Gary Brock (Figure 1) was born in Wewoka, Oklahoma, on April 27, 1954, and grew up in that small town. In 1976 he graduated from the University of Oklahoma (OU) in Norman, Oklahoma, and a year later he received a master of public health degree from the same institution. In April 1978, he accepted the position of assistant administrator at McAlester Regional Hospital in McAlester, Oklahoma, where he stayed until June 1985, when he moved to Garland, Texas, to be assistant administrator of Memorial Hospital of Garland. Within a year he was the chief executive officer (CEO) of that hospital, and he remained there until September 1996, when he became senior vice president, physician network/managed care operations of the Baylor Health Care System. In the interim, Memorial Hospital of Garland had become part of the Baylor Health Care System. In April 1994, he became president of HealthTexas Provider Network, and he has remained in that position since. In addition, in April 2000, he became executive vice president of Baylor Health Care System, where his responsibilities include systemwide managed care activities, strategic planning, hospital affiliations, and joint venture partnerships. He also serves as administrative liaison with the presidents of Baylor medical centers at Garland, Grapevine, and Irving. Gary Brock obviously has become a major player in the Baylor Health Care System. In addition, he is a nice guy and fun to be around.
Figure 1.
Gary Brock
William Clifford Roberts, MD (hereafter, WCR): Gary, I appreciate your willingness to speak to me and therefore to the readers of Baylor University Medical Center (BUMC) Proceedings. We are at my house on September 27, 2000. I'd like to start by asking you about your early upbringing, your parents, and your siblings.
Gary Dale Brock (hereafter, GDB): I was born in Wewoka, Oklahoma, about 60 miles east of Oklahoma City. It's a town of 3500 people in the central part of the state. In the 1920s and 1930s, its main industry was oil. Later, it became more of an agricultural community.
I was born on April 27, 1954 (Figure 2). I have an older sister, Debbie, who was born in 1952. I have a younger brother, Randy, who was born in 1958. Both sets of grandparents lived in the Wewoka community and so did most of my aunts and uncles. We would go out and do something, and before we would get home our parents would know where we had been and whom we had been with. It was a nice environment to grow up in. I went to elementary school, middle school, and high school in the public schools in Wewoka. Growing up, I was involved in Cub Scouts and then Boy Scouts. I achieved the rank of Eagle Scout.
Figure 2.
Gary Brock at age 2.
I worked growing up. I did a little bit of everything. We gardened in the summers, and I sold vegetables. I mowed yards and hauled hay. My first real job was working at a fast food restaurant. I continued to do odds-and-ends–type jobs until I attended OU, and then I secured more substantial jobs.
WCR: What did your mother and father do?
GDB: My dad was a civilian employee for Tinker Air Force Base in Oklahoma City. He had about a 60-mile commute each way. My mother was an administrative secretary at a manufacturing company that built water coolers. After I left home, she took a job as a secretary at Tinker Air Force Base. Once the kids were grown, my parents relocated to Oklahoma City. They live there today.
WCR: What were your parents like? Who dominated the family?
GDB: My father was the dominant parent. Our parents expected us to be self-sufficient. With both parents working, my sister, brother, and I would take turns making sure that everything was tended to around the house—helping to prepare the meals, cleaning up, mowing the yard, etc. My dad was involved with me in the Boy Scouts program. He worked with our scout leader and went with us on scouting trips. We went to the Grand Canyon one year and hiked to the bottom and back. He was heavily involved in the Baptist Church as a deacon, treasurer, and choir member as we were growing up. We were the traditional family from the 1950s and 1960s in terms of living in a small community close to most of our relatives.
WCR: It must have been nice to have so many relatives close by. Were both sets of grandparents alive?
GDB: Yes. I spent time with them on the weekends at their homes. I raised chickens and rabbits with my grandmother Brock. She had many flower gardens that she liked to tend. Neither set of grandparents drove or had cars. They walked everywhere. My parents would drive them if they needed to go a longer distance.
WCR: Did both sets of grandparents work?
GDB: They were retired as I was growing up. They had both been farming families.
WCR: Did they own farms in the area?
GDB: At one time. They moved into town when they retired.
WCR: How did you get so involved in Cub Scouts and Boy Scouts?
GDB: My middle school principal—a Seminole Indian named Tuskahoma Brown Miller—was a great leader in the program. He recruited me into scouting and made sure that we attended the weekly meetings. Every summer he took the troop different places. He was the biggest influence in encouraging me to achieve Eagle Scout. The year I received my Eagle, there were 8 of us. That was a large number of boys from such a small community to accomplish this feat.
WCR: Achieving Eagle Scout is quite an honor. There have been follow-ups on what's happened to Eagle Scouts, right?
GDB: For the most part, they have done extremely well. I think the Eagle Scout program teaches boys about teamwork, the values needed to work in society, and, most of all, leadership. Most boys who go through the program are more focused than if they had not gone through the program.
WCR: Did you go off to a Boy Scout camp any time?
GDB: Yes, every summer.
WCR: That helped to get merit badges.
GDB: Yes. There are Boy Scout camps all over the state of Oklahoma. We'd go to different ones each summer, usually for a week. We'd camp out, do archery and rowing, and work on different merit badges needed to continue to move up the ranks.
WCR: Were you an athlete in high school?
GDB: Yes. I played football in middle school and high school as an offensive right guard (Figure 3). I lettered in both schools. We played 8 conference games (Seminole, Holdenville, Bristow, Henryetta, and other small communities in the area), and we won our conference my freshman, sophomore, and junior years of high school. We went to the state playoffs those 3 years, and each year we were eliminated in the first game. I also threw the shot put in high school.
Figure 3.
Gary Brock during his senior year as a Wewoka “Tiger” right guard
WCR: It sounds as if church was a big thing when you were growing up. The family went to church every Sunday?
GDB: Yes, every Sunday and Wednesday night. It was a small Baptist church, maybe 200 members. My dad was head deacon and treasurer of the church as well. He was very involved, and my grandparents also went to that church. We grew up in the church.
WCR: Church was a very important part of your activities and your life growing up.
GDB: Yes. In junior high and high school, I tried to be involved in many of the extracurricular activities. I was a member of the student council in both junior high and high school and president of my class during my senior year of high school (Figure 4). I was involved in Thespians, a club that prepared students for public speaking. We had debates and competitions.
Figure 4.
Gary Brock in 1972 as a high school senior.
WCR: What did you talk about?
GDB: They usually gave us topics on world events, and we debated one side of the issue or the other. Faculty from the various schools worked with us and judged us on our positions and how we defended ourselves.
WCR: It was more of a debating society than a public speaking course.
GDB: We did some public speaking, but most of the competition centered on debate.
WCR: You must have been a pretty good student in high school.
GDB: I was in the top 10 students, with 80 in my graduating class.
WCR: How many students were in the whole high school?
