HOUSTON—Catholic Health Initiatives will acquire six-hospital St. Luke's Episcopal Health System in Houston, pending regulatory approvals. The Texas Episcopal Diocese approved the definitive agreement, which includes a $1 billion investment from Englewood, Colo.-based CHI. CHI will also spend another $1 billion in establishing a foundation to help the community's underserved. The transaction is expected to be finalized in the summer, and the system would be renamed St. Luke's Health System. “The relationship with Catholic Health Initiatives ensures the Greater Houston area will retain one of its great healthcare institutions, while best preparing St. Luke's to meet future changes in healthcare,” CHI President and CEO Kevin Lofton said in the release. CHI beat two Texas systems to acquire St. Luke's after an 11-month evaluation process that included 30 suitors. CHI was among three finalists named last month: five-hospital Methodist Hospital System in Dallas, and eight-hospital Memorial Hermann Health System in Houston. Lofton said in an interview that the lure of being part of a national system was attractive to St. Luke's, which would give the system its only presence in Texas. St. Luke's asked all bidders to include a proposal to create a not-for-profit foundation, which the Diocese said would maintain its commitment to a healthy community while no longer providing acute care. “This new foundation will address a widening gap in healthcare throughout our 57-county area,” Diocese Bishop C. Andrew Doyle said in the release. In its fiscal 2012, ended Dec. 31, St. Luke’s earned $59.6 million on $1.24 billion in revenue.
(This item has been updated to correct St. Luke's earnings figures.)