January 27, 2010

To Members of the Baylor College of Medicine Community:

Fourteen months ago, I agreed to take the position of interim president of Baylor College
of Medicine at a time when our leaders were working to define what the future of the
college should be.

Facing financial difficulties caused in great part by a slumping economy, we were open
to considering all types of solutions.

I am announcing today that the Baylor College of Medicine Board of Trustees has
unanimously approved that Baylor College of Medicine will continue as an independent,
autonomous institution. We are not considering any additional partnerships at this time,
but we will be free to develop relationships with other institutions when needed to
strengthen and expand our academic programs.

Baylor College of Medicine has found its solution …. And it’s Baylor College of
Medicine.

We have had some high profile discussions with Rice University and with Baylor
University. In both cases, all parties involved decided it was best to support each other
without any change in our affiliation status. All are agreed that we have identified many
areas where we can develop joint programs.

Rice University and Baylor University are both respected institutions and we have high
regard for their leaders, faculty, staff and students. We move forward in a spirit of mutual
respect.

We are grateful for the support of Texas Children’s Hospital, who helped us in this
process of exploring partnerships. We would like to thank Texas Children’s CEO Mark
A. Wallace and his leadership team.

These months of discussions with others and thousands of hours spent looking at our
organization have left us with one obvious path to take. We are particularly grateful for
the advice and counsel from our faculty, students, staff and alumni. Baylor College of
Medicine must take charge of its own destiny.

Our board of trustees has unanimously endorsed a three-point plan: establish a long-range
comprehensive strategy; reach an agreement with the college’s creditors, which will
include the appointment of a chief implementation officer to oversee adherence to the
comprehensive plan; and begin the search process for a new president.
Over recent months, we have had a significant improvement in our financial
performance. We have a positive cash flow and our cash and investments now exceed
$1 billion. Both clinical services and research revenue are up and the margins in both of
those activities have increased. We will face some tough challenges, but I’m confident
we will be successful.

With the decision on our independence made, the board will name a search committee as
soon as possible to begin identifying candidates to lead the college in the future. I will
continue to serve as interim president.

With the continued support of outstanding affiliated teaching hospitals, the dedication of
faculty, staff, students, trainees and alumni and the encouragement of the Houston
community, we face our future with a great sense of pride and optimism. We will draw
on the commitment to excellence, independence and entrepreneurship that brought us to
this day.

Our missions of conducting groundbreaking research and offering the best education and
training for the physicians and scientists of tomorrow are the cornerstones of our future.
The patient care we offer in our own clinics and with our outstanding partner hospitals –
Ben Taub General Hospital, the DeBakey VA Medical Center, Texas Children’s
Hospital, The Menninger Clinic, Memorial Hermann TIRR, St. Luke’s Episcopal
Hospital, M.D. Anderson Cancer Center and The Methodist Hospital – will always be
practiced with the patient as the focus and linked to our research advances.

I personally thank you for your support as we’ve very carefully done our due diligence on
what is the best future for Baylor College of Medicine. It has been a lengthy and complex
process, but a necessary one.

With all of our accomplishments over the past 110 years, I believe that our best days are
still ahead.

William T. Butler, M.D.