News Releases

Hermann and Memorial Merger Completed

Houston, Texas, November 4, 1997 -- Memorial Healthcare System and Hermann Healthcare System announced November 4 that they completed the legal closing on the merger of the two organizations. The new corporation, Memorial Hermann Healthcare System is the largest not-for-profit health care system in Southeast Texas and one of the largest in the country. George R. Farris, chairman of the new Memorial Hermann Healthcare System Board of Directors, said while this is a good move for both organizations, the community stands to gain the most. "As not-for-profit organizations, these systems are truly owned by the community. This merger brings together significant community assets to be used in a more effective and efficient manner for the betterment of all the community."

Memorial Hermann Healthcare System will consist of ten hospitals, including a level one Trauma Center; 150-bed, full-service children’s hospital; Hermann Life Flight air ambulance service; 53 outpatient service sites; two long-term nursing facilities; a retirement community, and other subsidiaries including a home health care company, a managed care company, and physician practice corporation. "Bringing these two systems together will create a more comprehensive system offering Houstonians the best of both worlds," said David R. Page, president and CEO of Hermann Hospital. "The system offers geographic convenience of compassionate, high quality care at full-service Memorial hospitals throughout Houston and access to the highly specialized services provided by Hermann such as state-of-the-art trauma and pediatric care, organ transplantation, the burn unit and Hermann Life Flight."

Hermann Hospital currently serves as the teaching hospital for The University of Texas-Houston Medical School. Hermann will retain this affiliation.

The integration of the two systems has already begun and will take several months to complete. "We want to make this transition as smooth as possible," said Page. "We don’t expect it to have any impact on direct patient care."

One of the major benefits to this transaction will be the opportunity for cost reduction. Together the two systems can create new efficiencies and economies of scale. "We have already done a good job internally of bringing our costs down and this consolidation presents additional opportunities which ultimately result in savings to the community," said Dan S. Wilford, president and CEO, Memorial Hermann Healthcare System.

This merger brings together two institutions with long commitments to the community. The Hermann Healthcare System originated with the opening of Hermann Hospital in 1925, as a beneficiary of the will of philanthropist George H. Hermann. Memorial’s roots go back even further with the founding of the Baptist Sanitarium in 1907. Over the years both organizations have continued to serve the health care needs of all Houstonians. "Memorial and Hermann have long histories of providing service and charity care to the community. Not only will this continue, but the combining of our resources will allow us to support the community even more," said Melinda H. Perrin, vice-chairman, Memorial Hermann Healthcare System Board of Directors.

While initial discussions for the merger began more than a year ago, a letter of intent to merge was signed July 3. State and federal regulatory agencies reviewed the plans over the course of several months while both organizations completed due diligence procedures culminating in an Agreement and Plan for Merger. The governing boards of the two organizations approved this plan in early October. Harris County Probate Judge William C. McCullouch, who approved the transition of the assets of the Hermann will into a not-for-profit corporation enabling the transaction to be completed, also approved the plan.

"This deal was made possible through the hard work of a lot of individuals," said Page. "We are grateful for the support we have received across the community as we put this merger together." According to Wilford, shared ideology made it possible. "Because both organizations are committed to the community, have similar purposes and values, and dedicated board members who put the best interest of the community ahead of everything else, we were able to get this deal done in a relatively short period of time."

Wilford will be president and chief executive officer of the Memorial Hermann Healthcare System and Page will serve as chief operating officer. Page will also serve as president of the Memorial Hermann Hospital System, the operating company for Hermann Hospital, Hermann Children’s Hospital and the eight Memorial hospitals. All of the Memorial and Hermann facilities will retain their respective names.

A 12-member board of directors will govern the new system, a not-for-profit corporation, five from each of the current Memorial and Hermann boards, and Wilford and Page. Farris will serve as board chairman and Perrin will serve as board vice-chairman. Other governing boards have been appointed to oversee the operation of subsidiaries within the Memorial Hermann Healthcare System. These subsidiaries include the hospital system; Memorial Hermann Foundation; Memorial Hermann Affiliated Services and Memorial Hermann Health Ventures.

The Memorial©Sisters of Charity Health network, a joint venture between Memorial Healthcare System and Sisters of Charity of the Incarnate Word Health Care System will continue to operate. Other partnerships with not-for-profit organizations, including additions to the Memorial Hermann Healthcare System are possible in the future.

For more information, contact Media Relations.