Dignity Health officials say merger with CHI will not impact Sierra Nevada Memorial Hospital | TheUnion.com

Dignity Health officials say merger with CHI will not impact Sierra Nevada Memorial Hospital

Dignity Health, the parent company of Sierra Nevada Memorial Hospital, last week announced a merger with Catholic Health Initiatives, a move that will make the new health system the largest not-for-profit hospital company by revenue.

The merger was approved by the boards of both groups and is anticipated to close in the second half of 2018; it will be subject to federal, state, and church approvals.

A spokeswoman for Dignity Health said the merger is not anticipated to have any impact on Nevada County.

"We will continue to provide the same range of services that we provide now; services currently available at each system will continue to be available," the spokeswoman said. "We do not expect any changes that will affect patients right away. The same great caregivers, physicians, and other advanced practice clinicians will continue to be in Grass Valley to support the community."

The new health system, which has yet to be named, will include more than 700 care sites and 139 hospitals with approximately 159,000 employees across 28 states, and more than 25,000 physicians and other advanced practice clinicians.

The new company will be based in Chicago, and will be led by both Lloyd Dean, president and chief executive officer of Dignity Health, and Kevin E. Lofton, chief executive officer of CHI.

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"By combining our ministries and building upon our shared mission, we will expand our commitment to meeting the needs of all people with compassion, regardless of income, ethnicity, or language," said Lloyd Dean, president and chief executive officer of Dignity Health. "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."

The combined entity could spread costs over a bigger platform, expand access in rural communities and use complementary skill sets to face competitive markets, Lofton said.

Dignity Health was formed in 1986 when two congregations of the Sisters of Mercy joined their 10 hospitals together to form Catholic Healthcare West. The organization, now based in San Francisco, severed formal ties to the church in 2012 when it changed its name from Catholic Healthcare West.

Dignity's facilities in the region include Mercy General in Sacramento; Mercy Hospital of Folsom, Mercy San Juan in Carmichael; Methodist Hospital of Sacramento, and Woodland Memorial Hospital.

Catholic Health Initiatives was formed in 1996 through the consolidation of four Catholic health systems; it is based in Englewood, Colorado and operates in 17 states with 100 hospitals. CHI reportedly has been struggling financially and had planned to sell its money-losing hospitals.

The merger has been in the works for more than a year. According to Modern Healthcare, the merger would create the nation's largest not-for-profit hospital company by revenue, with combined annual revenue of around $28 billion and 142 hospitals. St. Louis-based Ascension, with 141 hospitals, had revenues totaling $22.6 billion in 2017.

According to press materials on the merger, consolidations result in reducing costs and enhancing quality and services; a release quoted a study commissioned by the America Hospital Association that found that mergers occurring between 2009 and 2014 reduced by 2.5 percent (amounting to $5.8 million) annual operating expenses at acquired hospitals.

But whether those cost efficiencies will be passed on to the consumer is in question.

Dignity Health and Sutter Health were the focus of a 2016 study that showed the dominant hospital chains drove up health-care prices as they expanded over a 10-year period. The study found that Blue Shield of California's average payment per admission to Dignity and Sutter facilities increased 113 percent from 2004 to 2013, substantially more than prices paid to all other California hospitals (70 percent).

Contact reporter Liz Kellar at 530-477-4236 or by email at lizk@theunion.com.

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For more information on the proposed merger between Dignity Health and Catholic Health Initiatives, go online to http://www.advancinghealthcaretogether.org.