This file photo shows CHI Memorial Hospital in Chattanooga. The hospital's owner is in merger talks with Dignity Health to create a $28 billion conglomerate.Catholic Health Initiatives, which owns CHI Memorial Hospital in Chattanooga, is in merger talks with Dignity Health to create one of the nation's largest nonprofit hospital systems, The Wall Street Journal said tonight.
A merger deal would combine 103 hospitals owned by Catholic Health Initiatives, based in Englewood, Colo., with 39 hospitals operated by San Francisco-based Dignity Health. Together, the two Catholic hospital chains would have nearly $28 billion in annual revenues.
"The potential to align the strengths of these two organizations will allow us to play a far more significant role in transforming health care in this country," Catholic Health Initiatives Chief Executive Officer Kevin Lofton said in a statement.
Last month, CHI and Dignity announced a joint partnership, Precision Medicine Alliance, to help provide diagnosis and treatments at their respective hospitals using genetic and molecular profiles, with an initial focus in tumor profiling for patients with cancer.
"Discussions between the two systems led our board of stewardship trustees to agree to explore an alignment of our organizations," Lofton said in a letter to CHI employees today.
For the last fiscal year, which ended June 30, 2015, Catholic Health Initiatives earned $3.1 million in operating income on revenue of $15.2 billion, the Journal reported. In the previous year, CHI reported an operating loss of $109.4 million on revenue of $13.6 billion. Since April, all three major ratings firms have downgraded CHI.