GDB: Maybe 350 to 400. It wasn't a large school system.
WCR: How did you end up going to the University of Oklahoma?
GDB: I followed OU because of its football program, which I was really interested in. I had gone to some of their football games. I applied in my senior year and was accepted. I'm the only child in my family who went to college. I enrolled without a declared major and started by taking only core courses. Then I became interested in physical therapy and was accepted into physical therapy school. I took human anatomy, kinesiology, and physiology. Physical therapy was in the same building as allied health and the school of pharmacy and nursing. Some students there were going into health care administration, and I became interested in that field. During my senior year, I changed my major from physical therapy to health care administration. I finished with an undergraduate degree in psychology, took my graduate examination, applied to the OU program in public health, and was accepted in the fall of 1976.
I finished the 2-year program and started looking for a job. At the time I had a master's degree but no experience in health care. I completed a residency, which was really more of a rotation through different departments at a community hospital in Edmond, Oklahoma. I worked and continued to look for a job. I didn't seem to be having much success. I visited with Ivan Hanson, PhD, my faculty advisor at OU. He told me that since I was a good student, I might want to work on a doctorate in public health. At the same time I had become friends with Ed Majors, who was working on his master's degree. He had just accepted the position of administrator of the McAlester Regional Hospital in McAlester, Oklahoma. He called me one day and said, “Are you tired of being a professional student and ready to start working?” I thought about that and talked to my faculty advisor. Dr. Hanson said, “You need to decide if you want to work in administration or if you want to teach. If you want to teach, then you might want to stay and earn your doctorate.”
Ed had a great opportunity in McAlester. There were 2 hospitals in that community—a Catholic hospital, St. Mary's, and a municipal hospital. Both were very old facilities, and the sisters and the city had meetings and decided that if one or the other could build a new hospital, the other one would close down. The city decided to build a new 200-bed hospital, and the sisters pulled out. The job was a great opportunity to learn about a merger, opening a new facility, creating new programs, and recruiting physicians and employees. I left OU at that time and took the job, thinking I could always go back if I wanted to. I never did.
WCR: How far is McAlester from Oklahoma City?
GDB: It is about 120 miles east.
WCR: It was east of where you grew up.
GDB: Yes, about 60 miles. It is in the southeastern part of the state.
WCR: Let me go back just a bit. You mentioned a mentor in junior high school, Mr. Tuskahoma Miller. Were there other teachers or role models who had a considerable impact on you in junior high or high school?
GDB: My Spanish instructor, Mrs. Biggers, influenced me. I took 4 years of Spanish in high school and went to Mexico City on 3 trips with her through the Spanish Club. My football coach, Mr. Glenn Secrest, had a great deal of influence on me as part of his football program. In college, I enjoyed working with Dr. Hanson, my faculty advisor in the master's program.
WCR: It sounds like if you hadn't gone into physical therapy, you wouldn't have ever become aware of the opportunities in hospitals. As you reflect on it, what interested you in physical therapy?
GDB: I thought that by getting into physical therapy, I could work with sports and athletic training. One of my best friends in high school and I went into physical therapy together.
WCR: You were the first one in your own family, and possibly in your large family in Wewoka, to go to college.
GDB: My dad's brother graduated from Central State University in Ada, Oklahoma.
WCR: Did you get a scholarship to the University of Oklahoma?
GDB: No.
WCR: Did you earn your own way through college?
GDB: My parents helped me as much as they could, but I also worked. In my sophomore year, I ended up rooming with Bailey Harrison, whose dad owned an insurance agency. His dad got us into a training program with the General Adjustment Bureau after our freshman year. In the summer, whenever tornadoes and hailstorms would go through Oklahoma and Kansas and destroy houses, buildings, and farms, they would need extra staff to estimate damages. During the summers between my freshman, sophomore, and junior years, we were given 200 to 300 claims that had been filed in a particular area. We worked those claims—going to the houses, climbing roofs, measuring them, and estimate replacement costs, water damage to the houses, crop loss to the farmers, irrigation pipe replacement costs, etc. It paid very well. During the summer I could make about $5000 working those claims. They also paid us $25 a day for our car, housing, and food. Usually we had enough claims to know that we were going to work about a month in a community. We would try to find a garage apartment for $50 to $75 a month and save as much of the per diem as we could. I worked really hard through the summers and tried to make as much money as possible to carry me through the school year. If I needed additional income, I would find a part-time job. But generally I had enough money saved from my summer work.
WCR: That must have given you a tremendous experience, learning the prices of all these items. The job also must have given you a good bit of confidence.
GDB: Their program was to train college students and hire them after graduation. I considered insurance adjusting as a potential career but decided that it wasn't really what I wanted to do. It was great money as a student, but I became interested in health care. My wife's parents had a good friend who is a family physician, Dr. Jack Parrish, and I visited with him about the health care field and hospital administration. He had experience with hospitals and with administrators. He encouraged me to pursue that career.
WCR: When did you get married? How did you meet Debbie?
GDB: I met her in my sophomore year at OU.
WCR: Was she a sophomore, too?
GDB: Yes. She grew up 12 miles from me in a town called Seminole, which had about 12,000 people. Wewoka and Seminole were huge football rivals. Generally, girls from Seminole wouldn't date boys from Wewoka and vice versa. We both ended up at OU. During my sophomore year, my roommate, Bailey Harrison, and I had rented an apartment, and Debbie and 3 other girls lived below us in an apartment. Throughout that school year, Bailey and I worked out a deal with these 4 girls: we pooled our money to buy groceries, and then we'd take turns cooking. Towards the end of the sophomore year, Debbie and I started dating. We dated our junior year, became engaged, and then married during our senior year (Figure 5). We'll celebrate our 25th anniversary on January 3, 2001.
Figure 5.
The wedding of Gary and Debbie Brock (both aged 21) on January 3, 1976, in Seminole, Oklahoma.
WCR: How old are you now?
GDB: I'm 46.
WCR: She is the same age. When did your boy come along?
GDB: Garrett was born in September 1983. We were married 7 years before we had him. We wanted to be established before we had our first child.
WCR: You graduated in May 1976.
GDB: Yes. I started the master's program in August 1976.
WCR: How much time did you spend working on your doctorate?
GDB: I was just beginning when I accepted the position at McAlester.
WCR: What did you write your thesis on?
GDB: The indirect costs of health care. There were many publications on the direct costs of care as a percentage of gross national product, but few on indirect costs of health care in terms of lost production time from work and travel.
WCR: How many classmates did you have in your master's degree program? How many were there in the doctorate program?
GDB: Eleven for the master's degree. There were probably 5 working towards a doctorate.
WCR: As you look back on it, do you think you made the right decision?
GDB: Yes, I do. Going to McAlester was a great opportunity for me. We were opening a new facility in a community of 18,000 people and were serving a regional area of 156,000 people. We built 2 large professional office buildings. We recruited >40 new physicians to the community. I was involved in writing policies and procedures for a startup hospital and in buying all the equipment and furnishings. Coming out of an educational program and in a year's time having so much work was great. I received a great deal of experience there.
