Impact uncertain after Baptist Hospital merger

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Mississippi Baptist Health Systems of Jackson

Baptist Memorial Health Care of Memphis and Mississippi Baptist Health Systems of Jackson have completed their merger, creating the largest health care provider in the Mid-South, officials for both hospital systems confirmed Monday.

The combined health care system, which will fall under the Baptist Memorial name, will encompass 21 hospitals in Mississippi, Tennessee and Arkansas. Baptist Memorial currently operates 17 hospitals with plans to open an 18th this year, while the Mississippi Baptist network has four.

“This merger will have a significant impact on health care and our communities,” said Jason Little, CEO of Baptist Memorial, in a statement. “By combining our resources, we can invest more heavily in our team members, facilities and equipment, which will result in greater access to new technologies, best practices and medical specialists.”

But just what that impact will be on the combined 16,000 employees of the two systems, particularly the much smaller Mississippi Baptist, remains unclear.

When asked whether he anticipated layoffs, Little sidestepped during a call Monday, saying, “We’re focused on our team and the career development opportunities that exist within the merger.”

Jason Little, CEO of Baptist Memorial Health Care of Memphis, left, and Chris Anderson, CEO of Mississippi Baptist Health Systems of Jackson

“All the administrative executives with Mississippi Baptist will stay in their roles and will continue to operate the way they have been,” Little said. “We obviously are working as a part of this merger to take the best of both organizations.”

While Little will retain his position as CEO of Baptist Memorial, the role of Chris Anderson, who has been CEO of Mississippi Baptist is less defined.

On Monday’s call, Little praised Anderson as a “tremendous leader” in health care in Jackson, “so he will have a role in our Mississippi hospitals, not only here in the Jackson area but across the state of Mississippi.”

Neither Little nor Anderson said whether Baptist Medical Center in Jackson, currently the hub in Mississippi Baptist’s four-hospital system, would retain its central role in the state or if high risk procedures would now more likely be diverted to Baptist Memorial Hospital in Memphis.

But Anderson said that he expected the impact on the individual hospitals to be minimal because none operates in the same community.

“I think one of the things that’s important to recognize is that there’s no geographic overlap between the two systems, so as a result of that you avoid some of the challenges that people face as they merge,” Anderson said. “Because there’s no overlap, there’s no close of services or jobs that you lose in a merger.”

Mississippi Baptist certainly comes to the merger from more of a disadvantage. Last March, credit rating agency Fitch Ratings revised its outlook for the system, downgrading it from “stable” to “negative,” a decision it said was driven by “MBHS’s failure to stem the sizable operating losses of the last three years.”

Fitch Ratings also noted that Mississippi Baptist’s operations failed to meet budget in fiscal 2015, with a $23.4 million operating loss. One of the biggest problems has been the hospital’s current electronic health record system, which it called a “barrier” to efficiency, adding to the time that patients spent at the hospital.

Baptist Memorial Health Care of Memphis

As part of the merger, Baptist Memorial’s Epic Electronic Health Records System will be installed in all Mississippi Baptist hospitals and clinics. The new system is expected to be live by February 2018.

Little said that Baptist Memorial, post-merger, will be financially robust, with combined revenues of $2.5 billion in 2018. He said he expects the 10 Mississippi hospitals in the system will have revenues between $1.1 and $1.2 billion. These include not just the four Mississippi Baptist hospitals but also six Baptist Memorial hospitals already in Mississippi.

“As we look forward to an increasingly competitive health care industry we’re seeing around the country that scale makes a big difference. It allows you to spread investments … over 22 hospitals instead of four producing a lot of economic benefit. And we think this will be a strengthening for us,” Anderson said.

Although they historically have operated independently of one another, Baptist Memorial and Mississippi Baptist were founded within one year of each other, in 1912 and 1911, respectively, and both retain strong ties to the Southern Baptist Convention. This shared history, Anderson said, makes the merger particularly advantageous for both organizations.

“There’s the absence of a disadvantage that might exist if we’re talking to any other partner,” Anderson said. “We found a partner that’s committed to the same Christian values that our organization has held dear for its entire 100 year history.”