Dignity Health, Catholic Health Initiatives agree to merger

More than a year after first announcing they were negotiating a merger, Dignity Health and Catholic Health Initiatives (CHI) have a definitive agreement to create a massive nonprofit health system based out of Chicago with more than $28 billion in combined revenue.

Englewood, Colorado-based CHI is the larger of the two systems, operating 103 hospitals in 18 states. San Francisco-based Dignity has hospitals in Arizona, California and Nevada, where CHI doesn’t have a presence. In all, the new health system would have 139 hospitals and 700 care facilities in 28 states and employ 159,000 people, including 25,000 physicians.

“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,” Kevin E. Lofton, CEO of CHI, said in a statement. “Our new organization will have the talent, depth, breadth, and passion to improve the health of every person and community we serve.”

Lofton and Dignity’s Lloyd Dean will stay on as co-CEOs. According to the press release, they’ll both have responsibility for strategy and integration planning, while splitting other duties: Lofton overseeing areas like governance, system partnerships, advocacy, and information technology, while Dean would be in charge of all clinical and financial operations.

Both men will sit on the combined company’s new board along with six members each from the current Dignity and CHI boards.

“By combining our ministries and building upon our shared mission, we will expand our commitment to meeting the needs of all people with compassion, regardless of income, ethnicity, or language,” Dean said. “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.”

More changes are planned as the merger moves towards its anticipated completion date in the second half of 2018 The new company will also have a new name—yet to be determined—and a new corporate headquarters in Chicago, with the current headquarters for both companies remaining open.

“This decision was made because Chicago is centrally located, has convenient access to all parts of the country where our ministries are located, and offers good infrastructure to support a national organization,” Dignity said in a statement.