The Deal's Off: Baylor, Memorial Hermann Opt to Skip Merger
By Sean Price

Baylor_Hermann

Many health care companies have merged in recent years, but nothing symbolized the high-dollar, high-stakes nature of the trend like the proposed $14 billion merger of Texas health care giants Baylor Scott & White Health in Dallas and Memorial Hermann Health System in Houston.

But then officials from both health care systems abruptly called off the deal today.

"Ultimately, we have concluded that as strong, successful organizations, we are capable of achieving our visions for the future without merging at this time," the nonprofit organizations said in a joint statement.

Together, the two systems provide services in more than 30 Texas counties and employ more than 73,000 people, according to data released by Memorial Hermann.

Though this deal has been called off, health care mergers in general – both large and small – have been rising, according to several sources quoted in the February cover story of Texas Medicine magazine.

In 2017, there were 967 merger and acquisition deals in the health care industry nationwide, according to the PwC Health Research Institute. By 2018’s second quarter, the deal volume was up 9.4 percent. Overall, health care has had 15 consecutive quarters in which more than 200 deals were announced, PwC reported. Other data from Irving Levin Associates shows the pace of hospital mergers keeps accelerating.

Despite today's announcement, Memorial Hermann is still looking for opportunities to expand, according to an internal memo to its physicians that the Texas Medical Association obtained.

"While this merger will not move forward, we will continue to seek smart growth, strategic partnerships, and other collaborative opportunities that will accelerate our vision for the communities we serve," the memo said.

Photo: Memorial Hermann

Last Updated On

March 12, 2019

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Sean Price

Reporter

(512) 370-1392

Sean Price is a reporter for Texas Medicine and Texas Medicine Today. He grew up in Fort Worth and graduated from the University of Texas at Austin. He's worked as an award-winning writer and editor for a variety of national magazine, book, and website publishers in New York and Washington. He's also helped produce Texas-based marketing campaigns designed to promote public health. Sean lives in Austin and enjoys hiking, photography, and spending time with his wife and two sons.

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