Nonprofit, faith-based system plans national expansion
By JUDITH VANDEWATER
Catholic Healthcare West has reorganized its governance structure and changed its name to Dignity Health. Under the new governance model the San Francisco-based operating company is no longer an official ministry of the Catholic Church. The company, which operates 40 hospitals in three states, also announced its intent to build a national health care system rooted in the Catholic tradition with both Catholic and other-than-Catholic components and partnerships.
Its clinical operations in California, Arizona and Nevada are not impacted by the reorganization. Its financial structure and tax-exempt status also are unchanged. Lloyd H. Dean remains the organization's president and chief executive, with his veteran leadership team intact.
Dean, who is a member of Dignity Health's board of directors, said the reorganization and renaming more accurately reflect the diversity of the company's legacy portfolio of 25 Catholic and 15 other-than-Catholic hospitals, and its growth plans. The not-for-profit operating company continues to define itself as a ministry, and Dean said it also remains committed to providing high-quality, affordable health care and advocating for the poor and disenfranchised.
In announcing the historic change to its 55,000 employees and 10,000 physicians on Jan. 23, the system's leaders emphasized that Dignity Health will continue to operate its Catholic hospitals as church ministries, which are sponsored directly by their founding congregations. Going forward, any Catholic hospitals acquired by Dignity Health will remain Catholic and retain their respective congregational sponsorship. All Dignity Health's Catholic hospitals will follow the Ethical and Religious Directives for Catholic Health Care Services. Dignity Health executives said their intent is for the system to retain its membership in CHA.
Dignity Health's other-than-Catholic hospitals will continue to abide by a "Statement of Common Values" signed when they joined Catholic Healthcare West. Dean said that newly acquired non-Catholic hospitals will do the same.
The reorganization did not require Vatican approval. Dean said that he and other senior leaders consulted with Archbishop George H. Niederauer, head of the Archdiocese of San Francisco, about the proposed change, and the archbishop in turn sought input from bishops in dioceses with Catholic Healthcare West facilities.
Archbishop Niederauer determined that the governance change was consistent with Catholic moral and doctrinal teaching and could proceed, Dean said.
CHA President and Chief Executive Officer Sr. Carol Keehan, DC, said, "The sponsors and the board and senior management of Catholic Healthcare West have a great legacy in Catholic health care, and they have worked closely with the bishops involved to arrive at this structure in order to continue the ministry in a very vibrant way."
Parallel tracks
Dean said that the reorganization process began about two and half years ago, with the board refining its vision for growth in the context of ongoing challenges, changes and opportunities in the U.S. health care system. The 18-member Catholic Healthcare West board included representatives from each of the system's sponsoring congregations.
Sr. Judy Carle, RSM, is vice chair of Dignity Health. She said that about two years ago the sponsors began discernment around how best to perpetuate and advance the ministry and mission of Catholic Healthcare West in light of the declining numbers of women religious in the sponsoring congregations. The sisters wanted their health ministry to maintain a culture that was inclusive of other-than-Catholic hospitals and services, Sr. Carle said. Leadership teams from the sponsoring congregations were brought into the discussions early on and signed off on the final structure, which she called "an appropriate and vital step for the future of health care."
Governance model
Sr. Carle said the new governance model changes the sponsors' relationship with the health ministry. Under the old model, which had been in place since Catholic Healthcare West's founding in 1986 as a 10-hospital system, a sponsors-only body called the Corporate Members headed the organization. Sr. Carle chaired that body most recently. As Catholic Healthcare West grew through mergers, each sponsoring community had a representative member on that body. The Corporate Members had authority over Catholic and other-than-Catholic hospitals and were responsible for the system's Catholic identity. The six members of the group also had fiduciary responsibility for the health system by virtue of their seats on Catholic Healthcare West's board of directors. That directors' board was under the Corporate Members on the organizational chart.
Under the new governance structure approved by the Catholic Healthcare West board Oct. 13 and implemented Jan. 17, the Dignity Health board of directors is the top level of governance. It continues to hold fiduciary responsibility over the system, which in addition to its hospitals, operates 115 ancillary care sites and has annual revenues of $10.6 billion and $13 billion in assets.
The Dignity Health board is chaired by Caretha Coleman, an organizational development consultant who is a principal in Coleman Consulting in Los Altos Hills, Calif. She was a member of the Catholic Healthcare West board. Sr. Carle is one of two women religious to hold Dignity Health board seats. The nine-member board is adding two new members in the near future, and could expand to a maximum of 13 members.
