The newly merged entity of religious hospitals in California, called CommonSpirit Health, is now the nation’s largest nonprofit hospital system by revenue. It is worth $29 billion and has 142 hospitals and more than 700 care sites across 21 states. These are hospitals that serve diverse populations, including people with private insurance coverage and Medi-Cal—the California State Medicaid program—among other types of health care coverage.
California Attorney General Xavier Becerra approved the state merger in fall 2018, including certain conditions for the conditionally approved merged entity. Under California law, the attorney general must approve mergers and other similar transactions involving non-profit health facilities or systems, and has authority to impose conditions on that approval. Attorney General Becerra put in place many of the conditions the National Health Law Program and allies recommended to preserve access to reproductive health and other critical services, protect against discrimination by the merged entity, maintain Medi-Cal and Medicare contracts charity care, and community benefits, and provide a mechanism for regular compliance reporting from CommonSpirit Health to the attorney general. However, there remain areas where we believe Becerra could have required stronger protections to preserve and expand health access and services.
One key continuing concern is the remaining ambiguity around the application of the updated version of the Catholic Ethical and Religious Directives (ERDs), both as applied to this merger as well as any future mergers or transactions involving Catholic health facilities. This is particularly concerning as it applies to CommonSpirit Health facilities outside of California, to which the California attorney general’s conditions do not extend.
The ERDs are a set of mandates promulgated by the U.S. Conference of Catholic Bishops that provide rules for how and what care can be provided by Catholic facilities, and severely restrict access to certain reproductive health services, end-of-life care options, and services for transgender patients without regard to medical standards of care. An updated version of the ERDs was released in the summer of 2018, which includes broader restrictions on mergers and other collaborations between Catholic and non-Catholic health facilities. While the Catholic Church approved the CommonSpirit Health merger despite requirements that California non-Catholic hospitals in the system maintain providing services that may be prohibited by the ERDs, it is not clear how the Catholic Church will approach these kinds of deals moving forward. Reproductive health and health care advocates must remain vigilant to future Catholic hospital mergers, and continue to push for access to the full range of reproductive and sexual health care for all patients at Catholic health care facilities.
For more information about the updated ERDs, see the National Health Law Program’s fact sheet: The Ethical & Religious Directives: What the 2018 Update Means for Catholic Hospital Mergers. See more analysis of the merger of Dignity Health and Catholic Health Initiatives.