San Francisco-based Dignity Health plans to merge with Colorado-based Catholic Health Initiatives in a deal that would combine a couple of the largest nonprofit providers in the country, Dignity announced on Oct. 24.

Dignity Health owns five hospitals in the Tri-Counties, including Arroyo Grande Community Hospital, French Hospital Medical Center in San Luis Obispo, St. John’s Pleasant Valley Hospital in Camarillo, St. John’s Regional Medical Center in Oxnard and Marian Regional Medical Center in Santa Maria.

The letter of intent comes one month after the two systems formed a partnership called the Precision Medicine Alliance LLC, which will create the largest community-based precision medicine program in the country.

“The potential to align the strengths of these two organizations will allow us to play a far more significant role in transforming health care in this country,” Catholic Health CEO Kevin Lofton said in a news release. “Together, we could enhance our shared ministry as the health industry transitions to a system that rewards the quality and cost-effectiveness of care.”

There is no geographical overlap of acute care facilities, Dignity said.

Dignity Health has a 22-state network of more than 9,000 physicians, 62,000 employees, and 400 care centers, including hospitals, urgent and occupational care, imaging centers, home health and primary care clinics.

CHI operates in 18 states and comprises 103 hospitals, including four academic health centers and major teaching hospitals as well as 30 critical-access facilities; community health-services organizations; accredited nursing colleges; home health agencies; living communities; and other facilities and services.

The merger discussions will continue through early 2017, Dignity said.

• Contact Alex Kacik at akacik@pacbiztimes.com.