Ten months after shocking Kansas by announcing it would pull up roots and move to Houston, the Menninger Clinic changed its mind. The famed psychiatric care provider said last week that it won't relocate to the Texas Medical Center after all.
Menninger officials said negotiations with two prospective partners, the Baylor College of Medicine and Methodist Health Care System, had ended amicably.
"Everyone involved with the three institutions worked hard, but there are some differences we have been unable to resolve," said W. Walter Menninger, M.D., chief executive officer of the clinic.
The clinic's wanderlust apparently has not ebbed, however. It remains committed to finding a new partner in a major metropolitan area and forming an affiliation with a major medical school, Menninger said. The clinic, now based in Topeka, Kan., has laid off hundreds of employees and shuttered several programs since its announcement last September to relocate.
"We will initiate discussions with other organizations in the country that have expressed an interest in an alliance," Menninger said. "Our strategic objective is to relocate; that remains unchanged."
Details of the negotiations between the three institutions will remain confidential, the three parties said.
In a written statement, Ralph Feigin, M.D., president and CEO of the Baylor College of Medicine, said Baylor and Methodist will "continue to build on our strengths in the research and treatment of brain and behavior disorders." He noted that some psychiatry residents accepted to Menninger are continuing their training at Baylor.
Meanwhile, the 263-bed clinic will admit and treat patients from across the country in its home of 76 years. "There has been no interruption in our national clinical services during this period of negotiations, and there will be no interruption in the future," Menninger said. "Our services are open."
Kansas officials said they are willing to reopen negotiations to keep Menninger in the state, despite the clinic's rejection last year of a package of incentives valued at more than $100 million. Under that arrangement, Menninger would have allied with the University of Kansas Medical Center to create a brain-research facility near the university's campus in Kansas City. The proposal also would have involved construction of a new psychiatric clinic in the Kansas City area.
Gov. Bill Graves was quoted in a Topeka newspaper as saying that renewed negotiations would "start from scratch" because of the state's difficult budget year. He called the clinic a "very valuable asset" to the state.
At a July 31 press conference, Menninger said he doesn't expect the clinic to relocate before next summer.
Serious problems with negotiations between the clinic and its prospective partners in Houston were first reported three months ago in Modern Healthcare. At that time, the world-renowned psychiatric clinic appeared no closer than it was in the fall to a final agreement to relocate (May 7, p. 24).
Though officials with the clinic and Baylor maintained that the process was moving along, albeit more slowly than expected, they vowed at that time that a deal would be reached within "several months." Indeed, Roger Verdon, a spokesman for Menninger, said the transition to Houston was expected to be completed sometime in 2002 and that there had been no serious problems in the negotiations.
One source in Texas said Baylor was having trouble fulfilling its commitment to raise about $200 million in endowment funds, a key factor in Menninger's decision to leave its longtime Kansas home after suffering a $3 million deficit in 1999.
Dorey Zodrow, a spokeswoman for the Baylor College of Medicine, declined to comment on Menninger's announcement aside from the printed comments in a news release and said top officials were out of town and unavailable for comment.