Strat­egy said to give CHW more lat­i­tude in build­ing a na­tional health­care sys­tem

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Catholic Health­care West shed more than words when the 38hos­pi­tal sys­tem changed its name to Dig­nity Health. It dropped its for­mal con­nec­tion to the Ro­man Catholic Church. San Fran­cisco-based CHW en­vi­sioned a sys­tem with hos­pi­tals coast to coast, be­yond its three-state re­gion of Ari­zona, Cal­i­for­nia and Ne­vada. To re­al­ize that vi­sion, the sys­tem on Jan. 23 in­tro­duced the new name and the re­struc­tur­ing of its gov­er­nance to sep­a­rate from the church. Of­fi­cials cited en­hanced op­por­tu­ni­ties to ex­pand, say­ing sep­a­rat­ing from the church would make the sys­tem more at­trac­tive to ex­ec­u­tives from sec­u­lar or non-catholic hos­pi­tals that are look­ing for an in­vestor.

“What this does is two things: it re­moves the words ‘Catholic’ and ‘West’ from its name; I think the in­ten­tion is for broad­en­ing the pool of af­fil­i­a­tions,” said Brad Spiel­man, a vice pres­i­dent and se­nior an­a­lyst for Moody’s In­vestors Ser­vice.

The for­mer CHW counts it­self as the fifth­largest Catholic sys­tem in the coun­try based on rev­enue, and whether other sys­tems fol­low suit in an ef­fort to grow re­mains to be seen. Still, CHW’S con­ver­sion poses the lat­est ex­am­ple of a faith-based sys­tem tak­ing dras­tic ac­tions to po­si­tion it­self for im­pend­ing health­care re­form and the busi­ness de­mands of the fu­ture.

Most ob­servers aren’t sur­prised, but also won­der if the sys­tem’s mis­sion and val­ues have evolved to the point where they were forced to sep­a­rate. “They view it as re­mov­ing the ball and chain from them­selves,” said Paul Danello, a Washington-based lawyer fo­cused on Catholic canon law.

As a grow­ing num­ber of laypeo­ple con­tinue to be in­volved in lead­er­ship, some ques­tion whether the Catholic way will re­main a fea­si­ble way of do­ing busi­ness.

Lawrence Singer, di­rec­tor of the Bea­z­ley In­sti­tute for Health Law and Pol­icy at Loy­ola Univer­sity, a Je­suit school in Chicago, and his col­leagues en­vi­sion a time when com­pli­ance with eth­i­cal and re­li­gious di­rec­tives could ham­string Catholic hos­pi­tals at­tempt­ing to con­duct busi­ness in the mod­ern age. “Are we get­ting to a point where ei­ther gov­ern­ment pol­icy in the Af­ford­able Care Act or com­mu­nity de­mand for cer­tain ser­vices is such that Catholic health­care providers won’t ef­fec­tively be able to com­pete or serve their mar­ket any longer?” Singer said.

Look­ing to ex­pand east­ward

Dig­nity Health Pres­i­dent and CEO Lloyd Dean de­clined to dis­cuss any pend­ing deals that may have served as mo­ti­va­tion for the re­struc­tur­ing, but did say the sys­tem is look­ing to ex­pand east. He also said there’s no “one-size-fits-all” rem­edy for all Catholic sys­tems. But this one, he said, gives Dig­nity Health the flex­i­bil­ity to ally with a larger num­ber of or­ga­ni­za­tions.

“What I can tell you is, this is the right model for us and it al­lows us to part­ner with oth­ers whose val­ues who are in sync with our mis­sion, vi­sion and or­ga­ni­za­tion,” Dean said.

Dig­nity Health now has 23 Catholic and 15 non-catholic hos­pi­tals.

Dig­nity Health of­fi­cials planted the seeds for a name change in 2010, when CHW re­leased its vi­sion state­ment for the next decade. Be­sides mak­ing bold goals of ex­pand­ing, the sys­tem listed “dig­nity” as the first of five core val­ues and de­scribed as­pi­ra­tions of de­vel­op­ing a “vi­brant na­tional health­care sys­tem” by the end of 2020.

“We will grow our heal­ing min­istry by ex­pand­ing ac­cess and mar­ket share within ex­ist­ing ser­vice ar­eas, en­ter­ing new ser­vice

Dig­nity Health is pro­mot­ing the changes with an ad­ver­tis­ing cam­paign, left. Of­fi­cials are tout­ing the re­struc­tur­ing as a way to more ef­fi­ciently grow the sys­tem, which now has 38 hos­pi­tals in Ari­zona, Cal­i­for­nia and Ne­vada.

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