In the early 1980s, I started hearing about diagnostic-related groups (DRGs) and managed care. Even when I was in graduate school, they were talking about the Kaiser health maintenance organization (HMO) and how Congress was watching that model. I felt like I wasn't going to get experience with managed care in McAlester. I had been there for about 7 years and had accomplished quite a bit at that facility, but we weren't in a situation where we were going to expand services much more. If I went into an urban area, I would get experience with managed care. We started looking at relocation opportunities and wanted to stay within a 3- or 4-hour drive from our parents so that we could continue to stay involved with them. I ended up taking the position in Garland.
WCR: How did you become aware of the position in Garland?
GDB: A recruiter contacted me to see if I had an interest.
WCR: When you went to McAlester Regional Hospital, you were the assistant to the CEO from the beginning. Were there any other hospital administrators at the time?
GDB: No. There were just the 2 of us. We had a 200-bed hospital, and it was growing. It was an interesting situation. We had 2 hospitals that were going to close and come into the new hospital. We had 2 of everything—2 chiefs of staff, 2 boards, 2 directors of pharmacy, 2 directors of nursing—and we had to choose one. In the past, when employees would become unhappy at one hospital, they would quit and work for the other hospital. If a surgeon got angry with the director of surgery at one hospital, he'd move all his patients over to the other hospital. All of a sudden, the 2 hospitals were going to merge. In the first 12 to 18 months of that merger, we had a >50% turnover in staff. There was heavy recruitment to replace and backfill. It was a great learning experience in terms of the dynamics of getting a new hospital up and running.
WCR: It sounds to me like the administrator gave you a lot of responsibility right from the beginning.
GDB: Right. Again, he and I knew each other from OU. He knew me through my work there, and I think he felt comfortable turning work over to me. Today, he is in Dallas and is the president and CEO of CareFlite.
WCR: He was how much older than you were?
GDB: Ten years.
WCR: That was a wonderful experience starting a new hospital and settling all the political wars.
GDB: The system was a beneficial public trust authority: the mayor would recommend board members to the city council, and the city council would then ratify those members, so the hospital was involved with the politics of the city. The local cable television company filmed our board meetings and showed them on cable TV; it rebroadcast them several times through the month. We really became known in the community because of the television and newspaper coverage of the hospital. Debbie would ask me to stop by the grocery store and pick up some things after work. I would go in and run into people who knew that I worked at the hospital. They would want to talk to me about a bill, complain about their physician, or put in a plug for their child for a job. I never could get away from my job. That is another reason why I wanted to live in a larger community. When I leave the Baylor campus today, I may still run into somebody I know, but the chances are less in a larger community.
WCR: You came to Memorial Hospital of Garland. What did you think when you came here? You had been in Oklahoma City a good bit, so that's a pretty big city. And Norman, Oklahoma, is getting to be a pretty big place, too. How did Dallas strike you?
GDB: At the time I arrived, there was a lot of construction going on. It was during the real estate boom of the early 1980s. Obviously, the pace was faster than in McAlester in terms of activity inside the hospital, issues that had to be dealt with, and the larger number of subspecialists. I began to understand the needs and issues of the institution. It was a fast learning curve to understand this new environment.
The hospital at Garland was created and chartered in 1959, when there were 18,000 people in Garland; it opened its doors in 1963. The hospital was based on a private foundation model. Max Scheid was president of the chamber of commerce in 1959. The chamber wanted the city of Garland to build a hospital, but they couldn't support it because they had to use most of the tax base to support the development of schools. The chamber raised $1 million from their members, borrowed $1 million, and received a federal Hill-Burton matching grant. From that initial funding, they built the hospital. For the 4 years they were trying to do this, none of them knew anything about building or running a hospital, but they knew people who did. They knew Boone Powell, Sr. They contacted him, and he worked with them for 4 years. He'd meet them out at a little old café in downtown Garland once a month. He never charged them a dime. He gave advice and steered them through the application process for Hill- Burton monies. He helped with resources from Baylor and advised them on setting up labs. He helped get their hospital started. I think that played a large role when the Garland facility merged with Baylor. Most of the board members at Garland had worked with Boone Powell, Sr., when the hospital was being created.
When I came to Garland, the environment was pretty stable. No new physicians were coming into the community. I think there was some concern among physicians about the future— what impact the DRGs and HMOs were going to have on suburban hospitals and whether they would be able to survive. When I tried to recruit physicians, they first wanted to know my vision for the future of the hospital. We weren't having much success at recruiting because of the environment and our size. The HMO industry was growing, and I felt we couldn't compete as an independent hospital even though we had a close alignment with the local industries. Representatives from 52 companies were shareholders of our foundation, and they appointed the board. They were all embracing managed care in the early 1980s. That is how I really became involved in managed care. I was living in an environment that was converting overnight. To recruit physicians and to position us to compete in the future, I started talking to the board about the need to be part of a larger system. We had a couple of retreats with the board, and they talked to the larger employer group about the future of the hospital. Out of that, we decided to start looking at systems we could work with. We visited with Baylor, Presbyterian, and Methodist Dallas. We even entertained the idea of selling the hospital, taking the money from that sale and setting up a community trust fund, and turning the proceeds over to other nonprofit organizations in the community. The companies that started the hospital said, “We got into this for health care for our employees, and we want to continue growing and being involved with health care. Why don't we give it to a larger system?” Boone Powell, Sr.'s involvement when the hospital was created gave Baylor an advantage. The long and short of it is that in 1991, shareholders changed the articles of incorporation to allow Baylor to appoint the board and to change the name of the facility, which in effect gave Baylor control of the organization and allowed it to consolidate all of the assets into the Baylor system. Today, the medical center at Garland is a fully controlled affiliate of the Baylor Health Care System, which gives Baylor all of the upside opportunity and the downside risk of operating the hospital.
WCR: When Memorial Hospital of Garland opened in 1963, how big was it?
GDB: It was 100 beds.
WCR: When you came in 1985, how many beds did it have?
GDB: There were 206 beds.
WCR: You came in 1985 and were the assistant to the CEO. Who was the CEO at the time?
GDB: Terry Andris.
WCR: You were the second in command of the hospital. How many people were in administration at that time?
GDB: Only 2.
WCR: It sounds like the next year you were the CEO.
GDB: Terry Andris had been an assistant to John Shaw, who had been the first administrator of the hospital. When John retired, the board hired Terry as the administrator. He and the board were not functioning well. I had been there 11 months, and they called a special executive session of the board. After meeting for several hours, the board informed me that Terry had resigned as the administrator and asked if I felt comfortable assuming the position on an interim basis. At that time, I was 32 years old and felt sure I could fill in. I had a board meeting within a week to inform them of all ongoing projects. That was in September. In January they named me the CEO.
