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Sniders Letter

March 21, 1997

(Editor's Note: Letter to Randy Fields, Baylor regent chairman, from regent Ted Snider. This letter appeared on the Baylor Alumni Association's Interactive web page on Thursday.)

March 9, 1997

Mr. Randy Fields

Chairman

Board of Regents

Baylor University

Waco, Texas

Dear Randy,

We have perhaps the greatest opportunity in the history of Baylor University to place the University and the Hospital on the most solid financial foundation conceivable while securing and enhancing the future mission and viability of both institutions.

All of this can be accomplished at no cost to the community or the university through the investment of millions of dollars into the hospital by private enterprise. Contrary to the outcry of the uninformed, this will strengthen both institutions and sacrifice nothing. To say that a for-profit institution is somehow un-Christian is inconsistent with biblical principles and a gross insult to the many Christian professionals and businessmen who have built these institutions and for that matter, this country. The Regents are charged with the stewardship of the University's reputation and assets. For us to allow anyone to impugn the University without response and to appropriate the University's assets without defense would be a gross dereliction of our duty. We must uphold our responsibility regardless of how maliciously we may be attacked by those who would have us shirk our responsibilities. In no case should we hasten to a decision without fully considering all the ramifications and seeking the input of the constituents of the University. Given access to the full story, I am convinced these constituents will reach a consensus that is fair, honorable, consistent with our principles and mission and satisfactory to all who share these principles.

It is apparent that the public is hearing only one perspective on the future of the Baylor Health Care System. Our agreement not to speak to the media has stifled the University position and allowed the BHCS to have its position verbalized repeatedly by those not bound by the media agreement. This is obviously apparent to BHCS, and I would hope they would see the unfairness of it and admit it. No one is speaking out for the University. The DALLAS MORNING NEWS and other newspapers should take it upon themselves to balance the reports in the interest of fair and impartial journalism. For some reason, they are not doing so. It is also grossly unfair to the thousands of University alumni and families, students and families, churches, prospective students and families, faculty, and Baptists everywhere who have a vested interest in the outcome. They are certainly entitled to know all of the facts.

Most of the reactions I have seen in the letters I have received and the press reports I have read obviously stem from gross ignorance of the current status and the future of the health care industry in this country. It is difficult to understand all the motivations of those who have been so vehement, vicious and vocal. I know many of them are from sincere hearts who have a deep concern for a healing ministry, but who are woefully lacking in knowledge and understanding.

The ultimate end is that Dallas can have BHCS with all its attributes: charitable medical service to the needy; evangelism through the work of the chaplains, administration, medical staff, volunteers, and dedicated caregivers; state-of-the-art medical care and equipment, and the financial strength to maintain its leadership. A well managed, financially strong medical facility can provide medical care the equal of which Dallas has never seen, be it for-profit or not-for profit.

There is an implicit message from our critics that making a profit is un-Christian. One does not have to look far to find the word 'profit' in the gospels and it is not deemed negative. Indeed, the many Christian business people who have contributed to Baylor would take strong exception to the very idea, and for very good reason. Being for-profit and having a Christian mission are not mutually exclusive. In fact, there are many examples of for-profit enterprise in the medical field.

This country has the finest drug research in the world, all produced by companies which must make a profit to fund it. These drug companies have made possible drugs and medications that are in themselves miraculous: pain alleviating, health restoring, and life-saving. The people who benefit from all this do not denigrate nor resent these for-profit companies. We have bio-technology companies who have developed unbelievable diagnostic and treatment devices of all kinds, for the express purpose of healing the sick. They all make a profit and pay a return on the investment of the stockholders, and nobody complains. We are just fortunate and glad that there are business leaders who have the vision to raise the capital, make the investment, hire the talent and make it happen.

Then there is the insurance industry, all funded by investors and led by business people who make it possible for us to have medical insurance for ourselves and our families. We don't hold them up to ridicule for making this available to us, or for paying a return to its investors. We appreciate what they do, and gladly accept generous gifts from them out of the fortunes they made in the insurance business.

