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Catholic Healthcare West (CHW) announced today that it has severed ties with the Catholic Church and changed its name to Dignity Health as part of a governance restructure.

The country’s 5^th largest health system hopes to sidestep the unique challenges of being a Catholic health system as it seeks to expand its market share. This is an extremely significant development at a time when the nation’s Catholic Bishops have been demanding that Catholic hospitals bow to the authority of the Bishops on ethical matters. Many of the Catholic hospitals in the nation were founded by orders of sisters, not by local dioceses, and the leadership of these hospitals has increasingly included non-Catholic hospital administrators and boards made up of lay people.

While Dignity will no longer be a ministry of the Catholic Church, it will remain a non-profit system “steeped in Catholic tradition.” That will mean different things for the historically Catholic and non-Catholic hospitals in the system.

The Dignity system’s 15 secular hospitals will continue to abide by a Statement of Common Values which does not restrict sterilization procedures or birth control provisions. However, the ban on in-vitro fertilization procedures and abortions – except in cases where the women’s life is in danger – will remain in place at these facilities.

Dignity officials said the 25 Catholic hospitals in the system will continue to abide by the Directives. However, by disengaging from the church hierarchy, the hospitals would no longer be subject to interpretation of the Directives by local Bishops.

That oversight had become a flashpoint in 2010, when St. Joseph’s Hospital, a CHW Catholic hospital in Phoenix, AZ, was deemed by a local bishop to be no longer part of the church because hospital ethicists had allowed a mother of four to terminate her 11-week pregnancy after discovering she had a serious heart condition.

With plans to triple the size of its assets, CHW executives realized that being a Catholic system was a hindrance to forming potential partnerships that they no longer could afford to accept.

Lloyd Dean, the president and CEO of Catholic Healthcare West, said the concerns about his system's Catholic affiliation have hampered some potential deals. "I have been contacted over the last couple of years by many, many different constituencies who have an interest in Catholic Healthcare West and what we have accomplished," Dean said. "But one of the things when we get down to what I'll call the real discussions as they confer with their boards is, 'What does the future mean if we're a non-Catholic entity? Will we have to become Catholic? What will be the Catholic influence?' "

The structure of the new board reflects the dramatic restructuring in the health system’s governance. Catholic Healthcare West’s top governing board was made up of nuns from six religious orders. The new nine-member board of directors of Dignity Health includes two nuns, with the rest being lay business leaders and health care executives.