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12-hospital CHI Franciscan-Virginia Mason system would be part of CommonSpirit under new deal

Washington health systems CHI Franciscan and Virginia Mason agreed to explore a combination through a joint operating company that would be part of CommonSpirit Health, the organizations said July 16. 

The proposed 12-hospital system would include more than 250 care sites and nearly 5,000 employed and affiliated providers. Combining the two systems would allow Tacoma-based CHI Franciscan and Seattle-based Virginia Mason to "shape healthcare nationally," according to Virginia Mason CEO Gary Kaplan, MD. He told Becker's Hospital Review in an interview that the organizations "envision creating a health system of the future."

Ketul Patel, the CEO of CHI Franciscan and president of the Pacific Northwest division at parent system CommonSpirit Health, said in the same interview that, "Together, we're going to not only be able to boast that we have the largest access point in the state, but we are going to be the largest and best-quality [system] in the state of Washington. We're in a unique place to scaling and being a showcase for the entire country." 

Dr. Kaplan and Mr. Patel would serve as co-CEOs of the organization, and the health system's board would have equal representation from both organizations. 

Quality and innovation are major focuses of the proposed deal. Virginia Mason is one of only 32 hospitals in the U.S. and the only hospital in Washington to receive an A grade in quality and patient safety from The Leapfrog Group every spring and fall since the organization started publishing grades. All but two of CHI Franciscan's hospitals received A rankings from Leapfrog this spring, Dr. Kaplan said. Outside of that, Virginia Mason and CHI Franciscan draw patients nationally for cardiology and complex spine programs, Mr. Patel said.

Dr. Kaplan said details of the deal will be hammered out as the organizations move toward a final agreement, with hopes to finalize the process by the end of the year. The joint operating company would be in addition to the organizations' prior relationships, which include partnerships in obstetrics and women's health, as well as radiation oncology. 

No financial information about the proposal was disclosed. Virginia Mason reported total revenues of $1.2 billion in fiscal year 2019, while Chicago-based CommonSpirit's totaled nearly $21 billion.

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