A member from each of the sponsoring congregations sits on Dignity Health's sponsorship council. That body will oversee matters of Catholic identity. Unlike the prior Corporate Member body at Catholic Healthcare West, it will not have direct authority over other-than-Catholic hospitals and businesses in the Dignity Health portfolio. The sponsorship council will appoint members to a mission integrity committee of the operating board. Sr. Carle is the inaugural chair of that board committee, which she said is responsible for ministry leadership formation and ensuring the vibrancy of the entire organization's mission across both Catholic and other-than-Catholic entities. "We will hold people accountable," Sr. Carle said.
The organization continues its commitment to formal leadership formation training through the Ministry Leadership Center in Sacramento, Calif., a program jointly supported by six ministry systems, said Bernita McTernan. She is Dignity Health's executive vice president of sponsorship, mission integrity and philanthropy, a role she filled at Catholic Healthcare West.
Dignity Health also will continue to promote a unified culture among all its facilities, McTernan said. "We don't in any way have a distinction in terms of culture, mission, vision or values" between Catholic and other-than-Catholic facilities, she said, "the expectation from leadership and employees, all of the policies remain the same" as they were at Catholic Healthcare West.
Clarity of purpose
Dean said the new governance structure positions Dignity Health well to pursue its goal of growing in its existing markets while building a diversified national health system. He said the restructuring and growth plans have fanned a great deal of excitement and enthusiasm among the system's senior leaders. "People appreciate the clarity on who we are," he said.
In addition to hospitals, the growth model calls for Dignity Health to add outpatient clinics and other ambulatory care services. Some of the growth will come from partnerships with Catholic and other-than-Catholic entities, which may include for-profit companies, Dean said.
"We will continue to be a not-for-profit health system," Dean said. "When we look at our portfolio of services that we offer to the poor and most vulnerable in this country, we want to be more diversified. We want to make sure we are doing the right care in the right place that fits the individual's needs."
Both Dean and Sr. Carle said the change in governance structure began well before and was not in response to Phoenix Bishop Thomas J. Olmsted's December 2010 decision to no longer recognize the Catholic status of Catholic Healthcare West's St. Joseph's Hospital and Medical Center in Phoenix. That decision followed the termination of an 11-week pregnancy that was determined to be necessary to save the mother's life. The hospital said it had acted to save the only life that could be saved and had done so in accordance with the Ethical and Religious Directives for Catholic Health Care Services, but Bishop Olmsted disagreed and said the intervention had been a direct abortion.
Sr. Carle said throughout the governance reorganization process, the sponsors' intent has been "to clarify that our Catholic hospitals follow the Ethical and Religious Directives and our non-Catholic hospitals follow the Statement of Common Values."
None of the hospitals in the Dignity Health system will perform direct abortions or in vitro fertilization, the system said. Its Catholic hospitals will not perform sterilizations.
New logo
Dean said that over the next four months, the organization will transition to the new name and logo on stationary, websites and signage at all of its hospitals and ancillary services. For example, Marian Medical Center, a member of Catholic Healthcare West, will be rebranded as Marian Medical Center, a Dignity Health member.
Dignity Health's logo is meant to represent the coming together of many caregivers, services and care centers to create a continuum of care. According to Dean, the three curved sections represent the three aspects of the organization's mission: quality care, advocacy and partnering.
Sr. Carle said the name Dignity Health reflects a foundational theme for the company and that dignity is among a set of core values that include justice, collaboration, stewardship and excellence.
> View the Dignity Health video
Dignity Health's 'Statement of Common Values'
Like Catholic Healthcare West before it, Dignity Health requires its other-than-Catholic partners to sign a "Statement of Common Values" that includes a commitment to:
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Respect the dignity of all persons from conception to natural death
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Acknowledge patients' rights to make medical decisions, including accepting or rejecting treatment
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Provide spiritual care to patients, families and coworkers
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Work collaboratively with health care colleagues and other providers, and with community and government leaders
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Give preferential treatment to the poor and vulnerable through direct services and advocacy
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Make decisions and resolve differences in a manner consistent with the system's core values
Dignity Health's Sponsorship Council
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Sr. Sheila Browne, RSM, a member of the Sisters of Mercy of the Americas West Midwest Community, Omaha, Neb.
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Sr. Lillian Anne Healy, CCVI, congregational leader of the Congregation of the Sisters of Charity of the Incarnate Word of Houston
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Sr. Maureen McInerney, OP, prioress general of the Dominican Sisters of San Rafael, Calif.
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Sr. Patricia Rayburn, OSF, provincial minister of the Sisters of St. Francis of Penance and Christian Charity in Redwood City, Calif.
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Sr. Corinne Sanders, OP, general councilor and member of the leadership team of the Adrian Dominican Sisters in Adrian, Mich.
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Sr. Susan Snyder, OP, prioress general of the Dominican Sisters, Congregation of St. Catherine of Siena, Taos, N.M.
Copyright © 2012 by the Catholic Health Association
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