Health Affairs, 25, no. 1 (2006): 134-147 doi: 10.1377/hlthaff.25.1.134 © 2006 by Project HOPE	New Online   New Issue: China & India   Obesity In China   Pay Cuts For Medicare Docs   Access To Care Woes

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Consolidation

Corporate Structure And Capital Strategy At Catholic Healthcare West

This paper analyzes the evolution of capital investment strategy at Catholic Healthcare West (CHW) between 1996 and 2005, as the forty-hospital system reversed its financial losses and diversified into ambulatory services and high-growth markets. The system developed a formal process for allocating capital among profitable facilities and those providing charitable services in communities with high social needs. Capital priorities shifted from weak facilities in low-growth markets (from 35 percent to 27 percent of total investment) to strong facilities in high-growth markets (from 32 percent to 45 percent). Mission-related investments were made to sustain, but not expand, the system’s presence in low-income communities.

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