September 23, 2002

Resolution proposed for San Antonio hospitals
___By Marv Knox
___Editor
___SAN ANTONIO--The proposed sale of Baptist Health System of San Antonio to a for-profit company moved forward Sept. 18, when the Baptist General Convention of Texas' Human Welfare Coordinating Board "reluctantly" signed off on the deal.
___The recommendation to sell Baptist Health System to for-profit Vanguard Health Systems of Nashville, Tenn., will be considered by the BGCT Executive Board Sept. 24.
___Baptist Health System operates five hospitals and has struggled financially for several years. The system is owned by the BGCT, which elects its trustees.
___Acting on behalf of the BGCT, the Human Welfare Coordinating Board urged the Baptist Health System board of trustees to consider an offer from Valley Baptist Health System, which also is owned by the convention.
___But Baptist Health System trustees voted down three Valley Baptist offers, sticking with the more lucrative Vanguard offer.
___Vanguard proposes to pay off $174 million in long-term debt, fund $28 million in debt that is due next year, spend $200 million on capital expenses between 2003 and 2008, and provide about $100 million to support Baptist ministry in San Antonio.
___The last part of the deal could create a non-profit organization, Baptist Health & Family Services, from a merger with the BGCT's San Antonio-based Baptist Child & Family Services.
___The Valley Baptist proposal offered $60 million over three years, including $50 million the first year. It also pledged $203 million for capital expenditures and asset acquisitions in the next six years, guaranteeing $100 million within the first three years.
___Both groups made overtures to keep all five hospitals open, singling out downtown and southeast locations, where the system provides most of its charity care.
___The Baptist Health System issue made headlines in San Antonio, particularly as discussions with the Human Welfare Coordinating Board and Valley Baptist dragged out.
___Community and medical leaders pleaded for the sale to Vanguard. The BHS medical executive board endorsed the Vanguard proposal. A group of doctors threatened to sue and to take their patients to other hospitals if the Vanguard proposal were not accepted.
___The BHS board of trustees also implied it might lead the system to withdraw from the BGCT if the Vanguard option were not approved.
___In a two-hour conference call Sept. 18, the Human Welfare Coordinating Board "reluctantly gave consent" to the Vanguard sale, reported Becky Bridges, the BGCT's communications director. The vote was 11-2, with two absentees, she said.
___Both Earl Cutler, chairman of the BHS board of trustees, and Charles Wade, executive director of the BGCT, stressed the goal of all negotiations was to find a solution that was best for San Antonio. The differences in finding that solution revolved around the merits of maintaining ownership by a not-for-profit organization within the Baptist denomination versus obtaining the strongest financial offer.
___"Our hope as a board was to find a capital partner who would be as committed as we are to support our faith-based mission, the San Antonio community and to ensure the long-term operation of the Baptist Health System," Cutler said. "In Vanguard, we have found that partner."
___The new system's seven-member board is to include three BGCT representatives, he said. "We are not giving up the system."
___For example, the three members of the board will have "extensive reserve powers," in effect to veto hospital closings or other actions the BGCT could not support, Cutler added.
___Vanguard also made other concessions to maintain the historic Baptist Health System mission in San Antonio, he said. These include a commitment to provide the same percentage of charity care historically offered by BHS, appointment of a vice president for ministries and a fully supported chaplaincy staff, preservation of the Baptist name and policies, such as opposition to abortion, and appointment of a Human Welfare Coordinating Board subcommittee to review the final Vanguard contract.
___"All these things are seamlessly equivalent to the mission and service of a not-for-profit hospital organization," Cutler said. "The only thing is it will be investor-owned. ... There's no change in any health-care policy decisions the convention would like to see in place."
___Wade expressed appreciation for the work of the Baptist Health System trustee board.
___The Human Welfare Coordinating Board and many BGCT leaders wanted to preserve non-profit status and to keep the hospital system within the Baptist family because of their understanding of Christian calling, Wade explained.
___"What was important to me was that healing ministry is at its essence a ministry of Christ," he said. "Jesus healed the sick, bound up the wounded, comforted the suffering. And Christians want to do that. That is our commission. We believe that can be done best within a faith-based--and in our case, Baptist--institution.
___"As important as money is to a health-care system, the Christian leadership and culture of the organization is very significant."
___Wade affirmed the Human Welfare Coordinating Board for its efforts. "They worked very diligently to try to find a way that the hospital system could be saved--that the system could receive the financial stability it needed and the people of San Antonio could get the top-quality health care they need."
___He also lauded Valley Baptist Health System for its creative efforts. "One of our fine hospitals made a courageous effort to find a way to resolve this issue."
___Cutler echoed those sentiments. "I thank our colleagues at Valley Baptist Health System for their interest and concern in providing us a proposal to consider," he said. "We know it's been a contentious thing. ...
___"We are appreciative of Dr. Wade and his office for their patience," he added. "We've been at this for over a year, and they've been working with us the whole way."
___Wade and Cutler also pledged to work together into the future.
___"Now, we are prepared to make the best of this and try to preserve quality health care and Christian ministry in the hospitals," Wade said. "We will use the dollars that come to us with our Baptist people in San Antonio to provide significant ministries to the needs of people in the years to come."

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