Texas Hospital Merger Provides Cost Savings, Cushion for Insurance Upheaval

Two of Texas’ biggest nonprofit hospital chains have announced plans for a merger that would lead to one of the largest hospital systems in the country. The merger of Houston-based Memorial Hermann Health System and Dallas-based Baylor Scott & White Health would create a 68-hospital system that would reach much of Texas.

“Mergers like this offer opportunities from a business standpoint for the entire state, with little downside from an antitrust perspective,” said Dallas health care lawyer Jeff Drummond of Jackson Walker LLP, who represents hospitals, doctors and other providers. “Earlier Baylor merged with Scott & White and that seems to have worked out really well. In both these cases, there is no geographic overlap so there wouldn’t seem to be an antitrust problem from that perspective.

“One of the benefits is that this union would cushion these health care systems from potential market upheaval. The two hospital systems should be able to lower their costs by sharing data, standardizing purchases and services, and by taking other measures. If there is a collapse in insurance markets because the Affordable Care Act gets removed and the exchange market disappears, the hit would be lessened.”

For more information contact Kit Frieden at 800-559-4534 or kit@androvett.com.

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