How Baylor Scott & White Health fell into the “big leagues”

After five years as CEO of Baylor Scott & White Health, Jim hinton leaves the state’s largest nonprofit healthcare system in good stead.

“He brought us into the big leagues,” said Jacques Martin, a long-time member of the board of directors who most recently took over as chairman of the board of directors of Baylor Scott & White Holdings.

Hinton, 62, surprised many last week when he announced his intention to retire at the end of the year, and the board has passed the baton on to his longtime lieutenant. Pete mccanna, who is currently president. Shortly after Hinton arrived in Dallas in 2017, he recruited McCanna to join him from Chicago and the succession plan was in place.

“A tremendous amount has been accomplished, and a tremendous amount lies ahead,” Hinton said. “Because it’s health care. “

As a nonprofit giant with over $ 10 billion in annual revenues, Baylor Scott & White holds a special place in the community, both as a company with 45,000 employees and as a service provider. vital with nearly 4 million patient encounters per year. .

Unlike its competitors with publicly traded public stocks, Baylor does not pay dividends or pass profits through to its owners. And he has real profits – more than $ 1.2 billion in the nine months ended March, more than double the operating profit for the year before Hinton came on board.

But in the nonprofit world, Baylor is reinvesting the money in its mission: to promote the well-being of everyone in the community.

Executives of such companies like to say, “No margin, no mission,” which means that without a profit margin you cannot do as much good.

So how does Baylor stack up now compared to 2016, the year before Hinton arrived?

Over the past five years, Baylor’s annual sales have grown by more than 25% and operating income has skyrocketed. Total assets grew from $ 10.8 billion to over $ 17 billion, a gain of almost 60%. Operating margins have practically doubled.

All of this happened despite a global pandemic that threatened the viability of the business and the safety of employees and customers.

Baylor has taken a big step in digital health, an early priority for Hinton, and the effort has paid off during the pandemic. Over the past two years, the number of annual unique users on the MyBSWHealth app has increased by almost one million.

Baylor has used the drive-thru app and sites to screen more than 560,000 people for COVID-19, and the digital connection has made it possible to monitor patient progress and allow patients to have virtual visits with their doctors. More than 105,000 adults and 5,000 children have been monitored via digital tools, the company said, and this has spread to more traditional treatment and aftercare.

Hinton focused on building unity and teamwork, an imperative for an organization formed years earlier by the merger of Dallas-based Baylor and Temple-based Scott & White.

“He made it pretty simple,” Martin said, focusing on people and progress – and measuring results.

Hinton introduced the notion of “our core», A visual representation of Baylor Scott & White’s mission, ambition, values ​​and strategies. He invited employees to make a personal commitment to the organization and most participated.

“I’ve seen a lot of things like this over the past 30 years, and more often than not, employees put them in their desks drawer and it’s not going anywhere,” Martin said. “But he convinced them to join it.”

His favorite proof: In December, 87% of employees polled said they had a good understanding of the company’s strategy, compared to around two-thirds of those polled just before Hinton’s arrival.

“That’s a huge number to figure out the strategy,” Martin said.

There was a significant increase in the number of people saying they were proud to work at Baylor Scott & White and those saying they would recommend it as a great place to work.

Baylor Scott & White has raised $ 4 million to help employees and their families directly affected by COVID. The company also has aggressive security protocols in place to protect workers, patients and visitors. Less than 1% of employees in patient-contact positions have tested positive for COVID, the company said.

“We came out of the pandemic stronger – by caring for people and taking care of our employees,” said Martin. “But we also got a stronger balance sheet. “

From day one, Hinton sought to cut costs, in part to unlock investments in digital health and other initiatives. Over the past three years, the company has cut spending by more than half a billion, Martin said, even as Baylor added facilities and created promising partnerships with medical schools and physician groups.

“There are just a lot of things that are working for Baylor right now,” said Patrick Zagar, a credit analyst in Dallas for S&P Global Ratings. “Financial performance is important, but academic relationships are important and the health plan really shows its value. “

In a December S&P report, Zagar wrote that Baylor had “maintained exceptional operational performance, especially relative to its peers across the country.” Baylor’s “size, scale and operational diversity” are differentiators during the pandemic, according to the report.

The Scott & White Health Plan, which grossed $ 11 million in 2019, boosted profits to $ 75 million in 2020.

The company has benefited from several one-time events, including $ 519 million in federal relief funds, as well as a major legal settlement for the health plan. But you can still see the benefits of a more rigorous approach, including improvements in reducing expenses and increasing efficiency, Zagar said.

He is impressed with the investment in new facilities, especially around Austin, where population growth is skyrocketing.

In 2017, Baylor acquired a hospital in Lakeway, 20 miles northwest of Austin, and then launched health campuses in Pflugerville, Buda and Austin.

The company must continue to invest in fast-growing areas, particularly north of Dallas County, Zagar said. And it faces well-capitalized competitors in this market.

“It’s an opportunity and a challenge,” Zagar said. “These are fast growing markets, which is a good thing. But that means you have to follow the Joneses. “

Safe Care screening officers Ana Hernandez (right) and Vincent Hargrove (center) record Maria Ruiz's temperature at a COVID-19 checkpoint at a Baylor Scott & White hospital in Dallas in October.  The additional safety efforts were part of a larger campaign to bring patients back during the pandemic, and Baylor's financial results have rebounded strongly since June.
Jim Hinton, CEO of Baylor Scott & White Health, said it was safe for patients to travel to hospital for treatment during the pandemic.  Her favorite point of evidence: Less than 1% of Baylor employees contracted COVID-19 at work.

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