Baylor Scott & White and Memorial Hermann Plan to Merge, Creating Largest Health System in Texas

by John Nelson

DALLAS AND HOUSTON — The boards of not-for-profit health systems Baylor Scott & White Health and Memorial Hermann Health System have signed a letter of intent to merge operations. Together the two health systems own or have a stake in 68 hospitals and 1,100 care delivery sites in 30 Texas counties.

The systems also record nearly 10 million annual “patient encounters” and employ approximately 73,000 people, including 14,000 physicians.

According to The Wall Street Journal, the combined health system would be among the largest in the U.S. by number of hospitals and would generate more than $14 billion in annual revenue.

As per the merger agreement, the board of the combined company will comprise an equal number of appointees from both organizations. Jim Hinton, CEO of Baylor Scott & White, will be the CEO of the proposed combined system and will be joined in the proposed office of the CEO by Chuck Stokes, president and CEO of Memorial Hermann, and Pete McCanna, president of Baylor Scott & White.

The boards of Memorial Hermann Health System and Baylor Scott & White Health have signed an LOI to join operations.

“This is about two mission-driven organizations — both committed to making safe, high-quality healthcare more convenient and affordable — building something transformative together,” says Hinton.

“Through this combined system, we have a unique opportunity to reinvent healthcare and make a profound difference in the lives of millions of Texans,” says Stokes.

The combined system would have executive and support staff based in Austin, Dallas, Houston and Temple. The proposed combined system will operate under a new name to be determined before closing, but the two systems will continue to operate under their brands in their respective service areas.

Dallas-based Baylor Scott & White and Houston-based Memorial Hermann have entered into a period of exclusive negotiations, due diligence and the standard regulatory review processes. The next stage in the transaction, a definitive merger agreement, is anticipated to be complete next year.

— John Nelson

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