to bring our operations together and to combine our ministries, including the completion of licenses, certifications and other items,” Dignity said. “We are looking forward to completing our alignment, and we also want to make sure this is seamless for those we serve.” 

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Dignity and CHI cleared two major regulatory hurdles—approval by the Vatican and approval from California’s attorney general—over the past several months, and leaders said the deal was on track to close by the end of 2018 as planned. 

Once the merger closes, CommonSpirit Health will be the largest nonprofit health system in the country by revenue. The system will include nearly 700 sites of care, 139 of which are hospitals, across 21 states. 

RELATED: Executive Spotlight—Dignity Health VP Peggy Sanborn on the important role geography plays in expansion 

Dignity CEO Lloyd Dean and CHI CEO Kevin Lofton will both serve as chief executive for CommonSpirit, each with his own responsibilities and oversight. 

California AG Xavier Becerra set several guardrails in his approval of the deal, with the goal of preserving emergency and women’s healthcare at CommonSpirit’s facilities over the next decade. Under the deal the health system will be required to notify the state if it intends to shutter either service in years six to 10 of operation. 

California also required that CommonSpirit invest $20 million in a program targeting homeless patients over the next six years, with $10 million required in the first three.  

The AG also made several stipulations aimed at promoting affordability for low-income patients. CommonSpirit must provide a 100% discount to patients making up to 250% of the federal poverty level, and must train staff to provide information on payment assistance programs. Onlie and print materials about these programs must also be easy for patients to access, the AG said. 

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