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Baylor and Scott & White propose merger to create a $7.7B organization

One of Texas’ largest health systems is getting larger. Scott & White Healthcare and Dallas-based Baylor Health Care System announced late on Dec. 14 that they have signed an agreement to merge, creating a $7.7 billion organization.

[See also: Healthcare M&A dips in Q3 2012 but is not cause for panic]

The press release announcing the merger said the new system, Baylor Scott & White Health, will be “engineered to meet the demands of healthcare reform, the changing needs of patients and payers and the extraordinary advances in clinical care.”

The merged systems will include 42 hospitals, more than 350 patient care sites, 4,000-plus active physicians, 34,000 employees and the Scott & White Health Plan. The new system, the press release noted, “would be the largest not-for-profit health system in Texas and one of the largest in the United States.”

Baylor Scott & White Health will be governed by a single board with equal representation from both organizations. Joel Allison, president and CEO of Baylor Health Care System, will serve as CEO of the new company, and Robert Pryor, MD, president and CEO of Scott & White Healthcare, will serve as president and chief operating officer. Drayton McLane, Jr., chair of Scott & White’s Board of Trustees, will serve as chair of the new company’s board and Jim Turner, chair of Baylor’s Board of Trustees will serve as chair-elect.

[See also: Most hospital M&A transactions are financially unsuccessful, study says]

“This partnership is the right thing for Baylor. It’s the right thing for Scott & White. And, it’s the right thing for our communities,” said Drayton McLane, Jr. chair of the Scott & White Board of Trustees, in the press release announcing the proposed merger. “Both health systems are well-organized, well-run, best-in-class organizations. We can learn from each other, and I think this only benefits the patients we serve by allowing us to deliver better quality care and increased access to care.”

“Together, our two health systems will cover two geographically diverse areas that are nearly contiguous and highly complementary,” said Jim Turner, chair of the Baylor Health Care System Board of Trustees, said in the same press release. “We strongly believe our neighboring geographies will allow us to be well-positioned to lead the transformation of healthcare in Texas and beyond.”

According to the press release, each organization will retain their individual brand names, their foundations will remain separate and their medical staffs will remain independent.

A definitive agreement is expected to be completed some time in 2013.

 

 

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