Catholic-Secular Health-Care Partnerships Prompt Scrutiny

The moral questions that such partnerships can generate have drawn the attention of both the Vatican and the U.S. bishops.

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WASHINGTON — How should a Catholic health-care provider operate when it enters in partnership with a secular counterpart in contemporary America’s fraught moral climate with respect to sanctity of human life issues?

There are no simple answers to this question, as shown by recent actions on this matter by Church leaders both in Rome and in the U.S. The Vatican has released a document provoked by the actions of a U.S. Catholic health-care network, and during their November 2014 annual meeting, the U.S. bishops approved a proposal to update the part of their "Ethical and Religious Directives for Catholic Health Care" (ERDs) that deals with such partnerships.

The new Vatican document, issued by the Congregation for the Doctrine of the Faith (CDF), offers 17 “principles” to help bishops and health-care administrators evaluate such partnerships, will provide a framework for modifying the ERDs. A team of bishops is expected to begin its work next year, but there is no deadline for an updated version of the directives.

“About a year ago, the U.S. Conference of Catholic Bishops’ Subcommittee on Health Care, which I chair, learned about a situation involving a Catholic health-care network that raised moral and canonical questions,” Bishop Robert McManus of Worcester, Mass., told the Register.

The USCCB contacted the Vatican for guidance. But instead of providing a simple Yes or No answer to the question about whether the specific merger should be approved, said Bishop McManus, the CDF provided the list of principles to be applied in the moral evaluation of various Catholic-secular partnerships.

“While it is commendable and, in some cases, important for the viability of a Catholic health-care institution to enter into collaborative relationships with non-Catholic partners, the question is whether it is morally possible,” said Bishop McManus.

The Vatican document does not reject such arrangements, but it also urges all those responsible for approving these partnerships to “ensure that the Church’s involvement in health care does not give scandal.”


Rapid Change and Shifting Alliances

Amid an era of rapid change and shifting alliances in the health-care sector, further advanced by the 2010 passage of the Affordable Care Act, both the U.S. bishops and Catholic hospitals have struggled to apply the "Ethical and Religious Directives" to collaborative ventures that have been established to keep Church-affiliated providers financially competitive.

Standalone Catholic hospitals have long given way to networks that span multiple states and dioceses. New financial incentives have led Catholic networks to acquire secular hospitals, establish insurance plans that take advantage of favorable rates generated by their networks and contract with physicians who may also provide services for secular employers.

But, according to Bishop McManus, the clear message from the CDF is that financial concerns cannot override serious moral considerations.

“As long as fundamental principles of cooperation are applied correctly, it may be possible for a Catholic institution to enter into collaborative relationships with non-Catholic partners,” said Bishop McManus, summing up the CDF instruction.

“But the Catholic entity also has to be careful of the possibility of scandal — defined as ‘creating a situation that might lead others into sin.’”


Dispute Over Dignity Health

During an interview with the Register, Bishop McManus noted that the 2012 decision to restructure San Francisco-based Catholic Healthcare West network into the non-Catholic entity Dignity Health had prompted the USCCB to seek further direction from the Vatican.

Catholic Healthcare West “proposed to reorganize and redefine itself as a secular, nonprofit health-care system [Dignity Health] governed by a self-perpetuating board and changed its name to reflect that new status,” explained Father Tad Pacholczyk, director of education for the National Catholic Bioethics Center, which advises U.S. dioceses and Catholic health-care executives on such matters.

“This would enable secular hospitals to join Dignity Health without requiring that they discontinue performing direct sterilizations. Hospitals that had been Catholic under CHW would remain so under Dignity Health and still would not engage in direct sterilizations.”

In 2012, said Father Pacholczyk, “then-Archbishop George Niederauer of San Francisco determined that the proposed restructuring of CHW would be consistent with Catholic moral and doctrinal teachings and that the sponsors and their Catholic hospitals would, therefore, be free to participate in it.”

But other bishops and moral theologians disputed that judgment, and so the USCCB sought guidance from Rome, which opted to provide the 17 principles to be applied to a variety of problematic cases.

National Catholic Bioethics Center's president, John Haas, emphasized that the CDF’s “Some Principles for Collaboration With Non-Catholic Entities for the Provision of Healthcare Services” do not repudiate the ERDs’ previous guidance on the formation of such partnerships.

