CHI Health parent to merge with San Francisco company

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Catholic Health Initiatives and Dignity Health announced Thursday that they will merge to create the largest nonprofit health care system in the nation, operating facilities in 28 states.

The combined health system will include more than 700 sites and 139 hospitals across 28 states. The new health system will be headquartered in Chicago, operate under a new name and have an annual revenue of.

The combined organization will have 139 hospitals and almost 160,000 employees, including more than 25,000 doctors. Local facilities will continue operating under their current names.

Nationally, CHI CEO Kevin Lofton and Dignity CEO Lloyd Dean will serve as co-CEOs, each with specific and independent responsibilities and decision-making authority.

"It's our pleasure to share with you that Catholic Health initiatives and Dignity Health have signed a definitive agreement to combine our ministries and build a new Catholic health system", CHI CEO Kevin Lofton said in a video posted to Facebook. Lofton will have authority for mission, advocacy, sponsorship and governance, system partnerships and information technology, while Dean will have authority for all of operations, including clinical, financial and human resources. Although there is no immediate impact on the credit ratings of either health system, it is likely Dignity Health will be downgraded if the deal closes, according to S&P Global Ratings.

Dignity Health and CHI are no strangers to each other and have partnered on other initiatives.

The proposed merger is the most recent example of consolidation in the health care sector, which has been on the rise for several years - prompting worry that less competition means higher prices and fewer choices for consumers. A precision oncology program is being implemented in three service areas, and four-to-six more service area launches are planned across the country in the next 12 months.