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

08 December 2017

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 would include 139 hospitals across 28 states and a combined revenue of almost 29 billion dollars with more than 159 thousand employees.

We reached out to local hospital representatives to learn what effect, if any, the merger will have on the local hospitals and their employees.

Dignity CEO Lloyd Dean and CHI's CEO Kevin Lofton will lead the new organization together as CEOs, each with specific responsibilities and decision-making authority.

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"We are joining together to create a new Catholic health system ... that is positioned to accelerate the change from sick-care to well-care across the United States", said Kevin E. Lofton, chief executive officer of CHI, in a press release. Lofton will oversee mission, advocacy, sponsorship and governance, system partnerships and IT. Dean will have authority for all of operations, including clinical, financial and human resources. Individual facilities will continue to operate under their existing names, at least for the foreseeable future. The goal is to increase their investments in digital technologies like tele-medicine programs, stroke robots, Google Glass and expand access to outpatient and virtual care settings.

Currently, CHI is based out of the Denver area, while Dignity is based out of San Francisco, Reyman said he believes the merger will likely affect those people first.

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.

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

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