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Regents discuss future of hospitals

Jan. 21, 1997

By Michelle Van Rysselberge

Lariat Staff Writer

The competitive health care market brought the University Board of Regents and trustees of the Baylor Health Care System (BHCS) in Dallas together Friday to discuss the future of the BHCS.

President Robert B. Sloan Jr. and regent chair Randall Fields, a San Antonio lawyer, held a press conference Friday at the Ferrell Center to announce various options that the regents will review.

BHCS officials have been discussing concerns about their future ability to compete since last April. Trustees came to the University in October to propose that the BHCS consolidate with other nonprofit organizations. In order to carry out a merger, a vote of approval by the regents is necessary, said Dr. Stan Madden, vice president for university marketing.

In response to the proposal, regents hired a consultant, Josh Nimzoff of Nashville, to prepare a report of all possible avenues for the BHCS. Nimzoff met with the regents and trustees Friday to discuss the possibilities he had explored over the past couple of months.

Madden said that Nimzoff suggested six strategic options: do nothing, network with other nonprofits, buy other health care facilities, enter into a joint venture with a for-profit, consolidate with other nonprofits, or sell the BHCS to a for-profit.

The final decision will not harm the Baylor Nursing School. Students can only benefit from either the merger or sale of the BHCS, Sloan said.

'Enhancing the nursing education facility is of utmost importance,' Sloan said. 'Both options would maintain the quality and mission of the nursing school.'

The decision will not affect Houston's Baylor College of Medicine since it is not part of the Baylor University system.

Sloan said that the regents have seen their responsibility and need to take a realistic and sober look at all of the options and evaluate the consequences.

Regents rejected four of the six options, leaving the consolidation or sale as the only considerations.

'Doing nothing and networking with nonprofits was rejected because the BHCS probably would not survive over time in the competitive market in Dallas,' Madden said. 'Buying other health care facilities would be too risky for a nonprofit and the joint venture would leave the for-profit with too much control of the system.'

Regents are pursuing a thorough examination of the options and are developing a timetable to come to a decision, Fields said.

Boone Powell Jr., president and CEO of BHCS, has stated that he does not promote a sale of the system.

A press release endorsed his viewpoint: 'No change can occur without the concurrence of the Baylor Health Care System board of trustees. In December 1996, the board resolved that [it] had no interest in changing its purpose and community mission and that it had no interest in selling to a for-profit corporation.' The Lariat's attempt to reach Boone on Monday was unsuccessful.

In the past there have been numerous small competitors, but changes are occurring rapidly in the Dallas health care market. BHCS is not the large competitor it used to be. Large for-profit organizations are buying medical entities and nonprofits are being bought as well as merged. In the future, two or three systems will most likely control 80 percent of the health care business in Dallas, Madden said.

'Although health care has changed nationwide as well as worldwide, the BHCS and the University's dedication to education research and health care has not changed,' Sloan said. Both organizations list these purpose statements in their charter, he said.

Since the University has been affiliated with the Baylor hospital in Dallas since 1921, tradition is an element that plays a part in the decision making process.

'Baylor University has had a great heritage with the Baylor Health Care System,' Sloan said. 'The options tug at heartstrings.'

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