Baptist Health System (BHS) in Birmingham was expected to receive permission to explore a new partnership with Tenet Healthcare of Dallas, owner of Brookwood Medical Center in Birmingham. At press time the approval vote was scheduled for Dec. 15 during an executive session of the Birmingham Baptist Association (BBA) executive board. BBA is the parent body of BHS.
The BBA executive board was asked to allow BHS to sign a formal letter of intent to merge BHS with Brookwood. The BHS board of directors unanimously voted on Dec. 8 to approve signing the letter of intent.
Keith Parrott, BHS president, said the new company would have the largest primary care physicians network in the greater Birmingham market and would increase the strategic viability of both organizations.
Baptist culture, values
The new company will continue the Baptist name, culture and values, he said. Baptist religious directives will be honored and a chaplaincy program will continue at all hospitals.
A board of directors will be created to oversee the new company with representatives from BHS and Tenet.
Parrott said BHS did not have to merge but needed a ministry partner to better position itself in the Birmingham market. The BHS board of directors explored several options before settling on a partnership with Tenet.
The proposed option allows BHS to fully fund its pension obligations, pay off all its debt, secure significant funds for capital needs while preserving the Baptist name and heritage of doing health care with a spiritual component. The mission statement for the new company will honor Jesus Christ, Parrott confirmed.
The new company is roughly based on a model Tenet uses in San Antonio, Texas, where Tenet partnered with a Baptist hospital system a few years ago. Parrott said he and BHS board members visited and thoroughly investigated that arrangement and found it operated as a traditional faith-based hospital.
That study caused BHS to move from skepticism about partnering with a publically traded company to embracing the idea, Parrott added.
Tenet Healthcare currently operates 80 acute care hospitals in 14 states. In 2013 the company reported $11.1 billion in revenue and $16.1 billion in assets.
Parrot said the due diligence study will begin immediately after signing the nonbinding letter of intent. Approval of a final agreement could come as soon as March.
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