The Daughters of Charity Health System, which operates Seton Medical Center and several other Bay Area hospitals, has signed a memorandum of understanding to join the nation’s largest Catholic health care system, Ascension Health Alliance. So writes the SanFrancisco Business Times.

The tentative deal was jointly announced Friday afternoon.

The Los Altos Hills-based Daughters of Charity — once part of Catholic Healthcare West, now Dignity Health — has struggled for years with money problems, many of them tied to safety net hospitals in Los Angeles. Its hospitals include Seton, in Daly City, Seton Coastside in Moss Beach, San Jose’s O’Connor Hospital, Gilroy’s Saint Louise Regional Hospital, and two Los Angeles area hospitals, St. Vincent Medical Center and St. Francis Medical Center.

Ascension Health Alliance, based in St. Luis, is the nation’s largest Catholic health system, with 80 hospitals, 121,000 workers and 1,400 sites in 21 states and the District of Columbia. Its fiscal 2011 operating revenue topped $15.5 billion.

Due dilligence will occur “in the coming weeks and months,” the systems said. There is no specific deadline for reaching a definitive agreement, but they hope to complete the process by year end.

Robert Issai, president and CEO of the Daughters’ system, said in a late Friday interview that internal discussions began late last summer, and the Daughters of Charity approached Ascension about a possible affiliation some time after that.

Although the two systems didn’t say exactly why the affiliation discussions are taking place, Daughters of Charity has been under financial pressure in recent years, and the Catholic health care world is in ferment at the moment. The two systems say they share the same values and a commitment to “those who are poor and vulnerable,” in the words of Anthony Tersigni, Ascension Health Alliance’s president and CEO.

Joining Ascension Health would strengthen the Daughters of Charity system, “while continuing our mission of providing comprehensive, excellent care,” Issai added.

As for timing, “we’ll do it as soon as we can,” Tersigni said.


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