In Planned Parenthood Merger, Efficiency is the Name of the Game

ADDISON — Texas Planned Parenthood advocates have been outspoken about the hits they have taken from state lawmakers in the last year — including major cuts to family-planning financing, a new abortion sonogram law and being booted from a Medicaid health program for poor women.

They have been far quieter about one of their plans to fight back: merging three regional Planned Parenthood branches — North Texas, Austin and Waco — into one $29 million-per-year, 26-clinic mega-organization.

The merger — approved by all three boards Wednesday — will create Planned Parenthood of Greater Texas, the eighth-largest affiliate of the nation’s most ubiquitous reproductive health and abortion provider.

Publicly, Planned Parenthood leaders say the merger, which has been under discussion since 2009, is about creating a leaner, more efficient organization, especially in the face of reductions in state and federal financing. Less brazenly, they suggest that joining forces is the best way to defend their branches from an onslaught of anti-abortion legislation — and to connect the fundraising powerhouses concentrated in North Texas with endangered clinics throughout the 58,000-square-mile region and beyond.

“For us, it’s a strategic merger, an opportunity to pull together three very strong operations into one,” said Cecile Richards, president of the Planned Parenthood Federation of America, and the Waco-born daughter of the late Gov. Ann Richards. “It will help on the advocacy side and, more important, on the health care delivery side.”

Mergers of Planned Parenthood affiliates are nothing new: In 2006, Planned Parenthood of Houston and Southeast Texas partnered with Planned Parenthood Louisiana to form Planned Parenthood Gulf Coast, a $23.8 million annual operation that operates 13 health centers across two states.

What sets Planned Parenthood of Greater Texas apart is its size, in both geography and scope: Its reach will extend from southern Austin up to Denton, from Tyler in East Texas west to Fort Worth. In 2013, its 26 clinics — of which four will provide abortions — are expected to have an estimated 180,000 patient visits. They will provide birth control for 103,000 people, perform 8,500 abortions and screen tens of thousands of women for breast and cervical cancer and sexually transmitted infections, Planned Parenthood officials said.

“We will be a $30 million organization with no debt and reserves. I believe we will be able to raise even more with a balance sheet that strong,” said Ken Lambrecht, the current head of Planned Parenthood of North Texas who will be the Dallas-based president and chief executive of the new operation when the merger takes effect in September. “Already, funders are lining up, recognizing this new strength we bring to the table, to help us weather the storm.”

Texas abortion opponents call the merger a sign that the organization is scrambling to maintain its reputation in the face of targeted budget cuts. In 2011, the three Planned Parenthood branches that are now merging received more than $5 million combined from the state family-planning budget; in 2013, they expect no money.

“They are desperate to stay relevant, to keep up their false image of being a valid women’s health provider,” said Elizabeth Graham, director of Texas Right to Life.

“They are still fighting to get their money back, to keep their hands in the pockets of taxpayers,” she added. “How much money do you need to run an abortion industry?”

Planned Parenthood officials acknowledge that they have been hit hard. Though none of their clinics that received public financing performed abortions, Republican lawmakers still slashed Texas’ family planning budget in the last legislative session, meaning millions of dollars in cuts to Planned Parenthood.

“The Texas Legislature has overwhelmingly spoken in support of life, creating laws to help prevent tax money from supporting abortion providers and their affiliates,” Catherine Frazier, a spokeswoman for Gov. Rick Perry, said in a statement.

These clinics are poised to lose more money — up to $3 million in North Texas alone — in the coming months as the state begins enforcing a rule banning Planned Parenthood clinics from a five-year-old contraception and cancer-screening program, even though clinics that participated were prohibited from performing abortions. Planned Parenthood branches have closed a dozen clinics statewide since the cuts took effect, including several in North Texas.

Yet this week’s merger vote creates a regional Planned Parenthood branch that looks robust. Lambrecht said all three branches are healthy — they have been around for roughly 75 years, they do not have debt, they have cash reserves and they own many of their buildings across the region. With headquarters in Dallas, the new organization taps into North Texas’ old-money fundraising families, including some prominent Republican women who have maintained their allegiance to Planned Parenthood.

The merged organization, budgeting for roughly $24.5 million in private donations, fundraising events and client fees in 2013, is already rolling out the latest in electronic health records technology. And it absorbs the fruits of the North Texas branch’s recent five-year capital campaign, including an Addison health center that tripled in size with a recent relocation, and a new $6.5 million health care clinic, administrative facility and abortion clinic under construction in Fort Worth.

Lambrecht said he hopes the merger means the state’s six Planned Parenthood branches can partner even closer to prevent future clinic closures.

“Planned Parenthood has served proudly in the state of Texas for 75 years, and we’ll be here for 75 years more,” he said. “We stand resolute. We’re not going anywhere.”

Although Lambrecht said the size of Texas makes it unlikely that all six branches would someday become one, future mergers would not surprise him. Melaney Linton, president and chief executive of Planned Parenthood Gulf Coast, said there were never serious conversations about her organization joining the north and central Texas merger — but “who knows” what the future will hold.

“If we can reduce administrative costs and improve economies of scale, then we can provide more health services to more women and families,” she said. “Clients don’t care if you’re Planned Parenthood of XYZ or ABC; they just want you to be there for them.”