Baylor Scott & White and Memorial Hermann scrap merger plans

Last fall, the two Texas healthcare giants signed a letter of intent to form a new health system, which had not yet been named.

A businessman swings a sledgehammer at a land bridge connecting two cliffs as he tries to chip away at the metaphorical agreement represented by the bridge formed in the shape of a handshake.

Baylor Scott & White Health in Dallas and Memorial Hermann Health System in Houston have canceled their plans to merge.

On February 5, a joint statement announcing the news was posted on both organizations’ websites. It reads:

After months of thoughtful exploration, we have decided to discontinue talks of a merger between our two systems. Ultimately, we have concluded that as strong, successful organizations, we are capable of achieving our visions for the future without merging at this time. We have a tremendous amount of respect for each other and remain committed to strengthening our communities, advancing the health of Texans and transforming the delivery of care. We will continue to seek opportunities for collaboration as two forward-thinking, mission-driven organizations.

The Houston Business Journal also obtained an internal memo sent to employees.

“Our goal was never about getting bigger,” Memorial Hermann president and CEO Chuck Stokes said in the memo. “Our goal is to create a model for integrated, consumer-centric, cost-effective care, and I am confident in Memorial Hermann’s ability to accelerate and achieve this effort.”

Last fall, the Texas systems signed a letter of intent to form a new health system, which had not yet been named. However, both organizations intended to keep operating under their own brands in their respective service areas.

Had the deal gone through, the new system would have included 68 hospitals, more than 1,100 care delivery sites, two health plans and almost 14,000 employed, academic and independent physicians.

Photo: DNY59, Getty Images