WCR: You had come out of McAlester and within 11 months you were the CEO at a pretty large hospital in a very large city.
GDB: I really didn't understand the magnitude of what I was stepping into. The facility was established, but new physicians were not coming in. During the first week after taking over, I discovered that no outpatient bills had been mailed in >6 months. Millions of dollars of inpatient records were sitting in the medical records department. The administrator had done away with the requirement for medical staff to complete their records or risk losing their privileges. All of a sudden, the physicians were not completing their medical records, and the charts weren't going up to the business office. Patient bills weren't being processed, and bills weren't being paid.
As payroll was going out that first week I was on the job, I received a call from the bank saying there were insufficient funds to cover the payroll. Our largest pharmaceutical supplier called and put us on COD. Our food vendor put us on COD. They hadn't been paid in months. We had a big situation to deal with at that point. I called a meeting of department managers and explained the situation and asked for their assistance. We created teams around various issues. Individuals working in other departments, for example, were required to help get charts out to the physician offices so that we could get them completed. Everyone really worked together, and we moved forward. It was a good experience and an opportunity to help solidify our team. Most of the department managers had been there for years. The medical staff also rallied around what we were doing. I was very open with them about the situation that we had found ourselves in.
WCR: When you became head of Memorial Hospital of Garland in 1985, how large was the staff?
GDB: We had close to 900 employees.
WCR: Most of those were nurses?
GDB: Yes, clinical positions, environmental services, engineering, etc. We had about 200 physicians. About 20% of all patients being discharged had cardiac disease diagnoses, and we had very little in the way of cardiac diagnostic capabilities. There was a treadmill and that was about it. We didn't have any inhouse echocardiography equipment or catheterization laboratories. Holter monitors were outsourced. Our market was driving by our hospital and going to Medical City Dallas. Garland money helped build Medical City Hospital, because Garland didn't step up to the plate and bring the community the services it needed. I started trying to address that—examining the needs, recruiting physicians, and adding services to serve the people in their own community. Once we became part of Baylor in 1991, I no longer had to explain to physicians whom we were trying to recruit that we were going to have a future; the physicians recognized that Baylor represented a stable environment.
WCR: You were the CEO at Garland for 5 years before that connection with Baylor came about. In that period of time, you made that institution quite profitable.
GDB: Yes. We built up our cash reserves. Our goal was to get back on solid footing to meet the community needs and at the same time to make ourselves attractive to whomever we could potentially work with.
WCR: When the community gave Memorial Hospital of Garland to Baylor, what was it worth?
GDB: Our net asset value at that time was around $11 million. We had about $4 million in cash in the bank.
WCR: Baylor Health Care System didn't put a nickel into it.
GDB: What they did put into it was an agreement with Boone Powell, Jr., who said, “Baylor will support whatever development the community will support.” Whether the money would come out of the Garland funds or the Baylor funds was never discussed. Baylor would see to it that it's done. Everyone at Garland felt that Baylor would be a good steward of the hospital's development.
WCR: That connection has been a win-win situation for both institutions.
GDB: Yes. It's been great. During the first 5 years of our relationship with Baylor, we added 88 new physicians to the medical staff. The population was growing, and we started building the momentum around the medical community. We started putting in new services, expanding our facility. It has been good for Garland and the Baylor Health Care System. Garland has always generated excess cash since it's been with the system. It refers about 45 patients a month to BUMC.
There are good working relationships between the medical staffs at BUMC and Garland. Texas Cardiology Consultants established a presence in Garland by merging with some of the cardiologists there. HeartPlace brought new physicians to the community. Garland's Department of Physical Medicine and Rehabilitation is totally integrated with Dr. Barry Smith's group. Dr. Pete Dysert has been working with Garland and, in effect, his group is managing pathology there. A lot of joint development also has occurred with primary care physicians. The entire HealthTexas organization was born out of our relationships with the physicians in Garland, with Dr. Carl Couch's group.
WCR: When and how was HealthTexas created?
GDB: As we continued in the managed care world in the 1994 timeframe, Drs. Carl Couch, David Winter, and Lannie Hughes (at Dallas Diagnostic Association at Medical City) were looking at creating a physician-owned management services organization (MSO) that could manage physician practices, managed care contracting, and medical management for risk contracts. Dr. Couch talked to me about where things were headed. He said, “We've talked about this MSO development for some time. Do you think Baylor would be receptive to acquiring our practices and working with us? We'll help coordinate physician development around managed care. Ultimately, if we are all on the same side of the fence, we will work better together.” I talked to Boone and Joel Allison, and Dr. Couch visited with them also. Dr. Couch and his group were ready to make a decision very quickly. They were willing to wait 30 days so we could evaluate the situation.
In 30 days, we acquired their 2 clinics and their 10 physicians. They had also been in discussion with Dallas Diagnostic Association and with Dr. David Winter at BUMC. At the time, MedProvider wasn't an entity. Dr. Winter and several other physicians were creating that organization. They were trying to pull the downtown internists together into a legal organization. Both Dr. Winter and Dallas Diagnostic Association contacted me and said they would like to talk about what Baylor had done with Dr. Couch's group. We began the valuation of Dallas Diagnostic Association and immediately closed that deal and brought them in to HealthTexas. Dr. Winter was creating MedProvider, so we didn't have to valuate each of the independent physicians. They coalesced their group, and we then brought their entity into Health Texas. In the first year of creating HealthTexas, we ended up with those 3 groups, which gave us a lot of credibility. We felt we really had top-rate physicians.
We ended up purchasing the assets of 83 physicians from 1994 through mid 1996. Then we started moving our attention from acquisition to operations. Once we stabilized operations, we got into expansion planning through recruitment. We've recruited >200 physicians over the last 4 years. Most of them have been right out of their residencies. We worked to bring them in with the existing practices that we acquired. At the same time, we were trying to build a new culture by tying together the 49 clinics in some way. If you are part of HealthTexas, what does that mean? How do you relate to other members? Do you even know the other physicians in the group? We did things in the first 5 years to build the camaraderie and the culture. I think we have been successful in that regard. While this was going on, I was still running the Baylor Garland hospital.
WCR: When did you resign as administrator of Baylor Garland?
GDB: Between working on the physician network development and managed care operations and continuing to serve the Garland hospital, I was getting home almost every night at 11 PM or midnight and getting up the next morning for 6 or 7 AM meetings. In 1997 I realized that I couldn't do it any longer. I had to give up something. By that time we had many physicians in HealthTexas. They really counted on that organization and were my friends. I felt that I had to place my emphasis on managed care operations and physician network development. We started looking for an executive to replace me at Garland. John McWhorter is there today.
WCR: You still have a lot on your plate. How many physicians are in the HealthTexas Provider Network now?
GDB: We employ 261. In the network we work with for managed care, we have credentialed an additional 1419 physicians.