“The ERDs are not out of line. It would be a matter of tightening them up,” said Haas.


Acceptable and Unacceptable Partnerships

Asked to outline the kind of partnership that would likely win approval, Haas offered a straightforward example — “a Catholic and non-Catholic hospital want to share a common laundry facility, which could save them millions a year.”

But if the collaboration included a shared pharmacy, where oral contraceptives were dispensed, the Catholic health-care provider “would be violating principles [that bar] material cooperation,” said Haas.

The National Catholic Bioethics Center explains that the “principle of cooperation in evil has been developed in the Catholic moral tradition as a guide to assist with the identification of different types of cooperation and the conditions under which cooperation may or may not be tolerated.”

An increasingly common issue, Haas said, is a Catholic health-care network seeking to acquire a community hospital.

“The Catholic health system says, ‘We will have nothing to do with the community hospital if they perform abortions, but since tubal ligations are not so grave … they can go ahead and do that,’” he said.

Haas has challenged such proposals when clients request his guidance.

“If a community hospital is owned, operated, managed and financed by a Catholic system, it is a Catholic hospital,” he has told clients, and so they cannot allow the provision of tubal ligations.


Affordable Care Act

Haas noted that Catholic health systems also are grappling with the moral problems associated with  the Affordable Care Act (ACA), which has embraced contraception and sterilization as basic healthcare, and authorized the Health and Human Services contraception mandate without adequate conscience protections for religious non-profits. 

 Meanwhile, some “reproductive rights” activists have sought to block efforts by Catholic networks to acquire secular hospitals because the new owners would no longer permit direct abortion and other services. Indeed, a 2013 article in Mother Jones, "Do Bishops Run Your Hospital?" asserted that "hospital mergers have allowed the bishops to accomplish in practice what they haven't been able to achieve through the political process: making abortion and contraception harder to access."

However, the ACA has also offered new opportunities for hospital networks, both Catholic and secular, by boosting reimbursement rates to hospitals and dramatically increasing the pool of insured patients. “The Congressional Budget Office estimates that 170 million people will have coverage through Medicare, Medicaid and the insurance exchanges by 2023, an increase of about 50% from 2013. By contrast, the number of people with employer-based coverage is expected to rise just 2%, to 159 million,” reported The New York Times in a Nov. 17 story.

Private health-insurance companies have already experienced a surge in policyholders, inspiring Catholic hospital systems to get into the insurance business with the hope of using the power of their multistate networks to control costs and attract consumers.

But the potential benefits of such a move also come with moral considerations, given that the HHS mandate now requires all insurers to provide co-pay-free contraception and surgical sterilization.

J.D. Flynn, a canon lawyer in the Diocese of Lincoln, Neb., said the Vatican instruction would help the U.S. bishops and health-care executives evaluate the structures that have been created to “distance” Catholic entities from problematic initiatives and policies.

“There is concern about the third-party administrators that Catholic hospital networks are using as they expand into health insurance,” Flynn told the Register.

“In some cases, Catholic insurance companies contract with a third-party administrator to provide contraception or other morally objectionable services. The end result is that some Catholic health insurance plans facilitate access to morally objectionable service,” Flynn added.

“The question is whether helping people to obtain and pay for immoral services constitutes ‘cooperation’ in providing those services. Moral theologians tend to agree with the commonsense conclusion that it does.”


Preserving a ‘Prophetic’ Witness

Christian Brugger, professor of moral theology at St. John Vianney Theological Seminary in Denver, told the Register that he welcomed the Vatican’s emphasis on the “prophetic” witness of Catholic health care.

“The issue of maintaining the integrity of our Catholic witness is what is most directly at stake in collaborations between Catholic and non-Catholic health-care networks,” said Brugger.

“It seems to be a new time in Catholic health care, where our bishops are saying: The example matters,” Brugger concluded.

“Even if you can work out an administrative structure where the evildoing is far from you, if people will be alienated from the Gospel because of the confusing example it gives, the arrangement will still compromise the duty you have as a Catholic health-care ministry to participate in the Church’s Great Commission.”

Joan Frawley Desmond is the Register’s senior editor.