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Few immediate ripples seen from merger of Catholic health systems

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Part of its name may change but CHI St. Joseph Children's Health in Lancaster County plans to continue its mission after its nonprofit parent merges with another Catholic health system.

At the end of last week Colorado-based Catholic Health Initiatives announced it had signed a merger agreement with San Francisco-based Dignity Health. The combined Catholic-based health system will include 139 hospitals and 159,000 employees, including more than 25,000 physicians, in 28 states.

The new system plans to adopt a new name in 2018, as well as move its headquarters to Chicago, according to a press release from CHI and Dignity.

But otherwise Philip Goropoulos, president of CHI St. Joseph Children’s Health, expects little impact locally as a result of the merger.

Philip Goropoulos
Philip Goropoulos - ()

"It isn’t one organization buying the other. It is truly both ministries coming together," said Goropoulos, who joined CHI St. Joseph in 2014 and has overseen recent growth at the organization.

Over the last two years CHI St. Joseph has opened two new offices: a dental clinic in Columbia and a combined dental and behavioral health clinic in East Lampeter Township. Its annual budget has grown from under $2 million to more than $4.5 million, while its staff has risen from 13 people to 36, Goropoulus said.

He noted that the merger announcement mentioned a commitment to addressing social determinants of health, that is, the educational, environmental and other factors that affect a person’s health.

"It’s looking at a holistic approach to health care," said Goropoulus, noting it is an approach taken by CHI St. Joseph. "We’re looking at not just providing a clinical service but also other social services."

He expected the CHI part of the organization's name to change once the combined health system picks its new name.

About the merger

The deal between CHI and Dignity is expected to be finalized in the second half of 2018, subject to federal, state and church approvals. It is one of several recent mergers reshaping health care.

The two systems said the merger will help them speed up the transition to a wellness-based model of care, one that aims to keep people healthy instead of simply curing or mitigating disease after it strikes.

"Our new organization will have the talent, depth, breadth, and passion to improve the health of every person and community we serve," CHI’s CEO, Kevin E. Lofton, said in a statement.

Lofton will share leadership of the new organization with Dignity CEO Lloyd Dean. Lofton will focus on mission, advocacy, governance, system partnerships and information technology, while Dean will oversee operations, including clinical, financial and human resources.

"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," Dean said in a statement.

CHI and Dignity previously have collaborated on an alliance to advance precision medicine, an approach to treatment and prevention that takes into account individual genetic variations.

Dignity, meanwhile, is combining its urgent-care operations with Select Medical Holdings Corp., based in Lower Allen Township, Cumberland County.

Based in Englewood, Colo., CHI was founded in 1996 and operates hospitals and other health care facilities in 17 states. It had revenue of $15.5 billion in fiscal 2017 and provided more than $2.1 billion in charity care, according to a press release.

Dignity formed in 1986 when two congregations of the Sisters of Mercy brought together their 10 hospitals to create Catholic Healthcare West. The organization now operates more than 400 health care facilities in 22 states. It had revenue of $12.9 billion in fiscal 2017 and provided $2.6 billion in charity care

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Joel Berg

Joel Berg

Joel Berg is editor of the Central Penn Business Journal. Born in Philadelphia, raised in Northern Virginia and now living in York, he's a graduate of Franklin & Marshall College and the University of Maryland. Have a question or story idea? Email him at jberg@cpbj.com. Follow him on Twitter, @JoelBYorkPa.

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