Church reviews possible Catholic hospital mega-merger

Catholic ethics and church law must be at the center of a merger of two major Catholic health care systems that, if approved, will create the largest non-profit health system in the country, an archdiocesan official says.

Denver, Colo. (CNA/EWTN News) - Denver-based Catholic Health Initiatives and San Francisco-based Dignity Health announced the proposed merger Dec. 7.

They aim to create a new Catholic healthcare system, set to be based in Chicago. The combined health system will be run by the CEOs of both companies. It will include 139 hospitals, employ 159,000 people, and have a combined revenue of $28.4 billion.

The merger requires regulatory approval and also scrutiny that it does not violate Catholic ethical and canonical norms.

Denver Archbishop Samuel J. Aquila and Archbishop Salvatore Cordileone of San Francisco are among those responsible for analyzing the moral and ethical considerations of the proposed merger for the health systems based in their respective cities, David Uebbing, chancellor for the Archdiocese of Denver, told CNA.

The USCCB's "Ethical and Religious Directives for Catholic Health Care Services" require that the merger of the healthcare systems receive a "nihil obstat" from the diocesan bishop in the places where the systems are headquartered.

Uebbing said the review process in Denver has already involved "an extensive, multi-month" analysis of the proposal and consultation with the bishops affected. The process has involved consultation with legal, canonical and health care ethics experts.

"A nihil obstat is a negative declaration that essentially says, 'nothing stands in the way'," Uebbing said. "A nihil obstat has limited scope, i.e., determining that there is nothing morally or doctrinally objectionable in the proposed corporate structure. It does not convey approval or agreement with the proposal."

Both health care systems are sponsored by canonical organizations overseen directly by the Vatican, which, according to canon law, will also need to approve the merger.

A new name for the proposed system will be announced sometime after mid-2018, pending final approval from federal and state officials as well as Catholic officials.

The leaders of both health care systems said the proposed merger would be better for health care.

"We are joining together to create a new Catholic health system, one that is positioned to accelerate the change from sick-care to well-care across the United States," said Kevin E. Lofton, the CEO of Catholic Health Initiatives.

He said the organization will have "the talent, depth, breadth, and passion to improve the health of every person and community we serve," the Houston Chronicle reports.

Lloyd Dean, president and CEO of the San Francisco-based Dignity Health, said the merger will build upon a shared mission and will "expand our commitment to meeting the needs of all people with compassion, regardless of income, ethnicity, or language."

"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," he continued.

Currently Catholic Health Initiatives has hospitals in 17 states, while Dignity Health has facilities in 22 states, including those operating under brands such as U.S. HealthWorks, the Sacramento Bee reports.

CNA contacted Dignity Health, and the Archdiocese of Chicago for comment but did not receive a response by deadline. Catholic Health Initiatives was unable to respond to a request for comment.

In 2012 Dignity Health, adopted a new board structure and changed its name from Catholic Healthcare West, deemphasizing its ties to the Catholic Church. Then-Archbishop George Niederauer of San Francisco determined the changes were consistent with Catholic morals.

At the time, it was reported that the system's Catholic hospitals would continue to adhere to the Ethical and Religious Directives for Catholic Health Care Services.

The system's non-Catholic hospitals adhere to the system's "Statement of Common Values." Those rules prohibit abortion and in-vitro fertilization but not sterilization procedures like tubal ligations.

Catholic Healthcare West, later renamed Dignity Health, came under scrutiny following a 2009 incident at St. Joseph's Hospital and Medical Center in Phoenix, which is part of the health system. The hospital's ethics board decided that a direct abortion could be performed on a woman who was suffering severe medical complications, in violation of Catholic teaching that direct abortion is inherently evil.

In December 2010 Bishop Thomas J. Olmsted of Phoenix revoked the Catholic status of the hospital after an investigation found both the hospital and its parent company involved in a pattern of behavior that violated Catholic health care ethics, including creating and managing a government program that offers birth control, sterilization procedures and abortion.

In January 2012 the health network's CEO, Dean, said concerns about the system's Catholic affiliation hindered potential agreements with other hospitals.

The expansion of Catholic hospitals operating according to Catholic teaching has drawn opposition from critics, including the American Civil Liberties Union and the MergerWatch project. Those groups co-authored a 2013 report that claimed the growth of Catholic hospitals was a "miscarriage of medicine."

The report said the ACLU's advocacy in the area was backed by various funders including the Arcus Foundation, which is a major funder of an influence campaign to restrict religious freedoms in areas that run counter to the foundation's vision of LGBT advocacy and reproductive health.