Trinity Health, Catholic Health East Announce Plans To Merge

Big news today in the land of hospital mergers and acquisitions.

The boards of two leading Catholic health systems, Trinity Health and Catholic Health East, have announced plans to join forces in 2013.

The consolidated Catholic health system would include 82 hospitals and 89 continuing care facilities, home health and hospice programs. The two health systems together have nearly 2.8 million visits each year across 21 states. They employ more than 87,000 employees, including 4,100 doctors.

The merger is aimed, in part, at preparing for a new system of care that is moving away from fee-for-service medicine and toward a focus on population-based health, where providers are offered financial incentives to keep patients healthy and lower costs through better-coordinated care.

“By bringing Catholic Health East and Trinity Health together, we will enhance our ability to create innovative models of care and advance clinical quality across the continuum,” said Judith Persichilli, president and CEO, Catholic Health East in a press release.

Hospital systems across the country are facing growing financial pressure to consolidate or expand by merging with or acquiring other providers. But expanding Catholic health systems has proved difficult in other parts of the county.  Several proposed mergers between Catholic and secular hospitals, for example, have collapsed in part because of concerns about the Catholic Church’s opposition to abortions, in-vitro fertilizations and sterilizations.

In January, Catholic Healthcare West, which primarily operates in California, Arizona and Nevada, decided to end its governing board’s affiliation with the Catholic Church and changed its name to Dignity Health to make it easier to merge with secular hospitals.  

Today’s announcement represents another option: Maintain the religious character of the system by merging with another Catholic system.

“A unified ministry allows us to better leverage our talents and size, and to use our resources more effectively in furtherance of our mission,” said Dennis Fitzpatrick, chairperson of Catholic Health East’s board of directors. “Together, we will have a greater ability to influence and transform health care at the national level.”

The two systems will pursue the merger over the next few months with the goal of reaching a definitive agreement by next spring. If the merger is completed, the combined system would have annual operating revenues of about $13.3 billion and assets of about $19.3 billion.