Nashville's prestigious Baptist Hospital System, once one of the market's most active hospital acquirers, now is seeking to be acquired, the system's chief executive officer told employees last week.
The system, parent of 545-bed Baptist Hospital in Nashville, has been in ongoing discussions with healthcare systems in the area that could result in a sale or partnership, Erie Chapman, the system's top executive, said in a written statement.
"Whether a transaction ends up as a technical sale is not nearly as important as the protection of our mission through the power of a new partnership for better patient care," Chapman said in the statement. "A decision could come soon or could take months. If a decision is announced soon, it will be the announcement of an engagement, not a marriage. We have a way to go yet."
Although officials at the not-for-profit hospital would not comment beyond Chapman's statement, nearby Vanderbilt University Medical Center, parent of 576-bed Vanderbilt University Hospital, has thrown its hat into the ring, said Vanderbilt spokesman Joel Lee.
"We've said we'd be interested in talking further about this, and Baptist has left the door open for us," he said. "We think there's a next step that will come."
Many of the two hospitals' clinical programs are complementary, Lee said.
Spokesmen at Nashville-based HCA-The Healthcare Co. and Santa Barbara, Calif.-based Tenet Healthcare Corp. would not speak specifically about whether they've talked to Baptist, but both said any deal would have to fit their broader strategies.
Baptist owns four hospitals, including one joint venture with St. Thomas Health Services, parent of Nashville's St. Thomas Hospital. The system has been in merger talks before, and rumors have swirled for years that it has been seeking a partner. In 1997, the CEOs of Baptist and St. Thomas Hospital resigned after failed merger talks between those two hospital systems. St. Thomas spokesman John Mays would not comment on any current talks with Baptist, but since the 1997 debacle, the hospital's financial situation has improved.
In the early to mid-1990s, however, it was Baptist doing the buying, acquiring two rural hospitals in 1995, one of which it has since sold. In addition to its Nashville flagship, it owns 52-bed Baptist DeKalb Hospital in Smithville, Tenn., 55-bed Baptist Hickman Community Hospital in Centerville, Tenn., and has a 50% ownership stake in 184-bed Middle Tennessee Medical Center in Murfreesboro, jointly owned by St. Thomas.
Chapman, who replaced 16-year CEO David Stringfield, has made an effort to pare down Baptist's nonhospital business ventures and eliminated numerous jobs during his two and a half years at the helm.
For the year ended June 30, 2000, Baptist Hospital reported a profit of $2.8 million on net patient revenue of $240 million, compared with a loss of $11.9 million in fiscal 1999, according to data from the hospital and Evanston, Ill.-based Solucient, a healthcare information company.