By Melanie Evans, Dow Jones Newswires Hospital operator Catholic Health Initiatives, which has struggled after rapid expansion and a foray into health insurance, is in merger talks with Dignity Health to create one of the nation’s largest nonprofit hospital systems by revenue. Catholic Health Initiatives and Dignity Health said in a statement they are in talks regarding “aligning their organizations.” A person familiar with the matter said the talks involve a merger. The deal would combine 103 hospitals owned by Arapahoe County-based Catholic Health Initiatives, with 39 hospitals operated by San Francisco-based Dignity Health.