ENGLEWOOD, Colo. & VANCOUVER, Wash.--(BUSINESS WIRE)--

Catholic Health Initiatives and PeaceHealth, two nonprofit health care systems, have signed a nonbinding letter of intent to create a new regional health care system with the ability to improve care and access for individuals, employers and communities across the northwest U.S.

The partnership will create an integrated health system in the region, combining seven Catholic Health Initiatives hospitals in Washington and Oregon with nine PeaceHealth hospitals in Washington, Oregon and Alaska. The new organization will include nearly 26,000 employees and about 950 employed physicians serving in hospitals, physician clinics, outpatient care clinics, long-term care facilities, laboratories and private homes across the region.

The new organization, with annual revenues of almost $4 billion, will build on the strengths of both organizations to better manage care and resources in a rapidly changing health care environment.

Catholic Health Initiatives and PeaceHealth share common cultures and values, said Kevin E. Lofton, president and chief executive officer of Englewood, Colo.-based CHI, the nations second largest faith-based health system. We see this as a natural evolution a perfect way to share economies of skill and scale, improve health services and reinforce our common mission to create and nurture healthier communities.

Alan Yordy, president and chief mission officer of Vancouver, Wash.-based PeaceHealth, said, PeaceHealth and Catholic Health Initiatives have long traditions of serving communities throughout the Northwest and providing health services to all people. Our shared mission and combined strengths will allow us to better serve individuals with safe, high quality networks of care built upon more than a century of service in the Northwest.

The nonbinding letter of intent is the first step in the partnership process. Leaders of Catholic Health Initiatives and PeaceHealth expect to form the new system before June 30, 2013, after completing the due diligence and approval process. The two organizations will be equal partners in the fully integrated health care system serving the northwest region.

Discussions were prompted by a rapidly changing health care environment that demands a more coordinated, integrated approach to the way health and wellness services are delivered to individuals and communities. It also demands the ability to accept more financial risk in caring for defined populations, such as Medicaid recipients. The size and scale of the new organization will allow it to form additional collaborations and networks of care that will include physicians, hospitals, insurers and other caregivers, increasing access to high-quality health services while reducing costs. The partners will reduce costs by making infrastructure investments more efficiently as a single organization in areas such as information technology systems.

The integration of the two organizations is expected to take place over time.

The new organization will include two CHI hospitals in Oregon Mercy Medical Center, Roseburg; and St. Anthony Hospital, Pendleton and five facilities in Washington that comprise Tacoma-based Franciscan Health System: St. Joseph Medical Center, Tacoma; St. Francis Hospital, Federal Way; St. Clare Hospital, Lakewood; St. Anthony Hospital, Gig Harbor; and St. Elizabeth Hospital, Enumclaw. Also included are Franciscan Medical Group and Franciscan Hospice and Palliative Care.

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Catholic Health Initiatives, PeaceHealth Agree to Form Integrated Regional Health Care Network to Serve Northwest U.S.