While some see a possible 'behemoth to rival HCA,' the prospective CEO of the combined nonprofit organization downplays the competitive edge and says he plans to play nice with payers.

Two of the largest nonprofit health systems in Texas announced Monday that they have signed a letter of intent to merge their operations into a single entity as soon as next year.

The planned combination of Dallas-based Baylor Scott & White Health with Houston-based Memorial Hermann Health System would form a 68-hospital system, making it the largest in Texas and among the largest nationwide, with annual revenue in excess of $14 billion.

Although each of the nonprofit systems dominates its metro market, the Nashville-based for-profit hospital chain HCA Healthcare has been gaining ground on Memorial Herman, buying a total of six Houston-area hospitals since last year. The nonprofits' proposed tie-up shouldn't be seen, however, as an effort to keep HCA or any other hospital chain at bay, said Baylor Scott & White CEO Jim Hinton, who will be CEO of the proposed combined entity.

"I can't recall a single time that using this opportunity as a means to target a competitor has ever come up. I think this has strictly been about how can we deepen the quality of service to our existing communities and bring some new capabilities to play," Hinton told HealthLeaders. "The word 'domination' isn't in the vocabulary."

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Photo by Felix Mittermeier via Unsplash.