Becker's Hospital Review

12 CFO / FINANCE Dignity Health CFO Dan Morissette discusses CHI megamerger, Apple partnership By Ayla Ellison 2 018 was a big year for Dignity Health, as the health system finalized a merger agree- ment with Catholic Health Initiatives and entered into other interesting partnerships. San Francisco-based Dignity Health, one of the largest health systems in the nation, agreed to merge with Englewood, Colo.-based CHI in late 2017, and the deal is set to close by Jan. 31. In November, Dignity and CHI unveiled the name for the $28.4 billion system their merger will create: CommonSpirit Health. Dignity Senior Executive Vice President and CFO Daniel Morissette, who will serve as CFO of CommonSpirit, discussed the merger with Becker's Hospital Review in December. He said that aer the transaction with CHI closes, one of his top priorities for 2019 is to help the combined system complete its strategic initia- tives and maintain a stable financial position. "We have $5 billion in debt, and CHI has about $9 billion in debt. We take very seri- ously the fact that not only are we going to need more access to capital in the future, but to make sure we're running a financially sta- ble operation," he said. In addition to moving forward with the CHI merger, Dignity saw its financial position im- prove in 2018 and became one of the first health systems in the nation to pilot Apple's medical records system. "e partnership [with Apple] came about, in part, because we're very engaged in the tech community and we're located in the Silicon Valley in San Francisco," Mr. Morissette said. "We had always had relationships with Apple, and when the opportunity came, we were so excited to be one of the first systems — the first cohort of systems to join with Apple." Mr. Morissette said the most appealing part about introducing Apple's health records fea- ture is how it benefits patients. "e reason we were interested in it, primar- ily, is because it empowers patients to have more control or more information about their own life. Now, people can access their own health records on their iPhone. at part, we're really excited about," he said. When it comes to Apple, Google and other technology companies pushing further into healthcare, Mr. Morissette thinks healthcare providers need to be more flexible. "is is a very traditional business. In fact, if you looked in an old dictionary at tradi- tional business, you'd probably see a picture of most of the health systems there," he said. "One of the good things about working with Apple … and smaller startup companies … is there's no walls. ey just say, 'Hey, what about this? What if we try this?' Some of the things we can't do because of patient safety or other reasons, but a lot of it, we're like, 'Okay, let's try it.' I think in that sense, it's something we really need to embrace because they have figured out how to make consumers generally happy otherwise." n Kentucky hospital files for bankruptcy By Ayla Ellison P ineville (Ky.) Community Hospital Association filed for Chapter 7 bankruptcy Nov. 29. PCHA owned and operated Pineville Community Hospital, now called South- eastern Medical Center, until entering an agreement with Fort Lauderdale, Fla.- based Americore Health in 2017. PCHA still owns the hospital real estate, but it entered a long-term lease deal and sold non-real estate assets to Americore. In its bankruptcy petition, PCHA listed its assets as between $10 million and $50 million and listed its liabilities in the same range. PCHA said it has at least 200 creditors. n 4 hospitals in Oklahoma and Tennessee miss payroll By Ayla Ellison S everal hospitals in Oklahoma and Tennessee managed by the same com- pany missed payroll, prompting one CEO to resign. Shelly Dyer confirmed to News 9, an Oklahoma City TV station, that she had re- signed as CEO of Prague (Okla.) Community Hospital Dec. 13 due to stress. At that time, the hospital was a week behind on payroll and had lapsed on its mal- practice insurance. However, in the early morning hours of Dec. 14, employee payroll was distributed and the hospital's malpractice insurance was paid. Prague Community Hospital is managed by Kansas City, Mo.-based Empow- erHMS, which also operates several other hospitals in Oklahoma. As of Dec. 13, Fairfax (Okla.) Community Hospital and Haskell County Community Hospital in Stigler, Okla., which are operated by EmpowerHMS, were also behind on pay- roll, according to local news station KJRH. Lauderdale Community Hospital in Ripley, Tenn., an EmpowerHMS facility, was also behind on paying employees, according to WMC Action News 5. Lauderdale Community Hospital CEO Michael Layfield told WMC Action News 5 that the hospital is facing the same financial challenges as many other rural hospitals across the nation. "We are struggling because of volumes dropping and decreases in reimburse- ment," he said. n

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