Till Death Do Us Part
For half a century, in sickness and in health, the marriage of Baylor Medical School and Methodist Hospital produced first-class medicine for Houston and the world. But money, egos, and backstabbing came between them, and now both institutions—and all of us—are the poorer for it.
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Until he got to Houston, in March 2003, Peter Traber liked to think of himself as somebody people liked. Approaching fifty, the new president of Baylor was a burly, friendly, baby-faced man with a firm grip and a straightforward manner. Like Robertson, he had played college football (tight end for Michigan) and wasn’t a man who was afraid to butt heads. A gastroenterologist who had led the University of Pennsylvania medical school’s department of internal medicine to a number two national ranking, he went on to run the medical school for a tumultuous eighteen months. He resigned because the board wanted him to sell the school’s hospital, a move he believed was foolhardy. He had also been the chief medical officer at GlaxoSmithKline, a major pharmaceutical company. Traber believed he had a sterling reputation for collaboration and negotiation, and he had chosen Baylor—turning down a simultaneous offer from the University of Michigan’s health care system—because he saw a chance to put his skills to use in the negotiations with Methodist and regarded it as a challenge. He did not imagine that he would come to be viewed, for a time, as the villain of the Baylor-Methodist split.
But the trouble had started almost as soon as he’d hit town. In October 2002 Baylor and Methodist had agreed to a temporary, eighteen-month affiliation agreement. By the following spring, when Traber arrived, a longer-lasting agreement had not been finalized. Meanwhile, soon after his arrival, two members of a Baylor planning committee asked his permission to discuss the possibility of creating a Baylor outpatient clinic. Traber’s response was, sure, why not? The medical world knew that more care was taking place in outpatient clinics instead of inside hospitals. A Baylor clinic, staffed by Baylor doctors, would solve a great many problems for the school. It would make Baylor self-sufficient, and it would give Baylor researchers a place to shine in adult care, which the board had charged him with improving. Of course they should look at the idea of a Baylor clinic.
The problem, Traber soon learned, was that it raised the “trust issue” Bookout had referred to. The idea of an outpatient clinic at Baylor had come up before, and Methodist had always objected on the grounds that Baylor’s clinic would compete for patients with Baylor’s teaching hospital.
Bookout was already unhappy that the temporary agreement was taking so much time. The joint committee meetings, chaired by Baylor, suddenly weren’t being called as often as he liked. This situation also surprised Ron Girotto, Methodist’s CEO and president, as he had worked relatively well with Baylor in the past. He had even flown to Philadelphia to help woo Traber when Robertson had asked him to. Girotto was not what you would call a people person; pale and bespectacled, he had worked in the background during the Mathis era as Methodist’s CFO, a man who could squeeze every dime out of the reductions wrought by managed care. Girotto was also beholden to Bookout, who had urged him to come out of retirement to return to Methodist after no satisfactory successor could be found for Mathis.
At this point, then, the four people best equipped to bring the organizations together were, by their natures, ill-equipped to do so. Girotto had decades of experience playing the Houston game; Traber was the first outsider to run Baylor in the institution’s history. Traber and Robertson were trying to protect Baylor’s main asset, its reputation, which meant that they didn’t want to let Methodist’s private doctors have any say over Baylor’s doctors. Bookout and Girotto couldn’t favor Baylor over their own private doctors, who brought in 74 percent of the hospital’s revenues. Methodist thought it had the upper hand in the negotiations; it was possible to believe that Baylor had nowhere to go and would accede to Methodist as it always had. There was, in fact, a feeling around Methodist—a feeling that spread in the country clubs and executive suites around town, where people generally sided with Methodist—that Peter Traber wasn’t respectful enough of John Bookout. He didn’t return his phone calls. He didn’t give Bookout an agenda when asked for one. He didn’t pay social calls, bourbon in hand for the big guy. That’s how you get along in Houston.
Instead, in June 2003, Baylor’s leadership dropped what Methodist saw as “the bombshell”: It wanted Methodist’s private-practice doctors excluded from negotiations, and it wanted Methodist to build a Baylor-only outpatient clinic. Baylor would share in the revenue and run the clinic. These demands angered Bookout, because he had already told Robertson several months back, “We can’t live with a Baylor outpatient facility.” He couldn’t agree to any Baylor project that would compete with his hospital. Bookout asked for a new draft agreement without the words “outpatient clinic.”
Traber took his case to the Houston Chronicle, which published an article detailing the negotiations between the two institutions and making Baylor look like the more public-spirited. To many in the medical center, the subtext of the story was this: Methodist, a private, nonprofit institution, had $2 billion dollars in a rainy day fund. Why couldn’t they share some of that money with the people of Houston? How hard did it have to rain before Methodist offered to provide an umbrella? Girotto sounded like a whiner in response: “It fundamentally changes the relationship we’ve had. And that’s not acceptable.”
Bookout, the quintessential backroom operator, was livid that the disagreement had leaked. He was also hearing rumors that Baylor was exploring a possible relationship with St. Luke’s. This was true, though no one at St. Luke’s really believed that status-conscious Baylor would actually leave Methodist for a lower-ranked hospital, and no one at Methodist believed it either. But just to be sure, they sent a letter to Houston’s biggest local donors, warning them that a Baylor clinic would be a needless duplication of services and facilities. Collaboration, the letter asserted, was best for the community. In other words: If Corby Robertson comes with his hat in his hand asking for money, show him the door.
If the public remained relatively oblivious to the conflict, local doctors did not. They were worried about what would happen to their practices and their patients. Robert Alford, a longtime member of the Baylor faculty and a revered chief of service at Methodist, was the first to choose sides publicly. “Methodist and Baylor appear to be locked in a senseless power struggle in which the patients and the future of medicine in Houston become the victims,” he wrote in a letter to the medical community. But he chose to stay with Baylor.
As the situation deteriorated, Bookout met once again with Robertson. In return for the Baylor chairman’s promise that the school was not negotiating with any other hospital, he agreed to build new, separate buildings for Baylor doctors and Methodist’s private doctors, with still another building between them that would house all the diagnostic and technical equipment—the money-generating arm of health care. Methodist, of course, would run the operation. Thinking he had a deal, Bookout sat back and waited for Robertson to take his beneficence before the Baylor board.
On November 19, 2003, Robertson did just that. In the audience was Michael DeBakey, who was asked for his opinion. He stood before a crowd of about one hundred people and gave it. “The college must control its own destiny,” he said. His voice was firm, but his heart was heavy. Without control of the clinic, the school couldn’t control the quality, nor would Baylor have access to the money it needed for its independence.
At six o’clock, Bookout got his answer: Baylor had entered into negotiations to affiliate with St. Luke’s. A confidentiality agreement prohibited them from talking with any other parties for sixty days.
When Baylor went into radio silence with St. Luke’s, the blinders came off at Methodist. They committed $100 million to launch a research institute that had been in the planning stages; they also announced an expansion that included $300 million for a patient care clinic and $70 million for an outpatient clinic. Finally, the rainy day had come for Methodist’s rainy day fund. Methodist’s announcement, board member Ernie Cockrell told me, sent a subliminal message to Baylor: As he put it, “Methodist is on a new path. You need to be prepared to come back. Methodist is not going to play second fiddle to St. Luke’s.” This was Methodist-speak for “We will bury you.”
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