Parent firm of KentuckyOne Health gets conditional approval from Catholic Church to merge with San Francisco’s Dignity Health

The parent firm of most Catholic-owned hospitals in Kentucky, Catholic Health Initiatives, has received conditional approval from church officials to merge with Dignity Health, a not-for-profit chain based in San Francisco.

The deal “would create the nation’s largest not-for-profit hospital company by revenue,” Harris Meyer and Tara Bannow report for Modern Healthcare. CHI’s Kentucky facilities, operating under the name KentuckyOne Health, include Louisville’s Jewish Hospital and its affiliatesSt. Joseph Hospital in Lexington, London, Martin, Mount Sterling and Nicholasville; Flaget Memorial Hospital in Bardstown, Our Lady of Peace in Louisville; and Sts. Mary and Elizabeth Hospital in Louisville.

After the church’s Congregation for the Doctrine of Faith deferred to local bishops, Denver Archbishop Samuel Aquila told CHI “that as long as his five moral conditions for the deal continue to be met, he had no moral objections to the merger going forward,” as long as the merged chain had a recognizably Catholic name and other relatively minor conditions, Modern Healthcare reports.

“While the archbishops of Denver and San Francisco, where CHI and Dignity, respectively, are headquartered, previously had signed off on the so-called ministry alignment agreement, their approval was dependent on Vatican approval, which was uncertain,” Meyer and Bannow report. “That left a cloud over the plan, initially announced in 2016, to create a combined system with 139 hospitals in 28 states with total annual revenue of nearly $30 billion.”

The National Catholic Bioethics Center had given the merger “an unfavorable moral analysis . . . which added to the uncertainty about the Vatican’s decision. CHI and Dignity then sought additional moral analyses from three other ethicists, who gave favorable opinions,” the reporters write. “The merger still needs approval from state regulators in California, Arizona and Colorado, CHI’s chief financial officer, Dean Swindle, said on an Oct. 11 call with investors.”

California Attorney General Xavier Becerra is facing pressure “to ensure that the deal does not limit reproductive health services, care for LGBTQ patients, or services for low-income and under-served communities,” Meyer and Barrow report. “Fifteen of Dignity’s 39 hospitals are historically non-Catholic and provide services that are prohibited under Catholic doctrine, forcing the dealmakers to craft a merger model that worked around the directives.” It would allow Dignity’s non-Catholic hospitals to keep doing services the church considers immoral, such as tubal ligations after deliveries.

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