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CHI Franciscan, Virginia Mason Announce Final Merger Agreement

Analysis  |  By Melanie Blackman  
   January 05, 2021

The two health systems will form a new integrated health system called Virginia Mason Franciscan Health, where the focus will be on "quality, safety, and patient experience."

CHI Franciscan, a subsidiary of CommonSpirit Health, and Virginia Mason announced Tuesday afternoon that the two organizations have finalized an agreement to integrate.

The two Washington state-based health systems made the announcement almost six months after signing a memorandum of understanding for joint operation in mid-2020.

The new integrated health system will increase patient access over 300 care sites across Washington state, and will "focus on expanding patient access points and developing innovative models of care delivery that enhance quality and the patient experience," according to the statement.

Virginia Mason Franciscan Health will operate with two CEOs—Ketul J. Patel, president of the Pacific Northwest Division of CommonSpirit Health, and Gary S. Kaplan, MD, chairman and CEO of Virginia Mason.

The two healthcare executives will serve to bring "together the most effective elements from each entity to build a transformative health system for the communities it serves throughout the Pacific Northwest region and beyond," according to the statement.

The new integrated health system will serve as a “prototype of care innovation nationally" and will operate as part of CommonSpirit Health.

In early 2019, CommonSpirit formed after Dignity Health and Catholic Health Initiatives merged, creating a health system with over 700 care sites and 142 hospitals across 21 states. The health system also had a dual-CEO model, with CHI CEO Kevin E. Lofton serving alongside Dignity Health president and CEO Lloyd H. Dean until Lofton's retirement in June 2020.

"Virginia Mason Franciscan Health has an incredibly strong foundation to build upon as our two storied organizations come together with an exciting vision, particularly as we expand services for the most vulnerable in our communities,” Patel said in a statement. "We are committed to building a consumer-focused health care system while expanding our presence as a national leader in the transformation of health care delivery."

"Today is a great day for our organization and our community," Kaplan said in a statement. "For years we have worked with CHI Franciscan, but now, together, our potential is limitless. We will be able to apply learnings across our entire system that not only improve the patient experience, but also change health care delivery for the better."

Related: Virginia Mason Memorial in Yakima 'unwinds' from Seattle-based Virginia Mason

Related: Despite Pandemic, Healthcare M&A Activity Stays Apace

Related: Memorial Decides to Go Independent, Will 'Unwind' Affiliation from Virginia Mason

Related: Answering the Call: CommonSpirit Strives to End Health Inequalities

Melanie Blackman is the strategy editor at HealthLeaders, an HCPro brand.

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