Daughters of Charity National Health System-West, based in Los Altos Hills, Calif., and Catholic Healthcare West, San Francisco, have signed a letter of intent to explore a merger.
The deal would create a healthcare system with combined annual revenues of $2.7 billion, a CHW spokeswoman said.
CHW is sponsored by the Sisters of Mercy Regional Communities in Auburn and Burlingame, Calif., and the Sisters of St. Dominic of Adrian, Mich. CHW-the seventh-largest healthcare system in the nation based on net patient revenues-includes 17 acute-care hospitals, one retirement and care center, and a medical foundation including 3,310 physicians. Its facilities are located throughout Arizona, California and Nevada.
It also is part-owner of PriMed Medical Management and Consulting Services, San Ramon, Calif., which manages Hill Physicians Medical Group of San Ramon.
CHW earned $100.4 million on revenues of $1.8 billion for the fiscal year ended June 30.
DCNHS-West has facilities in the California cities of Los Angeles, Daly City, San Jose, Lynwood, Morgan Hill and Moss Beach. For the fiscal year ended June 30, the system reported $509 million in revenues. Net income wasn't available.
The two organizations have "geographically complementary" networks. Linking them would "create an integrated delivery system with the capability of providing high-quality, cost-controlled health services necessary in a managed-care environment," the companies said in a written statement.
The leadership of the two systems agreed that their collaboration would strengthen their missions of providing services to the poor and underserved.
Although the proposed merger is with a Roman Catholic system, CHW also has "found ways to work with non-Catholic hospitals and is looking for ways to link with others that share our mission," the spokeswoman said. CHW now includes three non-Catholic hospitals, all in California.