catholic-health-initiatives-logoThe parent company of KentuckyOne Health is in merger talks with another giant health care system.

According to a letter by Catholic Health Initiatives CEO Kevin E. Lofton, CHI and Dignity Health have signed a letter of intent “to explore aligning our health ministries.”

CHI is the parent company of KentuckyOne Health, which includes Jewish and University hospitals in Louisville.

The merger would combine two huge nonprofit health systems: Dignity, based in San Francisco, operates 400 care centers, including hospitals, in 22 states and employs 62,000, including more than 9,000 physicians. CHI operates 102 hospitals in 19 states and employs 95,000, including nearly 4,000 physicians. Combined, the two systems generate annual operating revenue of $27.5 billion.

Kevin E. Lofton
Kevin E. Lofton

CHI and KentuckyOne could not be immediately reached for comment.

Lofton said in his letter that he believes CHI’s merger with Dignity “would allow us to play an even greater role in shaping the transformation of health care for the future, including expanding access to health care services and improving coordination of care and clinical excellence.”

“As the health care industry changes dramatically and rapidly,” he added, “all providers are adapting to an environment where care is compensated on value rather than volume.”

Dignity Health President and CEO Lloyd H. Dean said in a press release, “Health care is at a turning point in our nation.”

Some observers have told IL that the nation is seeing what amounts to an arms race between health care providers and health insurers.

Insurer Aetna wants to buy Louisville-based rival Humana, while Anthem is in talks to acquire Cigna. Antitrust regulators have filed suit to block both deals. As insurers get bigger, they’re putting more pressure on health care providers to do the same to be able to better negotiate favorable reimbursement deals.

dignity-health-logoLofton emphasized that the parties are in the “preliminary phase” of the exploration, and that the boards and executive leaders would evaluate the potential merger in the next few months.

He also said that those months would be filled with uncertainty, as the parties do not yet know how the merger “would affect our organization structure or individual roles.”

“We all have any questions about a possible alignment for which we do not have answers at this time,” he said.

Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.


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