Two already big Texas hospital systems are merging to form the largest nonprofit integrated delivery system in the state, and possibly the southwest.
Dallas-based Baylor Health Care System and Temple-based Scott & White Healthcare announced late Friday afternoon that both systems have signed a letter of intent to merge.
The new organization will be known as Baylor Scott & White Health, said Joel Allison, president and CEO of Baylor, who will also be CEO of the new organization. Scott & White's CEO, Robert Pryor, MD, will be COO of Baylor Scott & White Health.
Citing the future of healthcare, Allison said in a teleconference that the merger represents "two strong partners coming together truly creating a new model of healthcare delivery that really focuses on the patient, [on] population health management."
The deal will join together two of the most well-known hospital systems in Texas with Baylor dominating the north Texas market and Scott & White in central Texas.
Allison says the two healthcare systems have been in talks for a little over a year.
"What we realized is [we are] two very like-minded organizations. Like-minded in our commitment to our mission, our vision, our values, our commitment to patient care and to access to care for all," he said.
Baylor is the most preferred hospital in the 12-county Dallas-Fort Worth metropolitan area. It recently opened a $350 million cancer complex which includes a 467,000-square-foot outpatient facility and the area's first dedicated cancer hospital with 96 beds.
Scott & White is 126-year old physician-owned healthcare system. It has access to 12-hospitals, and with more than 1,100 physicians on staff, is one of the largest group practices in the country. Scott & White also runs a health plan with over 240,000 members.
The merger will result in the largest nonprofit system in Texas with:
- 42 hospitals
- 350 patient care sites
- 4,000 doctors
- 34,000 employees
Baylor Scott & White Health will be governed by one board made up of 28 members, with an even number representing each organization. Drayton McLane, Jr., will be the initial chairman of the board of Baylor Scott & White Health. The chair-elect is Jim Turner, who currently serves as chairman of the board of trustees for Baylor.
McLane has been chair of Scott & White's board of trustees for over 12 years, serving on the board there for a total of 26 years. He says the merger creates an opportunity to deliver healthcare to an area that was out of reach—Dallas-based Baylor is 121 miles north of Scott & White.
"We always wanted to be involved with a healthcare system that stretched over a wide geographical area, where you didn't have to get two or three hospital systems," said McLane.
Allison says the two organizations have had the opportunity to collaborate previously, which helped when the two broached possibly merging.
"We have worked together in the past [via] our association through The Healthcare Coalition of Texas. We are also the only two Texas systems that are part of the High Value Healthcare Collaborative that includes a small number of leading healthcare systems in the country, including Mayo Clinic and Intermountain Healthcare, UCLA Healthcare... some of the leading [hospitals] that are committed to quality," explained Allison.
For now, much of the hospitals' operations will remain separate including brands, foundations, and medical staff. However, Baylor and Scott & White will collaborate on medical education and research to attract physicians, research initiatives, and grants.
The next step is due diligence which will last well into next year. Until then, Baylor Scott & White Health will have two operating divisions: Baylor Health Care System and Scott & White Healthcare. The respective CEOS will remain in their same roles. The two operating divisions will eventually consolidate.
Allison says Baylor Scott & White Health will represent a new model of care for Texas and the nation.
"We are very excited about this opportunity. We think it's transformational as it relates to where healthcare is going. We want to be that model of what we believe will create value for the patients we serve," he said.
Jacqueline Fellows is a contributing writer at HealthLeaders Media.