Public / Private Partnerships – Parkland Hospital’s Success

INSIGHTS & RESOURCES

Walking into the Judge’s office (that is the name given County Commissioners in Dallas County Texas- lest you get the wrong idea), I was uncertain of what to expect. It was my first interaction with a government official on a fundraising project. The question he asked was, “Will the philanthropic community of Dallas support the construction of a Charity Hospital to the tune of $50 million? That is what we want to know.”

Parkland Hospital’s history as a charity hospital was long and storied. The first hospital was constructed in 1929, the current facility in 1954. It was known as the place where President John F. Kennedy died. It was recognized for its trauma center, and because most of the children born to undocumented immigrants happened to arrive into the world in Parkland’s maternity ward.

A blue-ribbon panel of architects, engineers, and business people ascertained that it was not realistic to renovate the current building. The demands of modern technology and way modern hospitals were configured for increased efficiency, and improved patient care required new construction. It was a once in a generation opportunity to address the population health needs of the city and region.

The problem was a new building would require just south of $1 Billion. Hospital Leadership (the late Dr. Ron Anderson at the time) thought they could generate $300 Million from operations over time, $50 Million was sought from philanthropy and the rest would come from a bond initiative financed by a property tax increase.

We conducted wealth screening and donor analytics and discovered that potential existed. However, the vice chair of the board, registered some skepticism. “I am accustomed to drilling an occasional dry well, and I don’t mind that if the rest of them hit oil. We use Monte Carlo Analysis in our work, would you mind if I had my guy look at your data?” Heck no. He was the client. His analyst took the data and ran his models. He ended up with a .98 correlation to what our forecast has projected. We earned his trust.

During the course of the feasibility study, we met with the leadership of the Dallas community, Philanthropists all. Included in the conversation were the Meadows Foundation, Mr. Paul Bass, Mr. Simmons, Mr. & Mrs. Reese-Jones, Mr. Bobby Lisle, Mr. Mike Myers and the Perot family. From them and others we heard the same thing, someone they knew was saved at Parkland Hospital. This included the husband of the associate vice president for development, who chose to work at Parkland Foundation because of it.

During the feasibility study two lead gifts were secured. One was a challenge gift of $50 Million from Mr. Simmons’ who said, “If we don’t step up to do this who will?” The second was from the Reese-Jones Foundation for $25 Million, which was contingent on the successful passing of the bond initiative.

Our recommendation to the Judges: Not only was $50 Million feasible, you have $75 Million in advance commitments and your goal should be $150 Million. The recommendation was accepted. That November the citizens of Dallas County passed the third consecutive property tax increase to finance the Charity Hospital. They did so with 82% of the vote. This launched the nation’s first public/private partnership in healthcare. Unfortunately, a recession hit, and it took a little longer to secure the final gifts. But the campaign was successful based on the dedication and generosity of the community. Philos. Anthropos. Love of Human Kind.