WCR: What does credentialed mean?
GDB: We will not contract with a managed care company unless it gives us delegated credentialing. This means that we can then credential a physician and present him or her for inclusion in a particular contract. The physician does not have to go through the process with the managed care company again. It is much like the process of getting on staff at a hospital. Once physicians apply for credentials with HealthTexas, we verify their education and training with primary sources. We do reference checks, check the National Practitioner Data Bank, and check with the state boards where they have been licensed. The HealthTexas Credentials Committee investigates any outstanding concerns. This is just like the hospital will do. Then a group of physicians reviews the information and determines whether or not they feel that the physician's credentials warrant being part of the network. They bring that to our board, and our board approves or denies the request. Once physicians are credentialed, we deliver a managed care contract on an opt-in or opt-out basis. We require them to make a cognitive decision to opt in or out. Many networks are set up so that if they don't hear from you in 10 days, you are in. We didn't want that. We want physicians to understand what they are getting into. If they have questions, they can call us for clarification. They must affirmatively tell us that they want to be a provider under the contract. We will then notify the insurance company that that physician has chosen to come through our contract. If he or she is accessing the insurance company through some other direct contract or through another independent practice association, the insurance company will drop those contracts and recognize the physician through our contract.
WCR: They all receive a Baylor check.
GDB: Yes. HealthTexas has several components. First, we have the physician employment model that includes management of their practice. Today in HealthTexas, we have about 1200 employees, including physicians and their staff. Second, we are a managed care contracting organization for physicians who want to be a part of us. Third, we offer consultative services. Today we do monthly financial reports and consultation for the physicians who are part of the 501(a) at Hillcrest Medical Center in Waco and for about 40 physicians at Texoma Medical Center in Denison. Some physicians ask us to do their billing collections and to help them manage their practices. We can go from employment of physicians to just managing their practices, or we can simply offer them consultative services on managed care contracts. We are getting ready to expand that. We are going to develop a service called “Baylor Physician's Services.” Any physician on staff who desires consultation around any businessrelated issue can seek assistance. If physicians on a Baylor medical staff have questions about medical staff privileges or procedures, they will know where to get answers. But if they have questions about their practices, where do they go for assistance? If we can provide them with management tools and information, we can help them improve their practices.
WCR: How do you charge or how will you charge for these physician services?
GDB: We'll work off of a fee arrangement or, once we gain an understanding about the practice, we can estimate what will be involved and then give them a more definitive price.
WCR: This is going to be a major growth area, as you see it.
GDB: And a major change for Baylor. In the past, physicians and administrators have not always been on the same side of the table. The idea came out of a refocusing retreat after the Texas Health Resources merger discussions earlier this year. Joel Allison had 50 or 60 people involved in it—the board of trustees, physician leaders, and senior administrative staff. We created 9 objectives that we are working on now. What we heard from several of the physicians at BUMC—Drs. Warren Lichliter, Göran Klintmalm, Bob Parks, Mike Ramsay, and others—was that the business side of the medical practice today is difficult. By creating HealthTexas a lot of expertise has been created at Baylor, and the HealthTexas physicians appear to be happy and doing well. They asked if Baylor could offer the specialty community some of the same kinds of benefits that have been made available to the primary care physicians. Out of that we started discussions on how we could expand our services.
WCR: So you feel HealthTexas has been a successful development for Baylor?
GDB: It's given us the opportunity to force development where we didn't have a presence, like in Mesquite, Colleyville, Southlake, and Flower Mound. That helps us serve those patients and refer them back to our specialists. Growing areas won't have enough physicians. It's hard to go to a physician on our staff and say, “Would you hire somebody to go over there?” Asking them to recruit someone out of their own pocket is difficult. They will want to know what they will get out of it. In Garland, for instance, we're involved in the development of the obstetrics strategy, and the obstetricians in that community are supportive. The physician community sees what we're doing, that we're not out to harm them.
At the same time, over the last 4 years we've been developing a hospitalist strategy inside of HealthTexas. Our first group was started in Garland. The 7 hospitalists there take care of all the unassigned patients out of the emergency room as well as patients of the HealthTexas physicians who do not want to have a hospital-based practice. We created a hospitalist unit at Irving and then at BUMC. Once the primary care physicians start to understand their practice, receive financials every month, and see where their income is coming from, they start to realize that it's a very unproductive world for them on the inpatient side and they become very supportive of working with the hospitalists.
WCR: Are all the HealthTexas physicians on salary?
GDB: Their compensation is based upon their production. When we started this company, we provided a 2-year guarantee to the 83 physician practices that we acquired. We looked at what their compensation had been, and we came up with a draw for them. We'd make 26 payrolls per year just like our hospital employee pay-period concept, but if their professional production fell more than 20% in any quarter, the executive committee of the group they were assigned to could, in fact, recommend to change to their base draw. After the 2-year period, they moved to a new compensation model that is totally driven by production. All of the physicians today, other than the new physicians that we recruit and set up in practice, are on a production-based compensation program. After the first year, we move the new recruits into a production model as well. Baylor is at risk for all the growth in these practices. In the MedProvider, Family Medical Center at Garland, and Dallas Diagnostic Association groups today, the physicians are compensated just like they were the day we got involved with them: “They eat what they kill.” We isolate them from all the costs related to physician recruitment and startup. That generally costs us about $150,000 per physician. It usually takes 9 to 12 months to get a practice to positive cash flow, but some become productive faster, perhaps in 6 months, depending on the group and how much excess patient capacity there is to spin off to that physician. Our goal for HealthTexas is not for the corporation to spin off a distribution to Baylor, but for all of the money to stay within that company to grow itself. We have development capital from Baylor on the front end from a grant, and Baylor has continued to give us additional grants as we recruited new physicians.
WCR: What do you mean by grants?
GDB: It is money that they are moving from the system over to HealthTexas for development. There is no repayment obligation. Baylor provided the capital to buy the first practices that we acquired. Baylor continues to provide capital to add new services in these practices. All of the assets of HealthTexas are consolidated into Baylor's balance sheet.
WCR: Like what, for example?
GDB: Computed tomography scanners, lab equipment, and buildings. Many hospitals that got into this strategy are now getting out of it. Many people ask why Baylor is staying in this and why HealthTexas is successful. I think there are several reasons: 1) We have great physician leaders who know how to run groups. They want to work in the community with others, and they make group decisions. 2) We have a board of directors consisting of 18 physicians who set strategy and policy and work with us, but they leave the decision making for daily operations (physicians' hours, whom he or she works with) at the individual clinic levels. We can't force a group to employ a physician if the group doesn't feel it's a fit. That is their call. The physicians have exactly the same kind of authority over those hiring and firing decisions as they had when they owned the clinic. What we have done is to try to keep as much local control at the physician clinic level as we can. What we provide them is consultative resources, capital resources, a managed care strategy, and a network for their contracting and purchasing.
