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Dignity Health in Merger Talks With Colorado-Based Catholic Health Initiatives

Marian Regional Medical Center in Santa Maria among hospitals that would affected by the deal

Dignity Health, parent of Marian Regional Medical Center in Santa Maria, is in merger talks with Englewood, Colorado-based Catholic Health Initiatives Click to view larger
Dignity Health, parent of Marian Regional Medical Center in Santa Maria, is in merger talks with Englewood, Colorado-based Catholic Health Initiatives (Janene Scully / Noozhawk photo)

The parent organization of Marian Regional Medical Center in Santa Maria is in merger talks with another Catholic-based nonprofit health-care organization.

Dignity Health, which includes Marian plus two hospitals in San Luis Obispo County, and Catholic Health Initiatives have signed a non-binding letter of intent to explore aligning their organizations, they said in a written statement Monday.

"Health care is at a turning point in our nation," said Lloyd H. Dean, president/ chief executive officer of Dignity Health. "Through a stronger strategic and financial foundation, an aligned ministry would accelerate our ability to advance our healing mission into the future."

"The potential to align the strengths of these two organizations will allow us to play a far more significant role in transforming health care in this country," said Kevin E. Lofton, chief executive officer of Catholic Health Initiatives. "Together, we could enhance our shared ministry as the health industry transitions to a system that rewards the quality and cost-effectiveness of care.”

The talks are expected to continue through early 2017, the statement said.

Dignity Health, which is based in San Francisco, also owns French Hospital Medical Center in San Luis Obispo and Arroyo Grande Community Hospital plus St. John’s Regional Medical Center in Ventura County.

Dignity says it has has more than 9,000 physicians, 62,000 employees, and 400 care centers, including hospitals, urgent and occupational care, imaging centers, home health, and primary care clinics. 

Catholic Health Initiatives, a nonprofit, faith-based health system formed in 1996 through the consolidation of four Catholic health organizations, is the nation’s third-largest nonprofit health system. 

The Englewood, Colorado-based CHI operates in 18 states and comprises 103 hospitals, including four academic health centers and major teaching hospitals as well as 30 critical-access facilities; community health-services organizations; accredited nursing colleges; home health agencies; living communities; and other facilities and services. 

News of the merger discussions comes as Catholic Health Initiatives has experienced weak financial results when hospital operations struggled following a string of acquisitions, the Wall Street Journal noted in an article about the merger discussions.

The two organizations’ acute-care facilities do not have any geographical overlap, they noted. Both also include Catholic and other-than-Catholic health-care affiliates. 

Last month, the two nonprofit organizations announced the formation of a partnership called the Precision Medicine Alliance LLC to create the largest community-based precision medicine program in the country.

Noozhawk North County editor Janene Scully can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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