By JULIE MINDA
Trinity Health and Catholic Health East are pursuing a consolidation that would create a new organization with annual revenues of about $13.3 billion and assets of about $19.3 billion. The systems have signed a nonbinding letter of intent and expect to reach a definitive agreement in the spring.
Joseph Swedish, president and chief executive of Novi, Mich.-based Trinity, said the consolidation would help to strengthen Catholic health care in the U.S. by improving the way the Trinity and CHE systems use their resources to serve their communities. Judith Persichilli, president and chief executive of Newtown Square, Pa.-based CHE, added that the move would enable the systems to achieve a scale that will give them greater influence nationally, including when it comes to advocacy on behalf of the poor and vulnerable.
Said Swedish: "We believe with expanded scale we can successfully advance the mission of Catholic health care and the core values of the ministry, and we believe that together we can do more than we can do apart."
CHE spokesman Scott Share said the combined entity likely will be the second largest Catholic health system in the U.S. — based on revenues — after St. Louis-based Ascension Health.
Trinity and CHE administrators said the systems are treating the deal as a consolidation of equals — no funds will be transferred in the transaction. The new system will be structured so that other systems and facilities can join the organization in the future.
Both Trinity and CHE currently operate some of their facilities under joint operating agreements. Swedish and Persichilli said the consolidation will not disrupt those arrangements.
Plans call for Swedish to serve as president and chief executive of the new organization; and Persichilli, as executive vice president. According to a joint press release, until the new organization is created, both executives will lead its formation while retaining their current titles, roles and responsibilities. Share said it is too early in the process to have any information about other potential leadership appointments or the location of the new system's headquarters.
Under the consolidation, Trinity's and CHE's subsystems and facilities will retain their Catholic identity and heritage, said Swedish and Persichilli. Swedish said the systems are well-aligned with one another, particularly when it comes to their missions, visions and values.
According to Sr. Catherine DeClercq, OP, senior vice president of governance and sponsorship for Trinity, the newly created organization will be sponsored by a single public juridic person. Currently, Trinity has a public juridic person called Catholic Health Ministries whose board members serve in dual governance and sponsorship roles for the system and its facilities. At CHE, each local subsystem or facility is sponsored either by one of eight congregations of women religious or by a public juridic person called Hope Ministries.
The move to single public juridic person sponsorship for the new organization will require Vatican approval. Sr. DeClercq expects the transition to be complete by spring when the consolidation is finalized. Persichilli said the new organization will help to ensure each of Trinity's and CHE's founding sponsors retain an influence when the new entity is formed. Sr. DeClercq said under the current Trinity arrangement of having a single sponsor, this is happening — the founding congregations each appoint a representative to provide counsel to the public juridic person, and they exercise delineated rights that are outlined in Catholic Health Ministries' bylaws.
Swedish said he has been pleased to witness the congregational representatives of both systems assessing what their ministries have achieved so far, recognizing that success and then enthusiastically saying, "Let's go forward and create new opportunities to enhance Catholic health care, even beyond our original vision."
Swedish and Persichilli said they began considering a consolidation last year, as they were discussing challenges of operating under health care reform. They talked at the time about how the environment could make it difficult to sustain Catholic health care. As talks progressed, they said, they recognized that as a consolidated organization, their systems could operate more efficiently in a rapidly changing health care landscape that will be focused on population health and the delivery of coordinated and integrated care.
They said that while their systems do not overlap geographically, as a combined entity the systems still will be able to achieve improvements of scale. For instance, the systems' clinicians and staff will be able to share best practices in implementing evidence-based clinical practices across their facilities. This type of collaboration is already occurring, Persichilli said. CHE clinicians consulted with Trinity clinicians on how to identify sepsis cases early and treat them effectively. Trinity shared a sepsis protocol it developed as part of a broader clinical quality and safety initiative.
Copyright © 2012 by the Catholic Health Association of the United States
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