November 1, 2012

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 improv-ing the way the Trinity and CHE systems use their resources to serve their communi-ties. 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, includ-ing when it comes to advocacy on behalf of the poor and vulnerable.

Said Swedish: “We believe with ex- panded 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 consoli-dation of equals — no funds will be trans-ferred in the transaction. The new system will be structured so that other systems andfacilities can join the organization in the future.

Both Trinity and CHE currently operate some of their facilities under joint operat-ing agreements. Swedish and Persichilli said the consolidation will not disrupt those arrangements.

Plans call for Swedish to serve as presi-dent and chief executive of the new orga-nization; 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 appoint-ments 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 mis-sions, 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 spon-sored either by one of eight congregations of women religious or by a public juridic per-son called Hope Ministries.

The move to single public juridic per-son sponsorship for the new organization will require Vatican approval. Sr. DeClercq

Trinity Health and Catholic Health East in talks to consolidate

Reprinted from Catholic Health Word, Nov. 1, 2012Copyright © 2012 by The Catholic Health Association of the United States

Trinity Health10 states; operating revenue $9 billion

20 ministry organizations:• 47 hospitals•  32 total long-term care, independent and assisted living and affordable housing communities

•  Home health and hospice programs 750,000 total visits

Community benefit: $616 million

Catholic Health East11 states; operating revenue, $4.3 billion*

21 regional health corporations:• 35 hospitals•  57 total long-term care, independent and assisted living and affordable housing communities

•  Home health and hospice programs nearly 2 million visits

Community benefit: $322 million

*Excludes revenues from 12 hospitals in joint operating agreements.

2 CATHOLIC HEALTH WORLD November 1, 2012 

expects the transition to be complete by spring when the consolidation is final-ized. Persichilli said the new organiza-tion 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 Trin-ity arrangement of having a single spon-sor, this is happening — the founding con-gregations 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 con-gregational 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 chal-lenges 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 con-solidated 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 cli-nicians consulted with Trinity clinicians on how to identify sepsis cases early and treat them effectively. Trinity shared a sepsis pro-tocol it developed as part of a broader clini-cal quality and safety initiative.

jminda@chausa.org

Swedish

Persichilli