Harris Health seeks to restructure contracts

Hospital district has 5 years to negotiate deal with Baylor, UT

The board of the Harris Health System, the county’s safety-net hospital district, voted Thursday to give its two Houston medical school partners notice it is terminating their long-standing contract, a hugely disruptive action if the three institutions can’t agree on a new deal.

The vote triggers a five-year wind-down of the existing agreement, during which time Harris Health and Baylor College of Medicine and McGovern Medical School at UTHealth will work to negotiate a new one, said Harris Health CEO George Masi.

“We’ve been operating and negotiating based on a contract, developed more than 25 years ago, that’s lost its relevance given the changes in health care in recent years,” Masi said. “It’s better to clear the deck — no harm comes to anyone in the short run — and start anew.”

Masi said the action was “not cataclysmic” but acknowledged it puts pressure on the schools to negotiate because “it’s now a timesensitive issue.” He said Harris Health has “felt most of the pain” under the existing contract.

The three institutions had been in talks and negotiations for the past 18 months. Masi said it had it become “obvious we weren’t making the kind of progress we needed to be making.”

Under the agreement, Baylor doctors staff Ben Taub and McGovern doctors staff Lyndon B. Johnson, Harris Health’s two large acute-care hospitals. The hospitals also provide the most important training ground for the schools’ residents and medical students.

Baylor and Ben Taub have been partners since 1966, McGovern and LBJ since 1990.

Surprisingly, there was little official reaction at the two schools, just emails to the campus communities announcing Harris Health’s action and putting a positive face on it. The Baylor email was signed by Masi and Dr. Paul Klotman, president of Baylor College of Medicine.

“We intend to begin work on a new agreement as quickly as possible and pledge to continue the delivery of high quality care to all our patients,” the letter said. “In addition, we will together sustain ongoing support of training of medical and health professions students as well as our residents and fellows.

Dr. Giuseppe N. Colasurdo, president of UTHealth, assured employees UTHealth is still operating under the provisions of the current contract and doesn’t anticipate any immediate changes for its faculty physicians and trainees.

“We will continue to work closely with Harris Health and Baylor as we redefine our partnership and seek to create a new affiliation agreement and service contract,” wrote Colasurdo. “We remain committed to providing exceptional health care to the Houston community, and the very best training opportunities to our students and residents.”

Neither president responded to Chronicle interview requests.

It is unclear whose doctors Harris Health would tap and where Baylor’s and McGovern’s would go if the parties can’t agree on a new deal. The schools provide 2,200 credentialed doctors, not including residents, who provide care at Ben Taub, LBJ and Harris Health clinics around the county.

The University of Houston wants to open a medical college in fall 2020, but it still must be approved by the Texas Higher Education Coordinating Board and the state Legislature and accredited by the Liaison Committee on Medical Education. It would also take years for it to build a large clinical staff.

But Masi said Harris Health did not rule out the idea that a third medical school could enter the mix at some point.

“Going forward, it’s an open question: What’s in the best interest of the patients we serve and the taxpayers of Harris County if there were other providers who wanted to participate?” he said. “We’d certainly want to keep an open mind toward that.”

Masi said the existing contract prohibits the addition of another medical school. That couldn’t happen until it expires.

Masi added that there’s no incentive to let the existing contract run out in five years and said he’s hopeful Harris Health, Baylor and UTHealth will come to a new agreement.

“We greatly value UT and Baylor, who’ve been great partners,” Masi said. “There has been no shortcoming on the part of the schools. The shortcoming is an arcane and byzantine contract that serves no one’s interest.”