Valley Baptist finally rebounding from Dolly

HARLINGEN - Last year was a turbulent time for Valley Baptist Health System, and the troubles might not be over yet.

The system's Harlingen facility sustained about $25 million in damages from Hurricane Dolly, at one point forcing 13 of the facility's 16 operating rooms to close, and lost about $11 million in business until the damage was repaired, officials acknowledged for the first time this week.

Coupled with the recent economic downturn, the system has faced a significant financial crunch, Valley Baptist's new CEO, James Eastham, said.

For that reason, Valley Baptist is considering selling some of its assets, including a $7 million fitness center that opened in 2007, a golf course and lots in Treasure Hills, Eastham said Thursday.

Valley Baptist acquired the golf course in 2003, through a donation and purchase.

Eastham said the medical center was trying to "grow through diversification" earlier in the decade.

Now the system is postponing some improvement projects and has eliminated a couple of corporate positions and consulting contracts, he said.

"We have to be prudent in how we spend our resources ... we're not putting any resources into projects that aren't patient-related," Eastham said.

Dolly's high winds, which roared through Harlingen on July 23, broke windows and caused wind and water damage in several operating rooms. Valley Baptist-Harlingen wasn't fully operational again until October, Eastham said.

"That really took its toll, considering we had to pay the costs (of repair)," he said.

Valley Baptist has received some insurance reimbursement, but hasn't yet received money from the U.S. Federal Emergency Management Agency to cover hurricane damage, officials said. The system had to absorb the rest of the costs for now, they said.

As the U.S. economy has soured, the system's hospitals also have experienced a ripple effect: patients are postponing elective surgeries, can't manage their co-payments or are losing their insurance. And the hospitals' finances are suffering, Eastham said.

Valley Baptist officials declined to release the system's latest financial statements.

The hospitals' latest IRS Form 990 tax return statements that were immediately available showed that Valley Baptist-Harlingen had net assets of $188.6 million in 2006 and Valley Baptist-Brownsville had net assets of $19.5 million in 2007.

The system has invested in some patient-related projects recently, including purchasing a robotic-surgery system last year, renovating the oncology wing in Harlingen and hiring additional psychiatrists for a mental health facility in Brownsville, officials said.

A new $8 million surgery wing at Valley Baptist-Brownsville is slated for completion in the fall, the medical center's spokeswoman Teri Retana said.

However, the system is cutting back in other areas, Eastham said.

Valley Baptist likely will sell the golf course and fitness center at some point, but it's tough to sell during tight economic times, Eastham said.

Despite some rough times, Valley Baptist will survive, Eastham said.

"Valley Baptist is very viable," he said. "We're going to be here for a long time."