S&P: Merger with CHI likely to trigger downgrade for Dignity Health

Source Raycom News Media

Source Raycom News Media

Catholic Health Initiatives, the parent organization of CHI Health, announced Thursday that it plans to merge with another Catholic health system. The new health system will be headquartered in Chicago, operate under a new name and have an annual revenue of.

The deal is expected to close sometime late next year, pending federal, state and church approvals.

CHI is based in Englewood, Colorado, and operates 103 hospitals, including four academic health centers and major teaching hospitals as well as 30 critical-access facilities in 18 states. Dignity Health and CHI have an established track record of successful partnerships and affiliations on initiatives spanning telehealth, microhospitals, and precision medicine. Local facilities will continue operating under their current names.

CHI, which is based in the Denver area, said it is combining forces with Dignity Health, a Catholic healthcare system based in San Francisco. Neither system has hospitals in IL now, but the combined operation will establish its corporate headquarters in Chicago.

"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", Lloyd Dean, president and CEO of Dignity Health, said in a statement.

By comparison, at Kaiser Permanente, the nation's largest nonprofit integrated health system, 2016 operating revenue was $64.6 billion.

The proposed merger is the most recent example of consolidation in the health care sector, which has been on the rise for several years - prompting worry that less competition means higher prices and fewer choices for consumers.