What’s next for Baptist Health-Brookwood merger?

Baptist Health System, which operates Shelby Baptist Medical Center in Alabaster, is in talks with the parent company of Brookwood Medical Center over forming a joint company. (File)

Baptist Health System, which operates Shelby Baptist Medical Center in Alabaster, is in talks with the parent company of Brookwood Medical Center over forming a joint company. (File)

By NEAL WAGNER / Managing Editor

ALABASTER – Baptist Health System likely will be operating alongside Brookwood Medical Center by late May or early June, and the combined company is looking to change the way it cares for its patients, the president of Shelby Baptist Medical Center said on Feb. 12.

During an address to the Alabaster-Pelham Rotary Club, Shelby Baptist President David Wilson said Baptist Health and Tenet Healthcare, Brookwood’s parent company, could begin talks as soon as March, and could begin operating as a locally managed joint company by early summer.

Baptist Health System signed a non-binding letter-of-intent in December 2014 with a subsidiary of the Tenet Healthcare Corporation to form the new jointly owned company.

If the agreement is finalized, it would unite Brookwood with the 252-bed Shelby Baptist, Citizens Baptist Medical Center, Princeton Baptist Medical Center, Walker Baptist Medical Center and 77 primary and specialty care clinics across central Alabama.

Because Federal Trade Commission still views Baptist Health and Brookwood as competitors, the two companies will not be able to have direct negotiations until the 90-day due diligence period following the letter of intent has passed.

Wilson said all current Baptist Health facilities will retain Baptist values and a Baptist branding after the merger. Wilson said he does not anticipate layoffs on the hospital level, but said there could be layoffs at the Baptist Health System corporate office.

“We have a third party that will study what the community thinks of us and thinks of Brookwood,” Wilson said. “They will look at the cultures of the two companies and make recommendations about how to best combine those two different cultures.”

Currently, hospitals are compensated based primarily on the volume of services they perform, Wilson said. The combined company is planning to work with insurance providers to put a greater emphasis on providing preventative wellness care to patients.

“The future is population health management. An insurance provider will say ‘We will pay you X amount of money to take care of this group,’” Wilson said. “Then, I think you will see a company not focused on sickness, but on how to keep you healthy and out of the hospital.”

Wilson also shared the ways Baptist Health will benefit from the merger with Tenet.

For decades, Baptist Health offered a pension program to its employees, which was frozen a little more than 10 years ago.

Baptist still owes about $100 million to the pension program, and has millions in outstanding bond debt. If the two companies merge, Tenet has agreed to pay off the debt and pension obligations.