Leaders from two of Texas’ largest not-for-profit health systems announced Oct. 1 plans to merge and form a consolidated health system serving over 30 Texas counties in the Austin, Dallas and Houston areas.
Baylor Scott & White Health and Memorial Hermann Health System leaders hosted a press conference in Dallas on Oct. 1 to discuss the systems’ letter of intent followed by an exclusive phone conversation with Community Impact Newspaper.
Jim Hinton, CEO of Baylor Scott & White Health, Chuck Stokes, president and CEO of Memorial Hermann Health System, Deborah Cannon, chair of the Memorial Hermann Health System Board of Directors and Ross McKnight, chair of the Baylor Scott & White Holdings Board of Trustees answered questions about how the merge will affect current and future employees, patients and Texas residents, including those enrolled in or interesting in enrolling in the two system’s health insurance plans.
Will there be a central headquarters?
Cannon: We will have executive and support staff in Austin, Dallas, Houston and Temple.
Will there be any closings of facilities or layoffs?
Cannon: Today we do not overlap. We are in contiguous regions but we don’t overlap. We’re not looking at closing facilities. When we talk about efficiencies that immediately leads people to ask, ‘are there going to be layoffs?’ Right now we have combined between us, almost 5,000 open positions so we’re not looking at this as we’re going to cut a bunch of staff. We are going to continue to hire more and more staff.
Hinton: The only thing that has been announced is the letter of intent. The two organizations can’t jointly plan or do anything until we have a definitive agreement and a close date. Both organizations will be operating business-as-usual for each of them, which includes investments. If you see one of us make a move somewhere it has nothing to do with the merger for at least eight or nine months.
Do you have any plans to consolidate health plans to avoid overlapping insurance coverage or to streamline the process between the two systems?
Hinton: As we go into due diligence, the Memorial Hermann leadership will have a chance to learn more about Baylor Scott & White Health Plan and vice versa. So we really don’t know other than what’s publicly available how their plan is doing and I think they’re in the same position relative to ours. Once we have explored that, we will have some better ideas about how we might want proceed but I would predict that we will want to continue to be in the health plan business and look for ways to really add some unique value through the health plans.
Prior to the letter of intent, was the option to consolidate health insurance plans seen as a potential advantage of this merger or an option to look at?
Hinton: We’re going to look at any opportunities that drive down costs and improve quality and the payers that we each work with individually today know that we are on that path. Once we get together, we will be able to have a different kind of discussion with them. Then the question is, ‘what’s the role of our own health plan in achieving that [goal]?’
During the upcoming open-enrollment period starting Nov. 1, any changes people see in the way that they sign up for plans or re-sign up for plans will not be based on this decision specifically. Is that correct?
Cannon: Yes, that is correct.
One of the goals in the letter of intent is to make the cost of care more affordable. Do you have any specific ideas that you will be able to implement moving forward?
Cannon: Technology is going to play a bigger and bigger role in delivering health care so we see that as an ability to both improve quality and improve accessibility as well as cost. Coming together, we have the ability to really be innovative in that space.
Stokes: For a specific example, we have several hundred patients that are congestive heart failure patients and they are on a technology called Vivify. We can manage the in-home environment so that they are not continuously bouncing back and forth between our ER or having to be hospitalized. We can actually use this technology in the home to see them getting in trouble before they actually land in the ER or some of the more expensive aspects of our care. That’s an example of how to embrace technology moving from keeping patients out of the most expensive parts of the system which is the in-patient and actually keeping them out in the out-patient arena and caring for them in the home. With chronic disease patients in the aging population, one of the biggest concerns we have across the country is bringing cost-effective care to that population. These are examples that I think we can accelerate. We both use these types of technologies but working together with our medical staffs is an opportunity to accelerate those types of programs.