Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
October 01, 2018 01:00 AM

Baylor Scott & White, Memorial Hermann sign letter of intent to merge

Alex Kacik
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Jim Hinton, CEO of Baylor Scott & White Health

    Dallas-based Baylor Scott & White Health and Houston-based Memorial Hermann Health System have signed a letter of intent to merge, the organizations announced Monday.

    The combined not-for-profit entity would have 68 hospitals, two health plans and around $14.4 billion in revenue. Its footprint would include more than 1,100 care delivery sites, about 73,000 employees and nearly 14,000 employed, independent and academic physicians.

    "As the whole field is in the midst of a transformation related to a combination of cost issues and technology disruption, our boards got together and talked about how to come together in a more structural way rather than just sharing best practices," said Jim Hinton, CEO of Baylor Scott & White.

    Together, Baylor Scott & White and Memorial Hermann could expand their academic arms related to research and medical training and accelerate the implementation of new technology, said Chuck Stokes, president and CEO of Memorial Hermann.

    "There is a lot of synergy and opportunity to do things in a different way," Stokes said. "When we are independent of each other, it is harder to do that."

    While executives argue that scale will drive down costs and improve care, economists and policy experts contend more market share often leads to higher prices and consolidation does not necessarily produce better outcomes.

    Hinton would be the CEO of the combined system. His office of the CEO would include Stokes and Baylor Scott & White President Pete McCanna.

    The board would be equally split between Baylor Scott & White and Memorial Hermann. Ross McKnight, the current chair of Baylor Scott & White's board, would also chair the combined system's board. A vice chair, selected by the Memorial Hermann board before the deal closes, would replace McKnight after his two-year term. The merged company would have executive and support staff based in Austin, Dallas, Houston and Temple.

    The combined entity would operate under a new name, although Baylor Scott & White and Memorial Hermann facilities would maintain their brands in their respective markets. The organizations expect to reach a definitive agreement in early 2019 and finalize the merger by midyear. The deal needs approval from the Federal Trade Commission and state attorney general.

    Baylor Scott & White reported $291.9 million in operating income on revenue of $9.09 billion in 2017, down from $494.2 million in operating income on $8.37 billion of revenue in 2016. The health system's operating income of $494 million in the first nine months of fiscal 2018 was up 44.2% from the same period in 2017.

    Memorial Hermann reported $70.6 million in operating income on revenue of $5.06 billion in 2017, down from $225 million in operating income on revenue of $4.89 billion the year prior. But in 2018, Memorial Hermann's unaudited operating income improved to $128.7 million on revenue of $5.26 billion.

    Texas is one of the fastest-growing markets in the country, although a declining oil and gas market has dampened the area's economy.

    About 17% of Texas' population is uninsured, translating to 4.8 million people, which is one of the largest shares in the country, Stokes said.

    Memorial Hermann has reached capacity in some of its facilities, he said. It has also flattened the management structure over the last 18 months, which will serve it well going forward, Stokes said.

    "We are the safety net organization for the Houston market, just like Baylor, Scott & White is for Dallas," he said. "We have to figure out how we can continue to strengthen our communities so we can be true to our mission."

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Screen Shot 2023-02-01 at 4.02.50 PM.png
    Cancer Treatment Centers of America completes City of Hope rebrand
    rural-health1.png
    Transgender patients in rural states struggle to find doctors
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing