Providence and Caesar team up to build new desert hospital – Press Enterprise

Written by Bernard J. Wolfson | Kaiser Health News

Providence and Kaiser Permanente’s plan to build a new medical center in California’s High Desert is the latest example of a leading hospital chain striving for a market advantage.

They plan to spend up to $1 billion to build a hospital in Victorville, a city of about 123,000 people. The site is located just 11 miles from a hospital that Providence already owns and plans to close in nearby Apple Valley.

The new site is adjacent to Interstate 15, a major artery that runs through a patch of the Mojave Desert and through the San Bernardino Mountains toward the more populous cities of Fontana, Riverside, and San Bernardino. This location should help increase market share in an area whose population has increased significantly over the past four decades. Victorville’s population has nearly doubled since 2000.

The unusual pairing of two very different healthcare giants – a Catholic chain and an HMO-only model – will result in a facility available to patients of the two systems. But members of Kaiser Permanente will not be able to obtain certain reproductive services, including abortion, in the hospital because Providence is Roman Catholic.

According to one of the documents submitted by the state, the new hospital will be fully operational by 2028. KP will contribute 30% of the capital for its construction, and Providence 70%. Providence and KB hope to get state approval for their plan and sign a final agreement by the end of the year.

The new facility will help the partners take on their major competitors in Victorville – Desert Valley Hospital, owned by Prime Healthcare Services, and Victor Valley Global Medical Center, owned by KPC Health. Prime is a large national healthcare system, although not as large as Providence, which ranks 10th in the country. Kaiser Permanente, an insurance company and provider at the same time, has 39 hospitals and 724 medical offices in eight states and Washington, D.C. (KHN, which produces California Healthline, is not affiliated with Kaiser Permanente.)

A key part of the plan is for Providence, based in Renton, Washington, to close the 65-year-old Saint Mary’s Medical Center in Apple Valley. She says the costly upgrades required under looming earthquake mandates don’t make economic sense.

said Eric Wexler, president of Providence South, which includes the group’s operations in California, Texas and New Mexico.

Seismic mandates require that by 2030 all hospital buildings used to care for patients will be able to function in the aftermath of a major earthquake. The California Hospital Association, the industry’s main lobbying group, and seven other hospital advocacy groups are trying to persuade state lawmakers to relax the law. They warn that it will cost California hospitals more than $100 billion and force many to close.

The costs of meeting seismic safety codes have also influenced business decisions at other California hospitals.

In December 2017, Pacific Alliance Medical Center in Los Angeles closed, citing the financial burden from seismic retrofit. Sutter Health said it will close Alta Bates Hospital in Berkeley by 2030 because meeting state seismic standards would not be cost-effective.

But the Providence-KP deal is as much about competition as it is about earthquake preparedness. Wexler said that even if hospital lobbyists persuade state lawmakers to relax requirements, there is no turning back from the project.

Although Providence has 51 hospitals in seven states, association with KP could polish its credentials. For its part, KP will have a local hospital where its 110,000 members in the area can go for more than just emergency care.

This makes the deal beneficial to KP members. For now, they can use St. Mary, Desert Valley, or Victor Valley Global for emergency services. But for any non-emergency hospital care, they must travel to the nearest KP hospital, 40 miles away in Fontana.

If the proposal were implemented, they would have a hospital for nearly all of their needs close to home, said Bill Caswell, senior vice president at Kaiser Permanente.

This means spending cuts on emergency care for KP members at other hospitals in Victorville – including those owned by Prime Healthcare, with which KP has a history of mutual animosity.

Owning a local hospital could help KP increase its membership in High Desert, said Kevin Holoran, who oversees financial analysis for nonprofit hospitals at Fitch Ratings.

Holoran said some employers and individuals prefer KP but are putting off due to its lack of a nearby hospital, so they have signed up with other large insurers such as Blue Shield of California, Anthem Blue Cross, Cigna or Aetna. Having a Kaiser Permanente hospital in their community might persuade them to switch, he said, which could eventually alienate work from Prime, KPC, and even Providence-affiliated physicians.

Kaiser Permanente has affiliations with 12 other hospitals across California allowing its members full access.

KP doctors will be full members of the medical staff at the new hospital, but it will be operated by Providence, which follows Catholic healthcare directives banning abortions, the introduction of birth control devices and some other forms of reproductive care. KP physicians will adhere to these directions while working in the hospital.

Providence is currently embroiled in a legal battle with Hogg Hospital in Orange County, one of its affiliates, in part over Hogg’s allegations that Providence is illegally restricting reproductive care to Hogg patients.

Unlike Hoag, KP can meet the reproductive health care needs of its members at its existing facilities, including medical offices in Victorville, near Hesperia and its Fontana Hospital, Caswell said.

The Providence-KP plan is unsettling for many residents of Apple Valley, a town just over half the size of Victorville. St. Mary’s is the city’s largest employer and has been around since 1956. The new hospital will be the third in Victorville, while Apple Valley will leave no hospital behind.

“My concern is that people in Apple Valley are going to have to go far to the hospital,” said Yvonne Spallino, an 85-year-old Apple Valley resident. “Why don’t they build one here? Why is there there? “

Scott Nassif, Apple Valley City Council member and St. Mary’s Medical Center board member, said many people in Apple Valley were shocked by the news that their hospital would be closing.

“We worked hard to get this hospital. The original developers of Apple Valley donated the land for it. The residents supported him financially, and suddenly, ‘Poof — thanks, but we’re moving,’” Nassif said. “Everyone is still in shock.”

Nassif said the loss of nearby emergency care would hurt Apple Valley residents the most. Eleven miles doesn’t seem like a lot, but it can take more than half an hour to get to the new hospital site if traffic is heavy, he said.

Nassif, who lives near Saint Mary, is well aware of this time factor. One night in 2016, he started experiencing severe chest pains and was taken to the emergency room. “Basically, when I got there, I was on my way out,” he said. “If I had to go anywhere else, I probably wouldn’t be around.”

There has been talk of turning St. Mary’s into an emergency care-only facility. Currently, state law does not allow for independent emergency rooms, but movement is afoot to amend that law.

Wexler said that if such a law were passed, Providence would consider placing ER at the Apple Valley site, but added, “We cannot commit to implementing that.”

This story was produced by Kaiser Health News, a national newsroom that provides in-depth coverage of health issues and is one of the three major drivers of the Kaiser Family Foundation. KHN is the publisher of California Healthline, an independent editorial service of the California Health Care Corporation.

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