- Dignity Health and Catholic Health Initiatives revealed Monday that they could be in merger talks.
- The not-for-profit hospital systems signed a non-binding letter of intent "to explore aligning their organizations and expanding their mission of service in communities across the nation." Terms were not disclosed.
- The deal, if confirmed and completed, would create one of the largest nonprofit health systems in the U.S. by revenue, according to The Wall Street Journal.
News of the possible merger follows Dignity and CHI’s launch last month of the Precision Medicine Alliance, which aims to speed diagnosis and treatment protocols using genetic information. The program — which will initially focus on advanced diagnostic tumor profiling in cancer treatment — is the nation’s largest community-based precision medicine program, according to the two systems.
CHI and Dignity pointed to a number of ways the systems complement one another, including Dignity’s track record with “innovative, diversified care-delivery partnerships” and CHI’s experience in clinical and home health services and research.
A merger would combine Englewood, CO-based CHI’s 103 hospitals with San Francisco-based Dignity’s 39 hospitals, with annual revenues of about $27.8 billion, based on recent financial reports. It would also create a new mega-health system in the western U.S.: CHI operates in 18 states, but not Arizona, California and Nevada; Dignity operates in in those three states and 19 others.
CHI has struggled recently, posting a net loss of $568.1 million in the first nine months of fiscal 2016, according to Modern Healthcare. That follows a meager $3.1 million in operating income on $15.2 billion in revenue for 2015. In June, Fitch Ratings knocked down CHI’s credit rating from A+ to BBB+.