Knapp, Valley Baptist hospitals to merge

HARLINGEN — Valley Baptist Health System will merge with Knapp Medical Center of Weslaco this summer, officials from both hospitals announced Tuesday.

The two health systems signed a memorandum of understanding that will enable the two non-profit organizations to form a new non-profit health system, according to a statement from the hospitals’ spokesmen.

The memorandum is the first step in the consolidation. Before the merger is finalized, the hospitals must execute an agreement, obtain regulatory and government approvals, as well as the approvals of bankers and others with financial interests in the hospital, according to a statement issued Tuesday.

The move should mean more efficient health care for consumers as the organizations combine resources, local health officials said.

That efficiency should come without any job reductions at Harlingen’s second-largest employer, or its sister hospital in Brownsville.

Valley Baptist in Harlingen currently employs about 2,214 workers, according to the Harlingen Economic Development Corp. Valley Baptist in Brownsville employs about 840 workers, making it one of the top 10 employers in the city, according to the Brownsville Chamber of Commerce’s Web site.

"We don’t anticipate any job loss at this time," Valley Baptist Chief Executive Officer James Eastham said. "As this joining makes our system stronger, then we may even be able to create additional jobs."

Knapp Medical employs about 900 workers, company spokesman Debby Rektorik said. The hospital, which opened in 1962, is Weslaco’s second- largest employer behind the school district, according to the Weslaco Economic Development Corp.

Both Valley Baptist hospitals, Brownsville and Harlingen, as well as Knapp Medical Center will keep their names. However, the new health system will have a new name, Eastham said.

The hospitals hired a public relations firm to select a name for the new health care system, Eastham said. That name will be announced in the coming months.

"By agreeing to work toward the formation of this new not-for-profit system, we are renewing our commitment to the people of the Valley that we are good stewards of their health care resources," Jim Summersett, chief executive officer for Knapp Medical, said.

The health care reform bill signed into law by President Barack Obama last month created some uncertainty in the health care industry, Valley Baptist officials said. But health care reform did not drive this merger, Eastham said.

"Even before the health care reform bill, I think hospitals saw the writing on the wall," Dianna Garcia-Smith, an assistant professor at the University Texas-Brownsville, said.

Garcia-Smith, who teaches in the UTB nursing department, is an expert on the trends of health care systems.

"It was more than just additional paperwork. There’s more accountability with hospitals now," Garcia-Smith said. "Being a small hospital can be difficult, especially in competing against larger hospitals."

Garcia-Smith could not comment specifically on the Valley Baptist-Knapp merger, but she said hospital mergers have been a national trend in health care.

"If two hospitals have a shared system, that’s going to cut down on costs," Garcia-Smith said.

One of the area’s hospitals has seen an increased cost is in the federal government’s push to make all health records electronic, Garcia-Smith said.

But transferring paper records into electronic databases was not a concern in making the merger deal, said Valley Baptist’s CEO.

ADDITIONAL CHANGES WITH THE MERGER

A new board of trustees will be formed to oversee the health system’s operations, hospital officials said. Board members at both hospitals do not receive financial compensation for their roles, hospital officials said.

Both hospitals will be joint members in the new organization, hospital officials said.

The headquarters for the new health system will be at the Harlingen’s Valley Baptist Medical Center, hospital officials said. No new construction will occur as a result of the merger. But the joint venture could enhance the ability to expand the hospitals’ facilities and services.

Each hospital will retain its medical staff, officials said. There is no plan for medical staff consolidation.

The Baptist General Convention of Texas will continue its voluntary cooperative relationship with Valley Baptist Medical Centers, Valley Baptist spokeswoman Terri Retana said.

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Corey Ryan is a reporter for the Valley Morning Star in Harlingen.