California Department of Justice Conditionally Approves Affiliation of Dignity Health and Catholic Healthcare Initiatives with Strong Community and Patient Protections

SACRAMENTO November 21, 2018 – The California Department of Justice (CA DOJ) today approved the Ministry Alignment Agreement between Dignity Health and Colorado-based Catholic Healthcare Initiatives to join the two systems in California. The review of this transaction included 17 public meetings across the state and over 500 written comments from the public including: various community-based organizations, business associations, governmental entities, locally-elected officials, and religious entities. Taking into consideration all the public comments, health and financial impacts, CA DOJ set a number of strong conditions to protect the people of California. The conditions reflect the largest commitment by a system to serving Medi-Cal beneficiaries and charity care in State history.

“The California Department of Justice is committed to improving the well-being and health of families across the state by increasing accessibility and availability of care in our communities,” said Sean McCluskie, Chief Deputy to the Attorney General. “Our office carefully reviewed this transaction to protect patients and our communities here in California, and our office will monitor compliance with the conditions.

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The Ministry Alignment Agreement will create a new organization, CommonSpirit Health, that will operate nearly 140 hospitals in 16 states, including 30 hospitals in California. The conditions imposed by CA DOJ will preserve the accessibility and availability of healthcare services to the communities who have been served by Dignity Health hospitals. These conditions require CommonSpirit Health to maintain emergency services and women’s healthcare services for ten years. Additionally, during years 6-10, if CommonSpirit Health wants to change these services, it is required to provide notice to CA DOJ to determine the impact to the community.

The conditions also require Dignity Health, Catholic Healthcare Initiatives, and CommonSpirit Health to create a Homeless Health Initiative in California to support the delivery of treatment and services to hospitalized individuals experiencing homelessness. This initiative will provide coordinated care in the 30 communities where Dignity Health has hospitals across California. Specifically, it requires:

  • The allocation of $20 million over six fiscal years toward working with and contributing to local counties, cities, and community-based organizations in the implementation of the Homeless Health Initiative to co-locate, coordinate, and integrate health, behavioral health, safety, and wellness services with housing and other social services; and
  • At least $10 million be expended in the first three fiscal years.

In addition, the conditions include stronger protections for individuals in need of financial help who are facing higher healthcare costs. Starting in 2019, all of Dignity Health’s California hospitals will offer a 100 percent discount to patients up to 250 percent of the federal poverty limit through its financial assistance policy. In addition, Dignity Health will require all of its California hospitals to:

  • Post financial assistance policy on its website and in prominent locations patients frequent such as the emergency room, admissions area, and waiting rooms;
  • Engage with affiliated organizations, community clinics, healthcare providers, houses of worship, and other community-based organizations on the availability of financial assistance at each California Hospital; and
  • Train staff that interact with patients and their families concerning payment of services and Dignity’s Financial Assistance Policy, including charity care.

The California Department of Justice is responsible for the general supervision of all charitable organizations in the state. The CA DOJ will closely monitor compliance with the conditions.