We don't resent and belittle the banks who loan money at a fair profit to people so they can pay their medical bills. We want them to be profitable, strong and safe for our deposits, build huge buildings, be community leaders and contribute in so many generous ways to their communities. What would our cities, large and small, be without strong, profitable banks?

We have some of the finest and best trained doctors in the world, and they all work for a profit, for big homes, lucrative investments and luxuries largely unavailable to the average citizen, but they are not condemned for it. They spent years and years of very hard work learning and practicing to heal the sick. They deserve to do well. They have earned it. We are grateful for them and their talents and dedication. They are not un-Christian because they make high salaries and are among the highest paid professionals. It is acceptable to render a healing service and make a profit. There would not be so many independent medical clinics of all kinds scattered conveniently throughout our neighborhoods without doctors who are willing to invest and take a risk because there is a fair and deserved profit in it when well managed.

Think of the small towns and rural communities which would not have a modern well-equipped hospital if some for-profit organization had not had the vision and resources to do it. Think of the small hospitals that were hopelessly in debt and about to close that have been saved by for-profit companies who are willing and able to provide the management and money to rescue them. Those communities don't condemn those companies. They are appropriately grateful to them. They are not impressed by the naysayers who cry out that making a profit on excellent medical care is unholy, mean, uncaring, un-Christian, unthinkable.

All hospitals, whether for-profit or non-profit, must maintain income greater than expenses if they are to continue to exist and carry out their mission. Profit is not evil. In the parable of the three stewards, the stewards who invested for profit were commended, whereas the one who merely safeguarded the asset was condemned as wicked and lazy. One can only speculate what condemnation would be in store for him had he lost the asset altogether.

The fact of the matter is that all hospitals have to make a profit, whether they call it 'profit' or 'the excess of income over expenses.' It is true that the for-profits have to be better managed. They don't have the luxury of not making a return on investment or having philanthropists supplement their funding. It is true that this is much harder to do, more challenging and demanding. It is true that it takes some hard decisions, some unpopular actions, some excellent management. However, it is happening all over the country. It is happening because too many (but of course not all) of the not-for-profit hospital boards did not have the foresight, did not do their homework and see the coming changes in managed care, did not keep up with what is happening in the industry, did not get the needed professional consultants, did not hire competent management, did not provide the necessary funding, did not recruit the medical staff, and did not provide for a steady flow of patients into their hospitals.

There are only two sources of patients: doctors and third-party payers (insurance companies). The hospitals which do not control the flow of patients through owned medical practices (clinics), and managed care companies are not going to survive.

The managed care companies who cover thousands of lives are dictating where their insureds go for medical care: the doctors, the pharmacies and the hospitals. They are also dictating what they will pay for procedures and daily room rates. Hospitals who are bidding for their business by lowering their charges are seeing their margins squeezed and their 'excess income over expenses' trending downward. The federal government has long since established DRG (Diagnostically related groups) rates which are below the costs of hospitals, and far below the normal charges of doctors. And that is going to get worse with the Medicare crisis we are facing. The financial pressures on hospitals have never been greater, and they are increasing. How long can hospitals continue to give away care that the paying patients are paying for now, but paying less and less each year because of the managed care companies and the federal government? Even now, commercial, for-profit insurance companies are taking over management of Medicare and supplemental insurance from the government with their Medicare HMO's, and doing a much more efficient job of it. They are offering supplemental insurance for nothing or near nothing just to have the lives assigned to them at a flat monthly capitated rate per life. They can take that, go into the market place, and provide more efficient care for those on Medicare. How long will it be before we have universal health care with everyone covered by government insurance? The politicians are falling all over themselves buying votes with that offer. Look at welfare. The government has taken that away from the churches. Who cares for the widows and orphans now? Politicians have learned how to get re-elected. We don't like it, but that is what has happened. The churches no longer take those responsibilities. They used to. Yes, church supported hospitals were the leaders in providing medical care in the beginning of modern medical care.

Family doctors made housecalls, took chickens and eggs or nothing for their care, and literally worked themselves to death in many instances. That has all changed. The first paper you fill out when you go to a doctor or clinic is the insurance information.

