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Dignity Health, Catholic Health Initiatives explore merger

Merger talks are expected to continue into 2017, systems said.

Beth Jones Sanborn, Managing Editor

Dignity Health and Catholic Health Initiatives, two of the largest nonprofit health systems in the country, may become one, the systems announced Monday.

The two organizations have signed a letter of intent, a non-binding process that is usually an early part of the merger process.

Terms of the potential deal were not disclosed and the systems said they expect discussions to continue through early 2017.

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

[Also: Dignity Health-GoHealth Urgent Care venture opens first clinic, with a dozen more planned]

It is the second big announcement from Dignity and CHI following their September notice that the two were partnering on the Precision Medicine Alliance, which the systems said will create the largest community-based precision medicine program in the country. It will offer patients from both healthcare systems faster and more accurate diagnostic and treatment protocols based on their genetic and molecular profile information.

"The Alliance will initially focus on advanced diagnostic tumor profiling in cancer treatment and will later expand into other areas such as cancer and cardiovascular risk, and pharmacogenomics. The program will also support oncology research by populating a database that will become the largest collection of clinical cancer data ever compiled by a single organization," the systems said in a statement.

[Also: Catholic Health Initiatives divesting health plan after hefty financial losses]

The program will also integrate their electronic medical records into a data-management infrastructure that will offer easy access to clinical expertise and clinical trial information. It will be available at nearly 150 hospitals and care centers across the United States and serve about 12 million patients annually.

San Francisco-based Dignity Health operates 40 hospitals while Catholic Health Initiatives, based in Englewood, Colorado is the country's third largest nonprofit system and operates 103 hospitals across 18 states.

Twitter: @BethJSanborn