Baylor Scott & White and Memorial Hermann intend to merge

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The boards of two massive not-for-profit healthcare systems with historic Texas Baptist connections signed a letter of intent to merge.

Baylor Scott & White Health and Memorial Hermann announced the planned merger Oct. 1.

Executives of the two healthcare systems emphasized both were founded as faith-based organizations and hold to similar missions and values.

James Hinton 200
Jim Hinton

“This is about two mission-driven organizations—both committed to making safe, high-quality healthcare more convenient and affordable—building something transformative together,” said Jim Hinton, chief executive officer of Baylor Scott & White Health. According to the letter of intent, Hinton will be CEO of the proposed combined system.

Chuck Stokes, president and CEO of Memorial Hermann, and Pete McCanna, president of Baylor Scott & White, will serve in the proposed office of the CEO.

The combined system will be governed by a unified board with an equal number of representatives from both organizations. Ross McKnight, current chair of the Baylor Scott & White Holdings board of trustees, initially will chair the combined system’s governing board. The Memorial Hermann board of directors will select the vice chair, who will become chair of the combined board at the end of McKnight’s two-year term.

Currently, messengers to the BGCT annual meeting select a portion of the boards of Baylor Scott & White Holdings and Baylor Scott & White-Hillcrest. In a phone interview, Hinton noted Baptists will be included in the combined board.

“Baylor Scott & White was founded as a Christian ministry more than 100 years ago. Ever since, it has advanced health and driven change in North and Central Texas,” McKnight said. “This proposed combination starts the next chapter in the legacies of service and innovation for both systems. It will not only make a positive difference in the lives of millions here; it will become a national model.”

‘Likeminded organizations’

During a news conference in Dallas, McKnight described the two healthcare systems as “very likeminded organizations” and he expected the combined organization to serve as “a national model” for non-profit healthcare systems.

He noted the two boards will devote four months to six months in due diligence, and the merged system will need to work through the regulatory process. He expressed hope a definitive agreement will be reached by the first quarter of 2019, and he named July 1 of next year as an ideal date for completion of the merger.

Together, the Baylor Scott & White and Memorial Hermann systems employ about 73,000 people in more than 30 Texas counties, with 68 hospital campuses.

In a phone interview, Hinton emphasized Baylor Scott & White’s commitment to its Christian mission, pointing to the Joel T. Allison Faith In Action Initiatives program to provide its employees volunteer opportunities, integrate faith communities with healthcare and provide humanitarian relief in times of natural disaster.

“The Faith In Action Initiatives are alive and well, and our employees give to the program generously,” he said.

Memorial Hermann Health Systems has a similar Faith in Practice program and promotes medical missions, Stokes added.

Deborah Cannon, chair of the Memorial Hermann Health System board of directors, also emphasized the Houston-based hospital system is “deeply committed to its roots” as a faith-based ministry. She pointed particularly to the system’s dedication to charitable care—serving people of all races, religions and ethnic groups “regardless of their ability to pay.”

Both Baylor Scott & White and Memorial Hermann also have thriving clinical pastoral education chaplaincy programs, executives from the two systems noted.

Texas Baptist roots

Memorial Hermann Health System was formed by the merger of the Southeast Texas-based Memorial and Hermann systems in the 1990s. Memorial Health System traced its beginnings to Baptist Sanatorium in downtown Houston.

Texas Baptists launched the hospital that became Baylor Health Care System in answer to a 1903 challenge by George W. Truett, legendary pastor of First Baptist Church of Dallas, who asked, “Is it not now time to begin the erection of a great humanitarian hospital, one to which men of all creeds and those of none may come with equal confidence?”

C.C. Slaughter, a cattle baron and Baptist layman, responded by making the first donation, and R.C. Buckner, founder of the orphan’s home that eventually grew into Buckner International, agreed to serve as first chairman of the board for the new Texas Baptist Memorial Sanitarium.

In 2013, the Dallas-based Baylor Health Care System merged with Temple-based Scott & White Healthcare System, and Baylor Health’s president, Joel Allison, became chief executive officer of the combined organization.

When Allison announced his plans to retire in 2013, Baylor Scott & White conducted a national search and named Hinton, president and CEO at Presbyterian Healthcare Service in Albuquerque, N.M. as his successor. Hinton became the first non-Baptist to lead the historically Baptist healthcare system.

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