Dignity hospitals might have closer ties to Catholic church after CHI merger

A planned merger between health care giants Dignity Health and Catholic Health Initiatives could bring back a stronger association between the Roman Catholic Church and several regional hospitals, according to a recent report from the state attorney general’s office. 

The merger agreement announced last December between San Francisco-based Dignity and Englewood, Colorado-based Catholic Health has the potential to create the largest nonprofit health system in the U.S. Combined, the two health systems would control 131 hospitals and have $28 billion in annual revenue.

The combination depends, in part, on a Catholic ministry alignment that would bring Dignity Health back into the fold as an official Catholic-sponsored health system for the first time since 2012.

Dignity Health's overarching system hasn't been officially designated as Catholic since 2012, following a 2009 update to the Ethical and Religious Directives that Catholic hospitals are required to follow to attain official church sponsorship. That change also saw the hospital system, then known as Catholic Healthcare West, change its name to Dignity Health. 

Dignity Health and Catholic Health Initiatives began talk of a merger as early as 2012 to help bring Dignity Health hospitals back into official Catholic sponsorship, according the attorney general’s report.

Under the ministry alignment agreement, 12 of Dignity's historically non-Catholic hospitals would be spun off into a separate legal entity called the Integrated Health Organization. The remaining 19 Catholic hospitals would join the main organization created in the merger.

In the Sacramento region, this would effectively split up the six Dignity Health hospitals into two different groups.

Historically non-Catholic Woodland Memorial Hospital, Methodist Hospital of Sacramento and Sierra Nevada Memorial Hospital in Grass Valley would be placed in Integrated Health Organization.

Integrated Health would have its own board of directors, whose members would be approved by the merged Dignity/Catholic Health system. Integrated Health would also donate its net profits to charities for activities and services that are “not inconsistent” with church ethical doctrines, according to the ministry alignment agreement.

The three Catholic hospitals in the area — Mercy General Hospital in East Sacramento, Mercy Hospital of Folsom and Mercy San Juan Medical Center in Carmichael — would fall under the merged system.

These hospitals would “remain a ministry of the Catholic Church and subject to the Ethical and Religious Directives,” according to the ministry alignment agreement.

The renewed directives include bans on services such as artificial insemination, gender transition care, contraception devices and abortion. 

“Under the status quo, we know patients are being turned away for services they need,” said Ruth Dawson, staff attorney with the American Civil Liberties Union of Southern California, in an interview with the Business Journal. 

The ACLU is concerned that the merger will lead to more patients being denied services, she said.

The ACLU has already tangled with Dignity Health in recent years, filing a lawsuit last year on behalf of a transgender man who was denied a hysterectomy at Mercy San Juan Medical Center and another in 2015 on behalf of a woman who was denied tubal ligation surgery at Mercy Medical Hospital in Redding.

Dignity Health said in a press statement that “there will be no changes or reductions in services as a result of our alignment.”

“Any changes (as a result of the merger) will be largely invisible to our patients and patients will continue to be able to access our entire provider network in the region,” Dignity said.

The ministry agreement also includes several provisions to ensure that there are no changes in service to patients and a commitment not to discriminate against LGBT patients.

The California attorney general's approval of the merger might hinge on the agreement including non-discrimination commitments and well as access to services.