One of the world’s best-known centers for psychiatric treatment, education, and research is packing its bags and heading South. In two years Menninger will say goodbye to Topeka, Kan., where it was founded 75 years ago, and set up shop in Houston as part of a new alliance with Baylor College of Medicine and Methodist Health Care System.

Once in Texas, Menninger and the other two medical institutions will establish a new "national center" for treating psychiatric illnesses and a research institute that will focus on brain and behavior research.

Menninger, one of Topeka’s largest employers, fell victim to the financial pressures that have accompanied an upheaval in the U.S. health care system over the last decade or so. Reduced insurance payments, shorter inpatient stays, and fewer patients forced Menninger trustees to explore moving from the small city to a large metropolitan area to increase its pool of potential patients. Since 1986 Menninger’s marketing budget jumped from $100,000 to $1.1 million as it attempted to reach more potential patients.

The 242-acre campus that houses Menninger’s Topeka facilities has also been a financial drain as the costs of maintaining so much land and multiple buildings scattered across it have risen dramatically over the last few years.

In announcing the move to Texas, Menninger officials acknowledged that the organization lost nearly $3 million in 1999 and tapped its $100 million endowment to the tune of $12 million to cover the shortfall. It had turned to its endowment several times in recent years to meet its operating expenses.

Kansas Governor Bill Graves, along with other state officials and some private partners, had put together an incentive package worth about $100 million that they hoped would entice Menninger to stay in Topeka and Kansas City, Kan., where it also has treatment and research programs. Even with some later enhancements, their offer could not match what the Houston organizations offered in terms of money, facilities, and other resources. When Menninger officials announced their decision, Graves characterized it as "a sad moment."

Explaining the decision to affiliate with Baylor, Walter Menninger, M.D., Menninger’s president and chief executive officer, said the choice was not just about financial benefits. "It isn’t just resources," he told the Topeka Capital-Journal. "It is a simpatico philosophy and vision about dealing with the health care situation and making a difference in the world."

He noted that Baylor’s psychiatry department would be renamed the Menninger department of psychiatry once the partnership is up and running.

At a September 27 press conference in Topeka, Menninger said he regrets that the decision "means we have to leave some of our roots, but that’s the way the world is right now, at least in our field." He added that while the Topeka institution "would not have chosen to [move], the fact is that reality has confronted us with a forced choice that we cannot economically survive if we were to continue operating the same way. . . .Then our challenge, if you will, is to turn lemons to lemonade."

Explaining his vision for the new psychiatric conglomerate Menninger said in a press release that an alliance among the three institutions "will realize the visions and missions of our three world-class institutions to offer the best psychiatric care in the world, train superb mental health professionals, and pursue behavioral and neurobiological research."

In addition, the move to a large metropolitan area, he said, "will position Menninger for growth and provide a platform for Menninger to positively influence American psychiatry for the next century."

Menninger employs 918 people in Topeka and another 244 in Kansas City, Kan. Menninger officials do not yet know how many will be offered jobs in Houston. Menninger said he will be among those moving to Houston, where he will retain his title of president and CEO of the Menninger Foundation.