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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Methodist’s move had the desired effect: Baylor got a release from St. Luke’s to reopen negotiations with its estranged partner. The hospital had two more demands: First, these negotiations would be for a long-term agreement; Methodist did not want Baylor reaping the benefits of Methodist’s expansion and then moving to St. Luke’s. Second, Bookout did not want Traber in the room. Robertson agreed to the terms. The negotiations began again in earnest, but it wasn’t long before Methodist started to suspect that Baylor wasn’t sincere in its commitment. “Our team would talk to the Baylor team, and as soon as we got close, Baylor had a new team,” says a private heart surgeon who practices at Methodist. There were frantic calls to board members on both sides. There were quiet dinners and dove hunts at doctors’ ranches. But the negotiations still looked fruitless. People seemed to have lost sight of the fact that the purpose of both institutions was to care for the community: One member of the Methodist board thought they shouldn’t make peace with Baylor unless the school agreed to help Methodist raise its U.S. News rankings. (“What about raising the amount Methodist gives to indigent health care?” a Baylor board member suggested to me sarcastically.)
But some doctors at Baylor, whose practices were based inside Methodist, were incensed with the school’s leadership. A group of prominent Baylor faculty members sent a letter to the board claiming that if the St. Luke’s affiliation went through, “a crisis of major proportions for Baylor will develop, and we will struggle to avoid devastating consequences.” The doctors went on to warn that the college could “implode financially.” Their practices, they said, were dependent on Methodist’s operating rooms, labs, and equipment. St. Luke’s did not have equivalent facilities, nor did it have the money to build what they needed. In addition, the patients of these doctors didn’t want to go to St. Luke’s; they wanted Methodist. The Baylor doctors would soon have nowhere to go if they couldn’t stay at Methodist: Most of the school’s doctors were housed in the Smith and Scurlock office buildings, which were owned by the hospital. The doctors’ leases had expired in June 2003, and there were rumblings that Methodist intended to evict them.
But the college wasn’t budging. St. Luke’s found room for Baylor doctors in a spanking-new office tower and made plans to quickly renovate a nearby parking garage. A big donor pledged $35 million for the new Baylor clinic. Another promised $24 million. Who said Baylor couldn’t get into the hospital business?
Still, with the doctors’ outcry, it made sense to give Methodist one more try. For a brief period, it looked like peace was at hand: Methodist came through with a new document that offered to commit $1.5 billion for expanding its facilities and to contribute another $75 million in fees and services to Baylor. In the eyes of one negotiator for Methodist, “It was a heck of a deal.”
The Baylor board did not agree. They figured Methodist’s $75 million offer was really worth only $45 million, and, more important, the old issue of power remained unresolved. Baylor wanted to control the diagnostic center, but Methodist refused, for the same reason as before—it couldn’t afford to alienate its private doctors, who were, after all, floating the hospital. The document also contained a clause that essentially stated that for four years Baylor couldn’t compete with any program Methodist already had. The school’s outside counsel reviewed the document and told Baylor negotiators that it was “the most one-sided affiliation agreement” he’d ever seen and advised against signing it.
Baylor sent another proposal to Methodist but insisted on a commitment within two days, because the temporary affiliation agreement was about to expire. Methodist asked for an extension: Bookout was out of town and didn’t have time to review the latest changes. Baylor refused. Finally, last April, four days before the expiration date, Traber met with his board at Trevisio, an elegant restaurant that provided a view of the entire medical center. He presented the audience with a comparison of what St. Luke’s was offering and what Methodist was offering. Basically, the choice came down to money from Methodist or, by going with St. Luke’s, freedom for Baylor to control its future. “Whichever way the board wants to go,” Traber said, “I’ll work as hard as I can to make it successful.” The board voted unanimously to divorce Methodist Hospital and marry St. Luke’s.
