Last week, Houston lost one of its remarkable citizens — S. Ward “Trip” Casscells — to prostrate cancer at the age of 60. Dr. Casscells was a renowned cardiologist at the University of Texas Health Science Center in the Texas Medical Center who spent the final ten years of his life battling prostrate cancer while serving his country in a variety of important roles. The video below provides a glimpse of his incredible story. We in Houston are blessed to have known Trip. He will be missed.
Lynda Chin of M.D. Anderson’s Department of Genomic Medicine.
The Chronicleís Todd Ackerman and Loren Steffy did a good job in this weekend article of chronicling the series of bad bets that Baylor College of Medicineís Board of Trusteeís made in the wake of the schoolís unfortunate 2004 divorce from The Methodist Hospital. Baylor Medís travails have been a regular topic on this blog, most recently here.
The elephant in the parlor of Baylor’ Medís financial problems is the $600 million in bond debt that Baylor Med incurred in connection with its currently mothballed hospital project. Indeed, the difference between the total bond debt and the value of the underlying collateral would gobble up a large chunk of Baylorís endowment, which is currently a tad under a billion dollars. That was enough to scare off Rice University, although I question whether that was the right long-term decision for Rice.
So, the future is bit cloudy for Baylor. But what Iím wondering is whether there is a local partnership that could bail Baylor out of most of current problems while providing an essential benefit for the Houston community?
The last time I look into the issue, estimates in the Houston metro area has one of the largest percentages of uninsured residents in the U.S. (over 30% versus a national average of about 16%). The Harris County Hospital District ultimately ends up with the issues involved with financing indigent care as well as ensuring that adequate medical facilities exist for local citizens.
Given the HCHDís projected need for facilities to keep up with the growth of the Houston area, it makes sense for the HCHD to engage Baylor in discussions over a partnership in which HCHD would make an investment in the hospital in return for Baylorís agreement to staff the institution as its primary teaching facility.
Baylor and the HCHD already work closely in connection with the staffing of the Ben Taub Hospital trauma unit in the Texas Medical Center. A pure teaching hospital for Baylor would provide a quasi-public, low-cost alternative to the Med Centerís impressive but expensive array of private hospitals.
Sure, the details would have to be worked out, such as management of the facility. But doesnít such an investment by the county make sense, particularly when compared to ones such as this?
In theory, the deal makes sense. Both are top-notch academic institutions with campuses within a stoneís throw of each other. Each institution would have given the other something that it needs. Baylor would have gotten the financial support of Riceís multi-billion dollar endowment, while Rice would have landed a strong scientific research and clinical care center in one of the nationís leading medical institutions, the Texas Medical Center.
Although Rice President David Leebron supported the merger, large segments of the Rice faculty and alumni opposed the deal, primarily on financial and cultural grounds. Indeed, my sense is that Leebron quit pushing the Rice Board of Trustees to approve the deal when it became apparent that a consensus of Rice constituencies were opposed to the marriage.
And Baylor clearly finds itself in precarious financial condition, not completely of its own doing. After its 54-year teaching hospital relationship with Methodist Hospital soured in 2004, and a subsequent deal with St. Lukeís Episcopal Hospital did not work out, BCM decided on a plan to go it alone and build its own teaching hospital.
However, the ambitious deal has been pretty much a disaster from the start. After floating almost $900 million in bonds to finance construction of the hospital, Baylor announced last year that it was temporarily suspending construction of the hospitalís interior as it works through its financial problems.
Meanwhile, BCM has lost over $300 million since the split with Methodist. Inasmuch as Baylorís endowment is less than a billion, those kinds of losses have placed BCMís financial condition at risk. Already in in technical default on multiple bond covenants, BCM is now facing the prospect of hiring a bondholder-required ìchief implementation officerî to oversee an overall financial reorganization. That would have been avoided if the Rice merger had succeeded.
Thus, Rice certainly had understandable reasons for passing on the deal.
Nevertheless, I wonder ñ did Rice make the right decision?
Despite its financial woes, BCM remains one of the elite medical and research institutions in the U.S. The merger would have undoubtedly brought a substantial increase in research funds in such fields as bioengineering, neurobiology, nano-biotechnology, stem cell biology and gene therapy. Although Rice would have been subsidizing BCMís financial problems in the short term, my sense is that the increase in research resources flowing to Rice over the years would ultimately make that bailout well worth it.
But even more importantly, Rice passed on an opportunity to take a calculated risk that could well have elevated Rice, BCM, the Texas Medical Center and Houston to the forefront of medical and scientific research in the world.
Despite the risks, that kind of upside doesnít come around very often. Failing to realize that is one of the key reasons why Texas has lagged badly behind states such as California and New York in the development of Tier 1 research institutions and all the benefits that such institutions provide to the state and its communities.
