Health & Medicine

Why Dignity nurses are challenging merger with Catholic health care giant

A registered nurse at Mercy Medical Center in Redding, one of Dignity Health’s 31 hospitals in California. The California Department of Justice will take comment Thursday in Woodland on whether it should approve the pending merger of San Francisco-based Dignity Health with health-care giant Catholic Health Initiatives, and this meeting, like others before it, is expected to draw a sea of red-shirted Dignity nurses opposing the deal.
A registered nurse at Mercy Medical Center in Redding, one of Dignity Health’s 31 hospitals in California. The California Department of Justice will take comment Thursday in Woodland on whether it should approve the pending merger of San Francisco-based Dignity Health with health-care giant Catholic Health Initiatives, and this meeting, like others before it, is expected to draw a sea of red-shirted Dignity nurses opposing the deal. AP

The California Department of Justice will take comment Thursday in Woodland on whether it should approve the pending merger of San Francisco-based Dignity Health with health-care giant Catholic Health Initiatives, and this meeting, like others before it, is expected to draw a sea of red-shirted Dignity nurses opposing the deal.

Locally, Dignity operates Mercy Hospital of Folsom, Mercy San Juan in Carmichael, Woodland Memorial Hospital, as well as Mercy General and Methodist Hospital in Sacramento. The company operates at total of 39 acute-care hospitals in three states, 31 of which are in California. CHI, based in Englewood, Colo., owns roughly 100 acute-care hospitals in 18 states. The two companies do not have overlapping territory.

The state Attorney General’s Office had independent health-care consultants prepare an impact report on the merger. At a recent public meeting in Sacramento, Dignity management and employees joined with local residents in commenting observations in the report and other aspects of the merger.

Dignity executive Laurie Harting told Deputy Attorney General Wendi Horwitz that the company spends “millions of dollars here in Sacramento County each year on free care for the poor, community grants and programs that meet our most pressing health and social needs like homelessness and affordable housing. We are committed to staying here for many years to come and continuing to live up to our mission.”

But members of the California Nurses Association said Dignity documents submitted to the Attorney General do not offer enough unqualified and guaranteed commitments. Joleen Okamoto, a registered nurse at Methodist Hospital, asked that Justice officials require Dignity to keep all its California hospitals open for 15 years.

Dignity-CHI Impact Report

She said she and others are concerned the merged company will use the cost of seismic retrofits as an excuse to close or reduce services at poorly performing hospitals in rural locales or in urban areas serving a large Medi-Cal population. While Dignity has done seismic retrofits of Methodist’s emergency department and Family Birth Center, Okamoto said, other departments are awaiting upgrades to meet 2030 compliance standards.

Mercy General RN Kathy Dennis, who sits on the CNA board, said that Dignity CEO Lloyd Dean has been quoted in news reports as saying that the company is looking at a range of ways to reduce costs, including creating so-called “micro-hospitals” that offer limited services. The company drastically cut services at its hospital in Henderson, Nev., turning it into a micro-hospital, she said.

Okamoto said: “If they are truly invested in the health and well-being of our community, they need to demonstrate this by ensuring all of the departments throughout our hospital are open beyond 2030, maintaining the same level of services in place now.”

In a statement sent to The Bee after the public meeting, Dignity officials said: “To date, Dignity Health has invested more than $1 billion in seismically strengthening our hospital buildings and all of our facilities are compliant with 2015 seismic standards or are in the process of becoming compliant with the 2020 standards. We have a strong track record of meeting the milestones in seismic compliance.”

Dennis and other speakers also asked Justice officials to ensure that Dignity hospitals meet their charity care obligations, stressing that the company’s request to carry over deficits or surpluses in charity care sets a dangerous precedent for mergers of other nonprofit hospital organizations.

However, nonprofit leaders such as Kate Hutchinson of Lutheran Social Services and Kelly Bennett of Sacramento Covered praised Dignity for its work in charity care. Bennett noted that her organization recently worked with Dignity to expand services for local residents experiencing homelessness.