There was complete silence in the Methodist boardroom when the Baylor decision was announced. Without Baylor, the hospital had no top doctors to run its planned research institute, no one with experience in research, and no affiliation with a medical school. Ron Girotto thought it might have been the lowest day of his life. But it wasn’t long before the Methodist side rallied. Bookout had a trip planned for New York in June and made a breakfast date with his former personal doctor, Antonio Gotto, who had been Methodist’s internal-medicine chief and Baylor’s chairman of medicine. Gotto had been passed over in favor of Ralph Feigin to run Baylor, and it was widely assumed that he still harbored some bitterness toward his former school. Now he headed Weill Medical College of Cornell University. From that meeting, the idea of an affiliation between Methodist and Cornell emerged. Gotto arranged a meeting between Bookout and Sandy Weill, a well-known New York financier and Cornell medical school’s namesake. “I’m not interested in a long, drawn-out process,” Bookout told Weill when they met a few weeks later. “I’ve just been through one of those.” Weill agreed. The deal they struck called for Methodist to pay $100 million to affiliate with Cornell, mainly for the benefit of its name—money that could have funded a Baylor clinic in happier times. The Chronicle story announcing the agreement noted that Cornell ranked twelfth on U.S. News’ rating of American medical schools, one notch ahead of Baylor. One of Cornell’s affiliates was in Qatar, and the joke at Baylor was, Which residency program would medical students prefer?
Robertson, however, wasn’t amused. Notwithstanding the new name, Cornell doctors would not be staffing Methodist. The hospital was starting its own residency program for students who would apply directly to Methodist (like Mass General, in Boston) and be supervised by doctors Methodist would hire. The logical place for Methodist to find its new faculty, Robertson knew, was Baylor, and he believed that his doctors were either being enticed or coerced to stay at Methodist. As proof, he cited Methodist’s doubling of the rent for Baylor’s office space in the Smith and Scurlock towers, costing the school about $3.5 million. Doctors who stuck with Methodist, however, faced no increase. Robertson threatened legal action, leading Ernie Cockrell, of the Methodist board, to joke, “We’ve gotten a divorce, but the wife still wants to live in the master bedroom.”
Passions were definitely heating up with the summer temperature. A new rule took effect at Methodist on July 1 that required physicians who held leadership posts at Methodist to admit the majority of their patients there. This effectively forced Baylor chiefs to choose between Methodist and St. Luke’s. The former chief of surgery at Methodist jumped to St. Luke’s, where he could keep his Baylor faculty position. Shortly thereafter, the chairman of the Baylor pathology department announced his decision to leave Baylor and remain at Methodist, with his lab. Methodist promptly canceled Baylor’s pathology contract, worth about $10 million a year to the school.
And so it went, for the coming months. The divorce was final, but custody was still to be decided. A member of the Baylor board publicly criticized Traber’s leadership, alleging that he had “mismanaged and jeopardized” the relationship with Methodist, but the board stood firm behind the new president, even when he demoted Stanley Appel, the much-beloved (and renowned) head of neurology, for flirting with Methodist. Appel soon left to run Methodist’s new Neurological Institute. There was some sense, in the corridors of Baylor and Methodist, that Traber was willing to lose his longer-tenured doctors, who were expensive and less productive, in order to have a pot of money for new faculty.
As 2004 came to an end, the war showed no signs of letting up. Still, this being Houston, a sense of bravado emerged. It went something like this: In time, Houston would have not one but two great residency programs and two great research institutes. “Five years from now it will look entirely different,” Robertson told me. Girotto agreed: “Everyone’s going to be better off. I very much wish Baylor the greatest success.”
No one was particularly interested in addressing how much time and money would have been saved and how much important research might have taken place if only the two had found a way to compromise and move forward. Except in unusual instances, Baylor has lost access to Houston’s only state-of-the-art hospital, while Methodist has lost access to great doctors. Most likely, both institutions will suffer a drop in their much-coveted rankings because of the split, while St. Luke’s should reap a bonanza from it—unless, of course, its affiliated doctors from the University of Texas Health Science Center start to resent Baylor’s intrusion. Then, too, there’s the fear, which extends far beyond Houston, that the split between Baylor and Methodist carries a larger issue for American medicine: whether great medicine can survive in the era of managed care, with funds so tight and medical professionals fighting for the scraps.
In that regard, Houston has lost big, and some of the blame has to fall on its own culture, which still bears traces of “win at all costs.” There was no tougher fighter for Baylor than Michael DeBakey for 55 years, but he understood that preserving a partnership that made for better patient care is more important than victory for one team over another. When his son Ernest died last year, and knowing that Baylor was in control of its destiny, he asked that contributions be sent to Methodist Hospital.
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