Thus, Rice is keeping its chips and betting that it can develop its scientific research just fine without BCM. But if I were to place a bet on which institution is closer to the cutting edge of such research after the next 25 years, Iím still putting my chips on Baylor.
Over the weekend, the Chronicle ran this story about Harris County officials considering an idea to convert the Astrodome into a planetarium and a medical and science education facility. It’s actually a good idea and one that was suggested here months ago. Given the Dome’s proximity to the Texas Medical Center, a county/med center partnership to turn the Dome into the premiere medical/science educational facility in the world makes a lot of sense.
On the other hand, the financing of such a project is not going to be easy, particularly in this economic climate. Nevertheless, given the potential benefit to Houston of becoming a leader in medical/science education, hopefully county officials will give this proposal a fair shake. It certainly makes far more sense than the alternative proposal.
Common sense aside, everyone needs to realize that this new proposal could effectively be scuttled by the financial commitments that have already been made in connection with Houston’s previous poor public financing choices. That risk reminds us that such poor utilization of resources ultimately has consequences. It could a harsh irony if Houston’s most well-known landmark is a victim of those bad choices.
The Chron’s top-notch Medical Center reporter Todd Ackerman reported yesterday that two venerable Houston academic — Baylor College of Medicine and Rice University — are in preliminary discussions regarding a possible merger (the Chron’s excellent Science reporter Eric Berger also comments here).
This makes sense on many levels. Baylor and Rice are located near each other in the Medical Center area, so sharing faculty members between the two institutions would be a snap from a logistics standpoint. Indeed, the attraction of being able to teach and research at both institutions would be a valuable perk for both schools to attract talented teachers and students. Both schools have excellent academic reputations, so it’s a good match from that standpoint, too.
But Ackerman zeroes in on the main problem with the merger. As usual, it involves money:
Rice is the more affluent of the two institutions. As of June 30, its endowment was $4.6 billion. As of Sept. 30, Baylor’s was $954 million. [. . .]
One Rice professor said the key issue from the university’s perspective will be making sure there’s a firewall between Rice’s endowment and Baylor’s.
A "firewall" between the two institutions endowments? Come on, one of the main reasons why the merger makes sense is that Baylor would have access to Rice’s superior capital. The benefit from Rice’s standpoint is the association with a fine medical school that, with access to a better-capitalized endowment, may well propel itself into the best medical school in the country. That is precisely the type of academic excellence that Rice should be pursuing.
Which reminds me of a conversation that I had years ago with a member of the University of Houston Board of Regents. Given the need of Houston and Texas for more Tier 1 research institutions, I observed to this UH regent that I thought it was a good idea for the UH system to merge with the Texas A&M University System.
One one hand, the merger makes sense from UH’s standpoint because it would provide the chronically-undercapitalized UH (endowment about $750 million or so) with access to capital (A&M’s endowment is between $6-7 billion) that is the biggest obstacle in UH’s path to Tier 1 status.
On the other hand, the merger makes sense from A&M’s standpoint because UH would provide A&M with the urban presence that it has always lacked and UH’s central campus in Houston that A&M could use as a carrot for attracting better teachers and students. Moreover, A&M for years has desired a law school and UH would deliver a very good one.
So, I asked the UH regent, such a merger makes sense, doesn’t it?
The UH regent proceeded to give me a half-dozen reasons why the proposed merger would never work, most of which were tied to the fact that he would no longer be a member of an independent university system board if such a merger were consummated.
That is precisely the attitude that has placed Texas behind states such as California and New York in the development of Tier 1 research institutions and all the benefits that such universities provide to the state and its communities. Here’s hoping that similar attitudes don’t scuttle what appears to be a very good idea for Rice, Baylor and Houston.
In this recent post on the death of Michael DeBakey, I noted that a substantial part of Dr. DeBakey’s legacy was his involvement in the massive importation of talented medical professionals to Houston over the past 60 years. That talent transformed the Texas Medical Center from a sleepy regional medical center into one of the largest and most dynamic medical centers in the world.
Dr. Ralph Feigen, who died at the age of 70 on Thursday,epitomizes the doctors who have been at the center of that transformation.
Drawn to Texas Children’s Hospital and Baylor College of Medicine at the age of 40 in 1977, Dr. Feigen spent the rest of his life in Houston cultivating a culture of excellence in research and patient care that turned Texas Children’s into one of the largest and best pediatric hospitals in the world. Dr. Feigen was an excellent teacher, superb clinician and a highly-regarded researcher, but his personal warmth for his patients is what thousands of parents and their children will remember most about this fine man. A large part of Dr. Feigen’s legacy is that Texas Children’s — despite its enormous growth over the past 30 years — still reflects the comfortable warmth of its long-time leader.