Vatican gives thumbs-up to merger between Catholic Health Initiatives and Dignity Health

A proposed merger between Catholic Health Initiatives and Dignity Health has been given tacit approval from the Vatican, paving the way for one of the country's largest non-profit health systems in terms of revenue.

IMPACT

The new nonprofit system would encompass 139 hospitals and account for $28 billion in annual revenue, according to The Wall Street Journal. This exceeds the revenue of for-profit corporations such as McDonald's, the report said.

According to the Catholic Health Association of the United States, one in six American hospital patients receive care in Catholic hospitals.

THE TREND

Mergers and acquisitions continue at a record pace among hospitals. Earlier this month, faith-based systems Baylor Scott & White and Memorial Hermann signed a letter of intent to merge, bringing together 68 hospitals in Texas.

WHAT ELSE YOU NEED TO KNOW

The CHI-Dignity merger has been in the works for nearly a year, with a definitive agreement taking place last November. At that time, Archbishop Samuel J. Aquila issued a "nihil obstat" to CHI for the proposed deal.

A Latin phrase that means "nothing stands in the way," the nihil obstat stipulated that six conditions be met to ensure that CHI would not be cooperating with any "morally illicit" procedures as part of the deal, according to a statement from the Archdiocese of Denver.

The New York times reported in August that restrictions on certain "morally illicit" procedures could include services related to abortion or gender affirmation.

One of the conditions of Aquila's nihil obstat was that the final agreement be sent to the Vatican's Congregation for the Doctrine of Faith for its review and awareness of the agreement. 

In a letter dated October 5, Aquila informed CHI that as long as the other five conditions continued to be met, his nihil obstat will no longer be considered conditional.

While the merger still needs approval from various state regulators, the nihil obstat effectively clears the way for the merger to proceed.

In March, Dignity Health and SEIU-UHW member workers at California Dignity Health facilities reached a five-year contract as fears over job loss and wage cuts were spurred by the proposed merger with CHI.

An estimated 15,000 union healthcare workers in California ratified the new contract with Dignity Health, which expires April 30, 2023. It maintains employer-paid family healthcare and provides rising wages, with fully-paid, employer-provided family healthcare, which was a major point of contention in negotiations.

Also, workers will receive 13 percent raises spread over five years, a one percent bonus in the second year, and will maintain their defined benefit pension. Dignity Health will contribute an additional $500,000 a year to a joint labor-management training program that helps workers stay up-to-date with the changing healthcare environment.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com