The proposed merger of Denver-based Catholic Health Initiatives, parent of Toledo, OH-based CHI Living Communities, and San Francisco-based Dignity Health to form the country’s largest nonprofit hospital system by revenue is on track to close by the end of the year, with a recent letter from the Vatican indicating that local bishops could decide the matter.
“The Archbishops of Denver and San Francisco have both issued what is called a ‘nihil obstat,’ which means they find nothing objectionable about the proposed ministry alignment on moral or doctrinal grounds,” Dignity Health said in a statement to McKnight’s Senior Living. “The ministry alignment between Catholic Health Initiatives and Dignity Health is proceeding on schedule, with the close anticipated by the end of the calendar year, subject to state approvals.”
Some deal-watchers reportedly wondered whether the complex terms of the potential affiliation would pose a challenge to its approval by the church. “[Fifteen] of Dignity’s 39 hospitals are historically non-Catholic and provide services that are prohibited under Catholic doctrine, forcing the dealmakers to craft a merger model that worked around the directives,” Modern Healthcare reported.
The two health systems announced their intention to explore aligning their organizations in October 2016 and in December 2017 announced a definitive agreement to combine. Just last week, the organizations announced a new board to become effective when the alignment is finalized.The new system will include more than 700 care sites and 139 hospitals, with approximately 159,000 employees across 28 states. Total combined annual revenues are estimated at approximately $30 billion.
