By BECKY GILLETTE
Mississippi has seen two big mergers of late that affect tens of thousands of employees, customers and patients. Baptist Medical Center of Jackson and Baptist Memorial Health Care of Memphis merged May 1 creating one of the largest healthcare providers in the mid-South — Baptist Memorial Health Care. And Metropolitan Bank merged with one of the biggest banks in the state Renasant, July 1.
Baptist Memorial has 17 hospitals in Arkansas, Mississippi and Tennessee, and Mississippi Baptist has four hospitals in Mississippi. The new organization will have 18,000 employees.
What goes into mega mergers like this?
“A lot of work goes into it, but the most important thing is communication,” said Chris Anderson, vice president of Mississippi operations, Baptist Memorial Health Care. “Communicating effectively requires a lot of time and can be difficult because there are so many stakeholders involved — board leadership, staff, physicians and members of the community. It’s essential that you involve all the right people at the right time. So, it requires due diligence to make sure all parties are involved and that you don’t have any unanswered questions after you’ve made the decision to go through with the merger.”
Anderson said there are many benefits to their merger, but the ultimate goal is higher quality care and lower costs for each entity.
“As a large organization, you have greater resources that ultimately help you improve the efficiency and quality of care you provide in the community,” Anderson said. “That’s what our payers, customers and patients expect, and through this combination we can leverage our scale and resources to enhance the care we provide for both markets.”
It helps that both are Baptist hospitals.
“Anybody who has studied mergers and business combinations knows that the first lesson is if the cultures don’t fit, they will not be successful,” Anderson said. “Conversely, when you have cultures that align very tightly, it sets you up for success. What has made this a successful project from the first meeting I had with Jason Little (president and CEO of Baptist Memorial Health Care) to the signing of the documents in April was the fact that we had a shared mission. Our values are very similar. Our mission statement is almost identical. Our values and commitment to a Christian ministry were cornerstones that led us to become one entity.”
Anderson said they are not only both Baptist hospitals, they are also hospitals that share markets that fit together neatly like puzzle pieces. There wasn’t a big physical distance between where they were, but there was also no overlap in where they were.
“So that eliminated a lot of problems that exist in many mergers where you have overlapping markets or markets that don’t connect, and you have these awkward gaps that you’re not sure how to fill,” Anderson said. “We just fit together neatly — both culturally and geographically — and those were things that contributed to this being a successful merger.”
The two systems didn’t have the same electronic health records (EHR), but Mississippi Baptist had already made the decision to move to a new EHR. In fact, Anderson said their medical staff had decided Epic was the right tool for them prior to deciding to merge with Baptist Memorial.
For Renasant and Metropolitan, the primary advantage of the merger is the alignment of two like-minded organizations that can mutually benefit from each other’s strengths, said John Oxford, director of corporate communication for Renasant.
He said Metropolitan’s market share and presence in the Jackson, Memphis, Tenn., and Nashville, Tenn., helps Renasant to expand its client base and add dynamic banking talent.
“With Renasant, Metropolitan clients gain 170 plus locations and 2,200 seasoned banking associates at their service along with additional products and services, such as trust, wealth management and insurance, from Renasant,” Oxford said.
There are a lot of logistical challenges with any merger such as changing signage, notifying customers, etc. But Oxford said since Renasant has been through a dozen mergers and acquisitions since 2005, they have a well-honed process in place to try and minimize any impact on both their current and new clients.
“Both organizations have well-defined roles and responsibilities during the merger,” Oxford said. “It takes the full attention of associates on both sides, and especially in the markets with banking locations being impacted, to be involved and work together to minimize any disruption to everyday business, as well as making sure each client experience continues to be a great one.”
There is a risk some customers won’t be pleased by a merger. But Oxford said it has been their experience that most clients are very understanding in knowing that when a merger takes place, there is a transition period.
“Most concerns during mergers are around debit card and check usage, as well as online banking and passwords for their accounts,” Oxford said. “Although no banking transition is perfect, through proper planning, maintaining good communication and using past experience as a guide, we are able to hopefully provide a near seamless experience as we welcome our new clients to the Renasant family.”
Oxford said coming out of the “great recession” there was a trend for banks to merge due to the increased regulatory burden brought on by Dodd-Frank banking laws coupled with the negative economic impact of the recession forcing some banks to fail and others to sell to avoid potential failure.
“Today, as the economy has greatly improved, that trend has lessened,” Oxford said. “Although the increased regulatory burden is still very much an issue, most mergers, such as ours between Renasant and Metropolitan, are between two strong organizations that want to increase their market share, improve their ability to serve their clients and increase long-term value for their shareholders.”