Baylor Health Care and Scott & White Healthcare Agree to Merge

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Dallas-based Baylor Health Care System and Temple-based Scott & White Healthcare have signed a letter of intent to merge, forming a $7.7 billion health system, named Baylor Scott & White Health. The new organization will include a combined 42 hospitals, with over 350 patient care sites, more than 4,000 active physicians, 34,000 employees and the Scott & White Health Plan. The merger makes Baylor Scott & White Health the largest not-for-profit health system in Texas and one of the largest in the United States.

A single board with equal representation from both founding members will govern the organization. Baylor Scott & White Health will be led by a single executive leadership team, with Joel Allison as chief executive officer and Dr. Robert Pryor as president and chief operating officer. There will be two operating divisions, which will consolidate over time. Branding and staff will remain independent of each other.

The two organizations have entered a period of exclusive negotiations and due diligence following the approval of agreement of intent. They expect a definitive agreement to be completed in 2013.

Declining reimbursement, value-based care, and strong information management have made hospital partnerships, mergers, and other joint ventures more popular. Since 2008, there have been 274 mergers and acquisition transactions affecting 439 hospitals, up nearly 22% over the previous four-year span, according to the press release.