Catholic Healthcare West, which operates six hospitals in the Sacramento region, is changing its name to Dignity Health and cutting its affiliation to the Catholic Church.

The changes will mean little to Dignity's patients and approximately 7,000 employees in the Sacramento region. Mercy General, Mercy San Juan and Mercy Folsom hospitals will remain Catholic. The system also operates Methodist Hospital in Sacramento, Woodland Healthcare hospital and Sierra Nevada Memorial Hospital in Grass Valley.

The name change "supports our long-term plan to grow and coordinate care," Dignity President and Chief Executive Officer Lloyd Dean said in a statement announcing the changes Monday. Health care providers nationwide are under pressure to merge or coordinate services to remain profitable.

And the structural change could change perceptions, easing Dignity's transition into new markets. Dean has acknowledged in published reports that CHW's religious affiliation has been a concern for non-Catholic hospitals considering becoming a part of the network.

"This move allows them to expand. This enables Dignity to grow their business side in other areas," said Scott Seamons, a regional vice president at the Hospital Council of Northern & Central California. "They want to have a presence in a city that's not just a religious presence. It's a new era to enhance business lines."

A restructuring of Dignity's governing body maintains many of the system's Catholic ties, but it is no longer an official church ministry.

Its hospitals – guided by Catholic ethical and religious directives, or a secular "statement of common values" in the case of non-Catholic facilities – do not offer in vitro fertilization services offered by other major health networks, or perform abortions.

Mercy's Sacramento-area hospitals continue to be directly sponsored by the Sisters of Mercy order. Patient care at Dignity facilities will not be affected.

"While we have a new name, it's the same mission," said Michael Taylor, a Dignity Health senior vice president in Sacramento. "As we look to the future, our organization will grow and a great deal of that growth may now be through partnerships beyond the West."

The organization now has 40 hospitals in California, Nevada and Arizona.

The move is a recognition of and a reaction to a changing health care climate, say both Dignity officials and analysts. Health systems are merging to consolidate market power and to gird for what may happen when federal health care changes go into effect in 2014.

Growing Dignity Health could also mean lessening the system's dependence on ever-decreasing Medicare reimbursements, while becoming more attractive to private insurers, said Colin Cameron, a professor of economics at the University of California, Davis, who tracks the health care industry.

It's a key point. Serving society's poor and disenfranchised has been an essential part of the mission since the Catholic Healthcare West network was founded in 1986.

The mission's roots stretch back to the 1850s, when the order Sisters of Mercy of the Americas opened the Pacific Coast's first Catholic hospital in San Francisco.

Today the system operates in some of the communities hardest hit by the economic meltdown, including the Sacramento and San Joaquin valleys.

Financial data underscore the mission's costs.

The health system spent $947 million during the fiscal year that ended June 30, 2011, in community benefits, charity care, unreimbursed Medicaid costs and other free programs for the poor.

Indeed, despite increasing revenue, the health network has seen a rise in claims for financial assistance.

The numbers of patients at its hospitals receiving government medical aid outnumber those with private insurance, system officials said.

For faith-based systems, reaching into secular markets makes solid business sense, Seamons said.

"CHW is looking at the market carefully and if it's national, you have to open the doors pretty wide," he said. "The Sacramento message is that this creates opportunity for CHW to be a stronger player in health care," Seamons said.

And officials hope the new strategy will also ensure its viability in the long term.

CHW experienced tremendous growth during the late 1990s when it acquired more than 30 medical facilities. Since then, the company's mergers and acquisitions have slowed.

"The main thing that's happening is that there's consolidation going on. The impetus is to have more power in each market," said Cameron, the UC Davis economist. "It's not surprising (Dignity) is doing this. They want to get bigger, and this is a way to do it."

DIGNITY HEALTH

Founded: 1986 when the Sisters of Mercy joined with 10 other hospitals.

Employees: 55,000

2011* revenue: $10.6 billion

2011* net income: $917 million

Assets: $11.8 billion (2010)

Locations: 40 acute care hospitals and 150 ancillary care sites in Arizona, California and Nevada

AREA HOSPITALS

• Mercy General Hospital, Sacramento

• Mercy Hospital of Folsom

• Mercy San Juan Medical Center, Carmichael

• Methodist Hospital, Sacramento

• Sierra Nevada Memorial Hospital, Grass Valley

• Woodland Healthcare

* Fiscal year ending June 30

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