WCR: It is my understanding that most of these 261 physicians that you pulled into this network are quite happy.
GDB: I think they are.
WCR: They are happier than they were on their own?
GDB: They are better off than when they were on their own—financially and culturally. They have more free time. They are more organized. We have tried to educate them, work with them to understand the business they are in. We don't want to run their business; we want them to run their business.
WCR: When you say 261 physicians are on salary, they may all be on different salaries after a year or two. They determine what their income is going to be. It's based on how much they are bringing into the network.
GDB: Right. We have tried to also develop ancillaries in the clinics. Many hospitals that got into this strategy stripped all the ancillaries out of the practice. It would be like saying to the physicians, “Okay, we now own this practice, and you no longer need a mammography unit, an x-ray unit, or a lab. Send all that work over to the hospital.” Hospitals that did that created practices that are losing large sums of money. We tried not only to leave the ancillaries in place but to expand them. We feel it is good continuity of care. For example, if I am seeing my primary care physician and I need a chest x-ray, I can get it right there. I don't have to go to the hospital.
WCR: Do you think that you will garner more specialists with time? I've said through the years, for example, that cardiology would change a great deal if cardiologists were on salary. Do you think that will come about in the foreseeable future?
GDB: If the environment continues with all of its hassle factors and if physicians do not organize themselves, then yes, I think that they will embrace a different model. HealthTexas and Baylor as a whole are involved in a study with Electronic Data Systems (EDS). The technology exists today to solve many of the administrative problems that are of concern for providers; the problem is in organizing physicians, hospitals, and payers to work together to use it. The concept we are trying to promote is the ability to load the benefit information for a particular employee as well as his or her demographic information onto a smart card. For example, I come to my physician and I've chosen Aetna. The plan I am under and its benefit design have been loaded onto that smart card. I swipe my card at the office and it goes through the Internet to Aetna, which electronically verifies eligibility. Today, physicians go through a telephonic exercise. Tomorrow, we hope to get immediate electronic eligibility verification.
We want the physicians to be able to input the information from a patient encounter and then wirelessly transmit it through a palm device. That claim could then go through the Internet to the payer, who would coordinate the benefit and, while the patient is there, indicate how much the insurance company owes and how much the patient owes. Also, we hope to get a financial institution to agree to fund the unreimbursed part of that transaction. The physician could be paid in 48 hours just like a retail merchant, and the accounts receivable would go away. Through that same kind of technology, we can get to electronic referral authorizations.
Will everybody play? We must come together to make this happen. Joel Allison, Boone Powell, Dr. Dysert, Bill Roberts in HealthTexas, Tim Parris, and I are all working on this. The large payers say that telephonic eligibility verification and referral authorization take a huge amount of manpower and cost them a lot of money. We've had Humana visit with us at EDS around these concepts, and we have meetings scheduled with Aetna and United as well. The other thing that is driving our desire to change right now is the Health Insurance Portability and Accountability Act (HIPAA) and all the standardization and automation that's going to require. We're running into the first 2 pieces of the HIPAA legislation next year. The Internet is allowing a lot of this development.
EDS has the systems and intellectual capacity to take this on. The technology is there already with the handheld devices. It's just a matter of getting the technology partner we want, getting the insurance companies to agree to process their transactions electronically, and getting the providers to use the technology. By January 2001, we hope to set up a test site in the HealthTexas practices and demonstrate whether or not it can be done. If it can be and we can get the payers to cooperate, it could be a huge paradigm shift for the industry.
WCR: What is your vision of managed care? Is it going to continue? Is it going to grow? What is going to happen to it?
GDB: Managed care is just insurance. It's arranging the payments for services rendered. The payment and the management of the care are going to change. Today, most private health care insurance in the USA is being paid by employers. This came about because during World War II Congress imposed a salary freeze in the USA. Although employers couldn't increase their wages, they could give benefits. They started giving health insurance as a benefit. We've been in that model ever since.
The employers have offered a defined benefit. They decide on the insurer and coverage and pay part of the premium; the employee enrolls. This model has worked well. But we are beginning to transition toward a defined contribution instead of a defined benefit. Employers don't want to decide what benefit design is right for their people. Why can't employees participate in that decision? Why can't the employer contribute a certain dollar amount and allow employees to design their own plan? How much copay and deductible do they want? How much pharmaceutical coverage do they want? Dallas employers are spending millions of dollars buying health care for their employees. Then the hospital will drop out or the physician network will change, and the employer is caught in the middle. At the same time, costs continue to go up. Typically the management of managed care is not about medical management; it is about price control—trying to push people into lower cost areas and to obtain discounts from physicians and hospitals. We are going through that now.
I think that as the employees make more decisions about their benefit design, they will also make more decisions related to their medical management. If more of the cost is going to come out of their pockets, they will probably shop a little more and try to better understand where they want to spend their money. With the use of the Internet, people will probably begin looking at outcomes of care and making decisions based on them. Health care costs are going to continue to go up. I predict that employers are going to deal with it by limiting the amount of money they give employees. The “Mother, may I?” environment that we have gone through with HMOs will go away. People also want choice. HMOs' requirement to first go through a gatekeeper and then to a specialist is not acceptable. People are willing to pay a little more for choice.
As a health care industry, we have to get our administrative costs down. We do that by moving more into automation. Right now, when we want to send somebody in for a computed tomography scan, we have to get an eligibility number and a preauthorization and then go through the process of getting paid for the claim. If we can automate, we can avoid a lot of cost just as the insurance companies can. Right now, the health care industry has about 25% administrative costs. A highly regulated industry like the airline industry has 8% administrative costs. Most industries are at 2%, 3%, or 4%. Health care still hasn't moved into the level of information technology that will be necessary because hospitals and physicians haven't been willing to pay for it. As an industry, we spend 2.5% to 3% of our revenue on information technology, while financial institutions spend approximately 11%. We're lagging as an industry in information technology. As the Internet grows and as the cost of the technology continues to come down, there's a great opportunity to move faster around information technology.
WCR: What do you think the Baylor Health Care System is going to be like 10 years from now?
GDB: We're blessed that we are in a growing community and that we are going to double the population in the next 25 years. There is going to be a shortage of beds and physicians—an access problem will exist. All hospitals will be full. The length of stays will continue to go down. We'll see stays of 2 to 3 days where today it is 3.5 to 4.5 days. We will see hospitals becoming more tertiary with more intensive care–driven monitored hospital beds. More surgery will move to the outpatient clinics. A group in Georgia says that in 2010 the cost of pharmaceutical care in the USA will exceed the cost of inpatient care.
Hospitals have received enormous payment reductions from the government. The Balanced Budget Act took some $198 billion out of the health care industry nationwide from government payments. Politicians are not lining up to restore those payments. The Medicaid payments in all states are declining because the federal match isn't there and the states are not willing to increase their contribution. We have a growing number of uninsured persons across the nation, heavier in Texas than in the nation as a whole. The hospital industry has many fiscal challenges to take care of.