Of the merger, Bennett said: “Any way that these two organizations can come together with their commitment to the community, strengthening their business model and putting best practices in place, is only to the benefit of our local communities.”

Nurses, however, pointed out that charity care funding declined for two other Catholic institutions – St. Joseph Health and Providence Health & Services – after the California Attorney General allowed their 2016 merger. The combined company promised to provide $72 million a year in charity care, but data they submitted to the state showed the merged companies had fallen $20 million short of that amount last year.

Officials with St. Joseph Providence have said that the demand for charity care has fallen as more people have gotten insurance through the Affordable Care Act. But at the Sacramento hearing, civil-liberties advocate Maya Ingram said nonprofit hospitals must do a better job of letting patients know that funding is available.

“We ask that the AG require Dignity Health hospitals to post information about these policies and programs,” said Ingram, a legislative attorney with the American Civil Liberties Union. “The hospitals should post this information to their websites, have clear signs in emergency rooms that are posted in multiple languages.”

Ingram said every uninsured patient should leave the ER with a charity care application, and applications should say in bold letters that no social security number is required to qualify for charity care.

Ingram and Redding resident Anita Brady joined nurses in calling upon Justice officials to ensure that women have access to reproductive services that Dignity doctors recommend. Brady said that the Mercy hospital in Redding had sterilized her husband as part of prostate surgery to ensure his survival, but that when doctors determined that future pregnancies would endanger the lives of two Redding women, the same hospital fought against providing them the tubal ligations that their physicians recommended as part of Caesarean sections. In one of the two cases, the woman in question lost her legal appeal and had to travel 90 miles away to have the surgery performed.

Ingram said: “These denials have real consequences. Patients have endured serious pain and suffering, loss of dignity, received care that deviated from best medical practices, and there have even been deaths.”

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In a statement Dignity provided to The Bee after the meeting, Lori Dangberg, vice president with the Alliance of Catholic Health Care, said that although Dignity Health has gone through governance changes in the past, its Catholic hospitals have always been guided by the ethical and religious directives of the church. As part of the restructuring, the company’s 12 non-Catholic acute-care hospitals will continue to meet other needs for reproductive services.

Ingram and nurses asked Justice officials to require Dignity-CHI to continue offering the same women’s reproductive services for at least 15 years.

Nurses also asked officials to ensure that Dignity honors all collective bargaining agreements in future and adhere to federal funding requirements for employee pensions. Methodist RN Amber Arcure said Dignity nurses around the state had worked over the last two decades to hammer out a master agreement that provides protections for their patients, their wages, their benefits and their working conditions, and they didn’t want Dignity-CHI to slip through a legal loophole.

“Our master agreement depends on Dignity Health being our employer,” Arcure said. “If ... we have a new employer, we cannot be certain that the patient protections or any of the provisions of our master agreement can be preserved.”

Nurses said they are also concerned that Dignity-CHI would be allowed to classify its pension as a church pension, avoiding mandated contributions intended to ensure the financial stability of pension funds.

Dignity executives told Justice officials that the merger would not change the company’s commitment to its employees, to social justice or to financial stability. Both companies would be able to enhance and expand clinical expertise and their use of technology, they said, in a way that allows the current Dignity hospitals to continue serving California patients for many years to come.

“Dignity Health is coming together with Catholic Health Initiatives to form a new, not-for-profit health system,” said Harting, senior vice president of operations for Dignity’s Sacramento service area. “It will help us advance our social justice work and advocate for policies that extend health care to more people. It will help us invest in new technology that will help patients.”

How to comment

Want to make a statement about the proposed merger of Dignity Health and Catholic Health Initiatives? You must act by Sept. 27.

Attend a public meeting: The next one in the Sacramento region will be at 1 p.m. Thursday at the California Agriculture Museum, 1962 Hays Lane, Woodland, CA 95776.

Contact Deputy Attorney General Wendi A. Horwitz: 213-269-6552, wendi.horwitz@doj.ca.gov or 300 S. Spring St., Suite 1702, Los Angeles, CA 90013.

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