August 12, 2019 | Modern Healthcare 21
find a partner, and they’re not alone. Hospital leaders
across the country are facing these types of quanda-
ries as Catholic and non-Catholic healthcare systems
increasingly consider merging or partnering to gain
scale and survive in the rapidly consolidating health-
care market.
At Community Hospital, leaders next opted to join
with Centura’s Adventist arm, which imposes less-re-
strictive religious rules on
healthcare services than
CHI does. Then, however,
board members learned that
Adventist rules required re-
placing Thomas with a CEO
who is a member of the Sev-
enth-day Adventist Church,
which they didn’t want to do.
Due to these worries over
religious directives, Com-
munity’s leaders broke off
negotiations with Centura in
March, deciding to remain
independent. Centura de-
clined to comment.
“There was quite a bit of
concern about how having
a religious affiliation would
dictate healthcare,” said
Thomas, who dealt with Catholic care restrictions while
previously working as an administrator at CHI and Ave-
ra hospitals. “Our decision to stay independent was ex-
tremely well-received by the community.”
Two months later, UCSF Health similarly ended
long-running negotiations to expand its partnership
with Catholic-affiliated Dignity Health. UCSF leaders
cited widespread protests from physicians, students,
staff and community members that Dignity’s Catholic
rules would limit services to women, LGBTQ patients,
and those seeking physician aid in dying, which is al-
lowed in California.
Nevertheless, some are pushing ahead with deals
between Catholic and secular hospitals and between
Catholic and other faith-based hospitals.
“We want to bring population health to the entire
region, and we’ll do that more effectively working to-
gether than doing it on our own,” said Kevin Klock-
enga, regional CEO for St. Joseph Health system in
Northern California, which has signed an affiliation
deal with Adventist Health.
That’s despite revisions in the ERDs approved last
year by the U.S. Conference of Catholic Bishops im-
posing tighter scrutiny over deals with non-Catholic
providers. Those revisions were intended to ensure
Catholic healthcare organizations aren’t collaborating
in what the church considers “intrinsically immoral”
actions such as contraception, abortion, assisted sui-
cide and sterilization.
Restriction-driven innovation
Yet deal architects are finding innovative ways to
structure the partnerships that slip through the obsta-
cles erected by the bishops and opponents of religious
restrictions on healthcare.
In April, Adventist and St. Joseph reached an agree-
ment to combine nine hospitals in six largely rural
Northern California counties. The proposed joint op-
erating company would allow
Adventist and St. Joseph to re-
tain their own religious iden-
tity and rules at each of their
hospitals.
Advocacy groups are chal-
lenging the partnership on the
grounds that it could expand
religious restrictions on care.
A decision by the California
attorney general’s office on
whether to approve the deal is
due by Sept. 30.
In January, Dartmouth-
Hitchcock Health signed an
agreement to combine with
Catholic-led GraniteOne
Health in New Hampshire.
The deal would keep Dart-
mouth-Hitchcock facilities
free from Catholic rules while requiring their physi-
cians to follow those rules when practicing at Gran-
iteOne’s Catholic Medical Center facilities. The two
systems hope to finalize the agreement in September
and win regulatory and diocese approval by next year.
Previously, a proposed merger between Dart-
mouth-Hitchcock and Catholic Medical Center was
blocked in 2009 due to concerns over whether secular or
religious rules would prevail.
In March, Women’s and Children’s Hospital in La-
fayette, La., merged with Our Lady of Lourdes Regional
Medical Center, and started operating under the Cath-
olic ERDs.Fine line
System leaders exploring such partnerships often face
daunting challenges.
On one side, physicians, nurses and advocacy groups
are pushing to protect patient and provider choice as
Catholic health systems become the dominant or sole
providers in many markets.
They fear a growing number of patients have no con-
venient alternative to a Catholic provider, since nearly
1 in 6 U.S. hospital beds now are in Catholic facilities,
according to the Catholic Health Association. Catholic
hospitals are designated as sole community providers
in 46 markets, according to Merger Watch, which tracks
Catholic healthcare deals. And Catholic providers make
up a large part of health plan networks in a number of“We want to bring
population health
to the entire region,
and we’ll do that more
effectively working
together than doing it on
our own.”Kevin Klockenga, Regional CEO,
St. Joseph Health system