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