At the same time, our physicians have that same dynamic working against them. They get hit with the same reimbursement issues. If you look at most specialty physicians from 1991 through 1996, their professional fees from Medicare were reduced 40% to 60%, depending upon the specialty. Only family practice physicians received any kind of increase from Medicare. Even payments to internal medicine physicians dropped about 15% during that timeframe. Most of the HMOs and preferred provider organizations were indexing their payments to physicians based on what the government was doing. As the government reduced its payments, so did the commercial insurance companies. The decline in reimbursement for physicians continues. Physicians have extended their hours of service. Some have merged to reduce office costs, and some have started Saturday clinics. They have overcome some of the reduction in payment, but their expenses keep going up, their malpractice insurance premium goes up, and the wage index goes up. We are seeing some elasticity in price today from the managed care plans so they can give a little increase to the provider community, but it has not kept up with the higher rate of inflation that is occurring in health care. So what do the physicians do? They begin to get into ancillary revenue development to supplement their professional fees.
You asked me where I see Baylor in the next 10 years or so. I think we have to partner even more with our physicians. Examples are the new Heart and Vascular Center and what we have done with US Oncology, or PRN at the time. How can we work with the physician community so that they can thrive at the same time we do? As US Oncology expanded its outpatient oncology business, its outpatient volume increased and so did our inpatient business. Hopefully, the Heart and Vascular Center will allow the cardiology community to increase its earning capacity in the same way. We will be prepared for the future to the extent that we can partner with our physicians. Today we have 12 ambulatory surgery centers in partnership with physicians, and 2 more are being built. Several of us have been working on that strategy for the last 31/2 years. Baylor is very well poised because of the experience that we've had the last 6 or 7 years with the partnerships that we have created. We've developed physician relationships that have created trust. Our system board and the boards of the community hospitals are very proactive in their desire to partner with physicians. Our physicians can be our biggest partner or our biggest competitor. Venture capital is available to organize physicians. We can do the same thing and do it better because we know health care. I predict that 10 years from now Baylor will still be a not-for-profit organization, but a large part of our business will be generated from joint venture–type relationships with physicians. There will be short inpatient stays and considerable outpatient-driven volume for the organization.
WCR: You've been involved in many different things, particularly since you have moved to Dallas. Your arenas have expanded considerably. At this point, what accomplishments are you most proud of?
GDB: I'm very proud of the turnaround we accomplished at Garland and the expansion of that hospital. When I started, the gross revenue of the hospital was $19 million; today it is >$200 million. I'm proud of the relationships I've developed with the physician community and the fact that I'm considered a colleague and not somebody they have to put barriers around. I'm extremely proud of HealthTexas. It has been the hardest work that I've ever been involved in.
I'm proud of my family. My son, Garrett, is 17. He's a junior this year at Naaman Forest High School in Garland. And my wife, Debbie—we've been married 25 years, and she has tolerated all this madness. It's a lot of work, and I'm often away from home.
WCR: What is your son going to do?
GDB: I don't know. He's a good kid. He's a good golfer. He has great social skills. He's a good student. He wants to go to OU, where my wife and I went. I don't know if he says that because that's what we've always talked about or not. Who knows what he will do?
WCR: Does Debbie work?
GDB: She did. She was an elementary school teacher. She quit teaching when our son started middle school. We felt it was important for her to be available for Garrett.
WCR:When you were still CEO at Baylor Garland and were involved in the HealthTexas Provider Network and the managed care operations for the whole system, you would get home at 11 or midnight and would have a 6 or 7 AM meeting the next morning. What is your life like now? What time do you wake up in the morning? What time do you get to the hospital?
GDB: I get up about 5:30 AM every day and usually leave for work by 6:30 or 7 AM. On Tuesday mornings, I arrive at 6 AM, so I get up at 4:30. I am usually home around 8 or 8:30 PM. I've got a 45-minute to 1-hour commute in and an hour commute out. When we were starting HealthTexas and I was managing the hospital at Garland, I'd stop at Garland on my way home and take care of business and leave it for the secretaries to handle the next day. I don't have that responsibility to worry about anymore. On Fridays I try to get home about 6 PM. I try not to work at all on the weekends, except for retreats. I try to spend time with the family and do chores on the weekend, get caught up.
WCR: Do you have hobbies, Gary?
GDB: My hobby is traveling. I love traveling (Figure 6).
Figure 6.
Gary, Debbie, and Garrett Brock on an Alaska cruise in July 1999.
WCR: How much time do you take off a year?
GDB: In the summer we usually go to Europe for about 16 days. I love going to Europe. Nobody can find me, and I can't work. We generally try to study the country that we are going to visit in advance and then once we are there, really deal with it in depth.
WCR: Your life now must surprise your parents a bit. They are still alive. I imagine they never had the opportunity to travel in the USA, much less abroad. Right?
GDB: Every summer when I was a small kid, my dad would load us all in the car, and we'd take off for 2 weeks and go west. We were able to go up to Yellowstone, over to San Francisco's Golden Gate Bridge, and through New Mexico and Arizona. We traveled quite a bit in car trips. They have some idea of what I do and know that Debbie and I have been successful in what we're doing.
WCR: You've been involved in so many different activities since you got into hospital administration. You obviously are a hot number in the hospital arena, I would expect. How long is Baylor going to be able to retain you? What do you see for the future?
GDB: I enjoy Baylor. I like the organization's values, and I like the people I work with. I'm proud of the medical staff, and I enjoy working with them. I'll stay at Baylor as long as I can make a contribution and can grow and learn. What I look for in a job is inclusion in decision-making processes and recognition for the work that I do in terms of being adequately compensated and having opportunities to continue to move up. I want to be in an organization that's reputable, that has values.
Ever since I've been involved with the system, it has been one growing opportunity after another. The medical staff consultative services that we are getting ready to kick off will be a great growth opportunity. I'm enjoying getting involved again with the community hospitals. The growing population will present significant opportunity for Baylor to expand. I know where Joel is coming from and what his vision is for Baylor. He will be a stable leader at Baylor, so I know where the future is headed. One of the challenges is how we transition and bring in new physicians to take key leadership roles as some physicians retire over the next 10 or 15 years.
I like the community at large. I like living in the Dallas area. My wife's parents have retired and live now in Garland. My wife's sister and her family live there as well.
WCR: You want to be where you can make a difference?
GDB: The road I've always been on is to try to get involved where I can make a difference. Growing up was that way. My dad always told us that we were going to come up against a lot of challenges in life. When you look back over your life, probably 2 or 3 of those challenges really made a difference, while the rest were just tweaking the wheel in keeping things going. I try to keep focused on that, because you can get caught up in an issue that isn't going to matter 5 years from now.
