Catholic Health Initiatives and Dignity Health will merge to become CommonSpirit Health, forming one of the country’s largest health systems. CHI operates four hospitals and several clinics in Arkansas.
Completion of the merger was delayed one month, until Jan. 31, but no explanation was given.
Chad Aduddell, CEO of CHI St. Vincent in Little Rock, said in an emailed statement, “Our Catholic affiliation will not change as CHI St. Vincent continues to answer the call that the Sisters of Charity of Nazareth and the Sisters of Mercy began more than 130 years ago. A shared commitment to our healing ministry is a key part of this merger as we, like every health care institution at this time, work to ensure a sustainable future within a rapidly changing industry while delivering the highest possible quality of care to our patients.”
Tony Houston, outgoing president of CHI St. Vincent Hot Springs, said the names of Arkansas hospitals will remain the same despite the merger.
“We aren’t looking just to take what Dignity does and what CHI does and make a collection of those two. We’re looking to create something better than what we have,” Houston said in a phone interview with Arkansas Catholic.
A website, advancinghealthcaretogether.org, was created to address questions surrounding the merger, including assuring readers that the health care entity will remain Catholic.
“Consistent with the heritage of the two legacy organizations, the new ministry will be Catholic. Other-than-Catholic facilities will not become Catholic. They will continue to operate under the Statement of Common Values and in alignment with the combined ministry’s mission and values,” it stated.
Two years ago, CHI and Dignity Health signed a definitive agreement to merge, with discussions stemming back to 2016. Both company CHI and Dignity Health CEOs Kevin Lofton and Lloyd Dean will remain as joint CEOs as part of the merger.
In Arkansas, CHI operates St. Vincent Infirmary, Little Rock; St. Vincent Hot Springs; St. Vincent North, Sherwood; and St. Vincent Morrilton.
According to a 2017 Modern Healthcare article, the merger would allow CHI to refinance its debt with Dignity Health’s higher credit rating.
In 2017, S&P Global Ratings dropped CHI from A-minus to BBB-plus in regard to its debt. Modern Healthcare stated in March 2017, “CHI’s annual debt service, or interest paid on its bonds and borrowing, is about $460 million on total debt of $9 billion. … Dignity’s overall debt is lower at $5.25 billion, but it, too, has hefty maximum debt service to carry, $408 million annually.”
Catholic hospitals are governed by the Ethical and Religious Directives for Catholic Health Care Services, released in its fifth edition in 2009 by the United States Conference of Catholic Bishops. The Vatican’s Congregation for the Doctrine of the Faith also released 17 principles in 2014 regarding collaboration with non-Catholic entities.
Though Dignity Health, formerly Catholic Healthcare West, was founded by the Sisters of Mercy in 1986, it broke formally from the Church in 2012, though some hospitals kept a Catholic affiliation. According to Modern Healthcare, 15 of Dignity Health’s 39 hospitals are historically non-Catholic, providing services that are not in line with Catholic doctrine.
As part of the merger, all but one of Dignity Health’s non-Catholic hospitals would be placed in a separate corporation, allowing them to continue to perform services, such as post-delivery tubal ligations, according to Modern Healthcare.
According to catholichealth initiatives.org, CHI, based in Colorado, has 100 hospitals in 18 states, provided $1.14 billion in financial assistance and services to the poor and generated $15 billion in operating revenues for 2018. Company assets are approximately $20.5 billion.
Based in San Francisco, Dignity Health has 39 hospitals, several clinics and other health-related centers. The company provided $2.1 billion in charitable services. Combined assets between CHI and Dignity Health are $39.3 billion, according to a May 14 Wall Street Journal article.
The merger, the WSJ said, would make CommonSpirit Health one of the largest U.S. hospital systems in the country with $28 billion in revenue annually.
The new headquarters will be located in Chicago.
Various congregations of nuns and Denver Archbishop Samuel Aquila and San Francisco Archbishop Salvatore Cordileone weighed in on the proposed merger.
On Nov. 28, 2017, Archbishop Aquila issued a nihil obstat, Latin for “nothing stands in the way,” to CHI which listed six conditions. It does not imply approval or agreement of a merger, said Mark Hass, director of public relations for the Archdiocese of Denver.
However, the bishops have no direct authority over the hospital system, which reports to the Catholic Health Care Federation.
Though all conditions have not been made public, one did include a request the Vatican review the agreement, Hass said. He also told Arkansas Catholic that the conditions revolved around a clear Catholic identity and “prominent language in the definite agreement as to the morally illicit procedures,” as well as “continued dialogue and review between the Catholic hospitals, the CHCF and the local bishops, and an understanding that the local bishops will be consulted when questions arise surrounding new procedures or moral issues.”
On Sept. 4, the Vatican’s Congregation for the Doctrine of Faith released a letter saying it had reviewed the agreement for the merger and would allow local bishops to decide the matter.
Archbishop Aquila informed CHI Oct. 5 that as long as the five other conditions listed in his nihil obstat continue to be met, his portion of the review of the proposed merger is complete, Hass said.
Deb Roybal, market vice president for mission integration at CHI St. Vincent in Little Rock, said charitable efforts that have been a hallmark of CHI care will not change.
“Advocacy and social justice became a fairly significant theme of that merger,” she said, adding “I think it will enhance” charitable efforts and impact.
As far as patients, Catholic or not, Roybal said they should not notice any decline in care.
“If anything our focus on quality and safety will enhance the care they get,” she said.
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