Most people have no idea that all of this is going on. They are ignorant of the status of health care today. They simply have not informed themselves, yet they complain loudly out of their self-imposed ignorance.

Selling BHCS is not a threat to the availability or quality of health care in the Dallas community. It assures its continued access, because the buyer is capable of providing the desperately needed long term funding and management. The hospital administrators have already realized and stated that they are going to have to do something dramatic to compete and survive in the increasingly competitive Metroplex market. Their solution was inconsistent with good stewardship: merge or ally with other not-for-profits all facing the same critical future, share the responsibility and accountability, and give up the asset.

Make no mistake. BHCS is an asset of Baylor University. The Baylor Boards down through the years provided the leadership and management, lent Baylor's good name, and stood responsible for its continuation. There are those who would like to take it away from the University and appropriate it for their own purposes. However noble or ignoble their motives may be is also moot. They simply do not have the right or the authority. Neither do they have the vision to see how the investment of private enterprise can benefit the community, the hospital, and the University. The University Regents were elected to protect and defend the name and the assets of Baylor University. They can do no less. To allow the Baylor Hospital to slip away, or be taken away would be a gross dereliction of fiduciary duty, or in biblical terms, poor stewardship. To allow Baylor's reputation to be subjected to malicious attacks without telling the whole story is also a dereliction of duty. Consider the adverse reaction of Baylor's many donors and supporters nationwide if we fail in these duties.

The Regents must champion this vision: An opportunity has presented itself that would allow millions of stockholders across this nation to invest in the Baylor Hospital and thereby make those millions of dollars available for Christian education. Those funds would catapult Baylor into the top ten in endowment and provide for its perpetuation. It would provide the endowment that would generate the funds to hire the finest professors, buy the latest educational equipment and technology, hire the best administration, maintain and/or build the needed buildings, create the most effective educational programs in all departments, enhance the image of the University, provide financial assistance to students who could never even dream of going to a University of the caliber and quality which Baylor could become. This would benefit untold thousands into the future.

Churches and families worldwide could feel the reach and touch of this great Christian educational institution. Literally thousands of young lives would be impacted by the Christian influence, atmosphere and teaching of Baylor. What a glorious feeling to know that we had made this possible by following the will of God in providing for an institution we all believe he has had his hand on for a very long time! The miracle of it all is that we can do it without taking anything away from the Dallas community. We need to tell the whole story to them. We need to inform and persuade. I have a great confidence in the constituents of the University when they are told the whole truth.

My fear is that we have been intimidated and manipulated by people with their own agenda and are in danger of succumbing to their accusations and threats. Too many of us do not like to be called uncaring, greedy, trust breakers, stupid. We have allowed ourselves to be convinced by the shrill cries of the uninformed followers of the fear mongers. We get to the point where we just can't stand the pressure, and we just cave in. That is the easy way. What is it to us individually? What do we have to lose individually? Let them have their way. Let them take away the University's most valuable asset. We are tired of the fight. Is that what we were elected to do? I think not! It is time for us 'to gird our loins', screw up our courage, take the heat, and stand up for what is best for Baylor University...even if it means taking some more cheap shots, being called dastardly names, and threatened with loss of support in the Dallas area. Our constituency is much, much larger than the Dallas area. We have a responsibility to ALL of them. Are we going to sell out for a 'mess of pottage'? We must tell our story, loud and strong and often. Too much is at stake.

I'm reminded of the story you all know of the man sitting on top of a flooded house who had refused three offers of help, finally drowned and complained to God for not saving him...to which God replied, 'What do you mean? I sent three people to rescue you.' We all pray and work for the support and continued viability of Baylor. Could it be that God is answering our prayers?

This is the untold story. However, there is yet more information to be considered. We should make no decision until we have received the $400,000 study we have commissioned, and taken ample time to digest and discuss it. Furthermore, we should take time to hear what all concerned parties have to say on this matter and build consensus on the proper course of action.

Thanks for plowing through this. I think it needed to be said.

I am praying for you.

Sincerely yours,

Ted L. Snider

Regent

Baylor University

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