Dignity Health and Catholic Health Initiatives formally clinched their merger creating a nonprofit health system called CommonSpirit Health.
The $29 billion system will serve 21 states with more than 700 care locations and 142 hospitals. The company also includes research, virtual care and home health capabilities.
- Meanwhile, HCA Healthcare closed its sale of Mission Health, a North Carolina-based six-hospital system, for about $1.5 billion.
The deals are the latest hospital M&A activity as health systems look for opportunities for growth and scale. They also reflect a growing trend of states flexing regulatory muscle in considering how companies can be held accountable after major deals.
CommonSpirit Health has about 150,000 employees and 25,000 physicians and advanced practice clinicians. Englewood, Colorado-based CHI CEO Kevin Lofton and San Francisco-based Dignity Health President and CEO Lloyd Dean will both serve as CEOs for the new health system.
"We didn't combine our ministries to get bigger, we came together to provide better care for more people," Dean said in a statement. "We created CommonSpirit Health because in order to solve national health challenges, we need the breadth, scope and resources to make a nationwide impact. We believe that no one should ever have to choose between being healthy and putting food on the table."
The system said it will focus on five key areas: expand clinical capabilities, such as focusing on patients with chronic and complex conditions; shift toward services outside of hospitals; invest in technologies for more convenient care; address social determinants of health; and retain and recruit an experienced workforce "where people embrace service to others."
In announcing the new company, officials promoted the need to address how social needs affect a person's health. Dean said the system "will be a champion for the common good and extend access to good health for everyone, especially those who are most in need."
In November, California's Department of Justice granted conditional approval of the merger. As part of the approval, the state demanded conditions, such as a 100% discount for patients who earn 250% of the federal poverty level. CommonSpirit Health must also allocate $20 million over six years to treat and support homeless patients.
The two companies planned on closing at the end of 2018, but delayed the closing a month to allow them to finalize combining operations.
The system's locations and services will retain the names of the CHI and Dignity Health facilities.
Meanwhile, HCA, which now has 185 hospitals and about 1,800 sites of care in 21 states and the United Kingdom, completed its acquisition of Mission Health, which serves western North Carolina. The state's attorney general gave the OK earlier this month.
Net proceeds from the agreement will go to Dogwood Health Trust, a new foundation that will "enable significant investments, encourage partnerships and facilitate coordination with others to analyze, understand and address core social determinants of health and well-being for the people and communities of Western North Carolina."
HCA Healthcare also plans to build a 120-bed inpatient behavioral health hospital in Asheville, North Carolina, a replacement hospital for Angel Medical Center in Franklin and complete the new Mission Hospital for Advanced Medicine in Asheville. The company additionally plans to create a $25 million innovation fund.