Baylor Scott And White Health Care Case Analysis

Baylor Scott & White believe they have a competitive advantage in the healthcare market. Currently they are the “largest not-for-profit health care system in Texas, and one of the largest in the United States, Baylor Scott & White Health was born from the 2013 combination of Baylor Health Care System and Scott & White Healthcare.” 1 The goal of the merger was to create a new healthcare model in the ever changing world of healthcare reform. The size of the new market created in 2013, is larger then the state of Virginia. They are a competitive employer having over 34,000 employees and over 6000 physicians in the state of Texas. The merger also resulted into 44 hospitals and over 500 “patient care site” to serve the people of Texas. Their size and presence in the healthcare market alone

allows them the competitive advantage in healthcare in the Texas market. 2

As the healthcare landscape evolves the payment structure continues to change. Having a competitive edge in the market and the ability to adapt to the reimbursement evolution, Baylor Scott & White’s development of the Baylor Scott & White Quality Alliance (BSWQA) gives them an advantage in the area of having an “Accountable Care Organization” (ACO) According to the Centers of Medicare and Medicaid,

“Accountable Care Organizations (ACOs) are groups of doctors,
hospitals, and other health care providers, who come together
voluntarily to give coordinated high quality care to their Medicare
patients. The goal of coordinated care is to ensure that patients,
especially the chronically ill, get the right care at the right time,
while avoiding unnecessary duplication of services and preventing
medical errors.” 3

Baylor Scott &White has partnered with several healthcare providers to form a regional network which is a paradigm change from the traditional merger and acquisition strategy healthcare providers have implemented over the years.

As a result, in expanding their partnership with healthcare providers, their brand has expanded throughout state of Texas and in the national arena. For example, they partnered with Select Medical in 2012 for post acute care services. 4
Most recently, Tenet Healthcare Corp formed a partnership with Baylor Scott &White to jointly own five hospitals in the Dallas/ Fort Worth market. BSW will be majority owner and the hospitals with operate utilizing the Baylor Scott and White brand. 5 Until recent, there was not another system as competitive in market share, but the landscape is changing and another regional healthcare network has formed. On October 2, 2015 UT Southwestern Medical Center and Texas Health Resources (Texas Health) systems have merged to form what will now be called Southwestern Health Resources.

Health Care

Challenges

There are numerous challenges facing health care today. The biggest challenge facing Baylor Scott &White is creating a network that gives the best health care at the lowest cost. According to Eric Wallis, CNO/ COO of Baylor Scott & White Medical at Plano, this goal is broken down into 3 strategic goals: improve the patient experience of care, improve the health of the population, and reduce the per capita cost of healthcare. Healthcare must create a “patient centered” model to deliver care. The Institute of Medicine defines patient-centered care as: "Providing care that is respectful of and responsive to individual patient preferences, needs, and values, and ensuring that patient values guide all clinical decisions." 7 Improving the health of the population is the goal the Baylor Scott & White Accountable Care Organization. They are creating a network of medical homes and specialist to care for the lives they serve. In 2014, Baylor Scott & White was recognized by the Dallas Moring News for creating an ACO with its own employees. At the end of the fiscal year they had a 7% reduction in healthcare costs, resulting in a $14 million savings. 8 They are building on that model of care for the over 60,000 lives they plan to carry in 2016.