How do you just get through that issue today? I think Joel, Boone, Jr., Tim, and I all understand the business we are in and that it is built around the physician-patient relationship. Maximizing that relationship will keep us doing what we need to be doing. We've got to keep everything in balance and stay focused. Stay consistent, try not to vary a lot, communicate effectively, move forward—if we do those things as an organization and as individuals, we'll be very successful.
WCR: You are very optimistic about the future.
GDB: The community, the environment, the growth we're in, the clinicians, the partnerships, the board will all allow us to do the cutting-edge things that will make us successful. The leadership team that Joel has put together is relatively young, and we work well together. The relationship with our physicians is a trusting one. We are in a great situation to really thrive. Many hospitals will survive, but Baylor will thrive.
WCR: You are glad that the merger with Presbyterian and Harris didn't come about?
GDB: That was an experience that we had to go through. We had to determine whether or not the systems would be better off together or independent. We were blessed that it took so long to answer that question. The culture question started to appear: there were differences in the way the organizations were being led and managed and in the types and levels of service that were being delivered. The Balanced Budget Act came along, and that wasn't on our screen when we entered into those discussions. That was a $165 million hit to Baylor over 5 years. Texas Health Resources experienced more payment reductions because it is a larger system. We were looking at the ability to save about $100 million by putting these systems together and reducing costs. Then the attorney general's staff was saying that they wanted more benefits for the community. They were looking for additional charity care above and beyond what we were providing beyond the statutory requirement in Texas. We were being asked to freeze our prices for 5 years, including all managed care negotiations. But even if we froze the prices on the provider community, we knew the payer community wouldn't lower the rates in Dallas to the employers. In essence, that would take money from Dallas and send it to Wall Street. At the same time, we were seeing the insurance companies raising their premiums, and we were just coming off of 7 years of inability to raise any price with the managed care companies. So we had been flat for 7 years and now we were being asked to remain flat for 5 more years. We would have depressed our system for 12 years of any revenue enhancement opportunity. That would have really depleted our ability to create capital to invest. At the same time, we were operating in a huge technological shift, with a lot of information services requirements for us.
We suddenly understood that it couldn't work. The boards looked at that and they also looked at other health care systems that had merged around the country. The ones that had merged and were still together had not achieved what they had envisioned and were losing money. Several had begun to unwind at huge costs. The shifts in the regulatory environment and in the health care industry that occurred while we were considering the merger were not supportive. Backing off was a difficult decision to make.
The board members from Baylor Health Care System, Presbyterian, and Harris Methodist are all outstanding, philanthropic citizens, volunteers who all knew each other. They were friends doing their civic duty in different organizations. These trustees were sitting across the table from each other as friends trying to unwind this deal. We had all invested heavily in this. You can imagine over a 3-year period how much staff time we had spent, as well as money for consulting fees, legal fees, and accounting fees. And all of that was getting ready to be written off. It's hard once a ball gets rolling to back off. It took a great deal of courage on the part of those trustees to say that we were probably better off staying independent and collaborating where we can. That was the decision that was made. I think it was a great decision. We wouldn't be where we are today if we had merged. We all benefited from the experience, and that was good.
During the negotiations, I was involved in trying to organize the physician community with Drs. Pete Dysert, Jack McCallum, a neurosurgeon out of Harris, and Thomas Russell, an anesthesiologist at Presbyterian. I provided staff support to them and organized an attempt to bring together the physician community of the 3 systems to develop a strategy that could come up alongside the hospital system that was coming together. Out of that we created a business league and actually incorporated an entity called Texas Health Alliance, a 501(c)6 corporation. We had physicians from all 3 systems working on that. We developed a business plan to move forward with the hospital systems. In fact, the ideas set forth by Texas Health Alliance are being used in our current discussions with EDS.
An interesting thing from the Baylor/Texas Health Resources discussions occurred when we held the first physician meeting. We brought together >200 physicians from Baylor, Presbyterian, and Harris who were selected from their respective medical staffs as physician leaders. We spent a weekend with them as we began to develop a strategy. What was interesting about that is most of them knew each other. Many of them had gone to Southwestern Medical School together or had done fellowships or residencies together. They had referred patients to each other over the years. What I saw happening was that bringing the physician community together was probably going to be easier than bringing the hospital community together. We gained a lot of ground there, and I think we developed a business plan that will be actualized. And the physician community across the metroplex will benefit from that work.
WCR: Is the system partnering with groups other than physicians?
GDB: On January 1, 2000, we will move all of our property management and engineering services over to management in a partnership with Trammell Crow Company. Property management is not a core business of ours, and yet we live here in Dallas where we have one of the largest property management companies in the USA. They know that business and can bring resources to the table and improve our situation.
Our downtown campus and our campus in Grapevine have partnered with Marriott to do a food/nutrition program. Tim and I, as the operations arm of Baylor, now want to try to extend that concept across Garland, Waxahachie, Grapevine, Irving, and BUMC using a common vendor. Again, they would run our food/ nutrition business and we would then manage that partnership and not the day-to-day work in that area.
The same thing is true in environmental services. Garland is with Marriott today, and the other hospitals have their own in-house programs. Can we partner with a company that concentrates only on environmental services? Those companies get up every day, and that is all they do—environmental services or food service or property management. These services are on our screen every day, but they have to compete for management's attention with the myriad of other issues that are occurring daily.
Our architectural firm, Healthcare Environment Design (HED) is a profitable company, but it is not a part of Baylor's core health care services. To keep itself whole, HED has to take on more outside work than Baylor can give it to cover its expenses. The question becomes: Does Baylor really need to own an architectural company? I think we decided that no, we probably don't. Odell and Associates are acquiring HED. Again, it will be our preferred architectural firm, but we will no longer own that company.
We sold 90% of our home care business to MedCare@Home. It is a service that we need in the continuum of care, but it's not a service that we get up every day and focus our entire attention on.
We did the same thing with our durable medical equipment. We are partnering in areas where we think we can bring new expertise to the table and also bring new opportunities for our employees. If I'm an engineering employee at Baylor, my sphere of upward mobility, if I want to stay at Baylor, is pretty limited. We have 180 people employed in engineering services across the system. But if I'm now a Trammell Crow employee, I've got upward mobility across the country because it has property all over the USA, and I can move up in my career without losing my seniority and my benefits vesting. This is going to be good for our employees as well. We are focusing on how we can we get back to our core business. Our core business is supporting the physician-patient relationship. We can maximize that by partnering with others that can come in and provide those services better at less cost than we can. It will be very beneficial for us in the long term.
WCR: Gary, is there anything you think we ought to discuss that we haven't?
GDB: I think we've covered quite a bit of territory, probably more than you wanted to hear.
WCR: Gary, on behalf of not only myself, but the readers of BUMC Proceedings, I want to thank you very much for pouring your heart out, so to speak, and being so open.
GDB: Thank you.