Community Hospital War Pits University Against the Rest of Region's Healthcare System

Cheryl Clark, April 7, 2010

It's a rare day when you see a hospital CEO get angry in public, especially one who was recently elected chairman of the board of governors of the American College of Healthcare Executives.

But that's what happened last week when Chris Van Gorder, CEO of five-hospital Scripps Health in San Diego, learned that his system's long-time rival will build a 245-bed hospital in affluent La Jolla, a facility that is twice as big as he says he was led to believe.

The University of California San Diego will build its $645 million hospital a stone's throw from one of Scripps' La Jolla flagship hospitals and just down the road from the other–in just five years.

The teaching hospital also will downsize its safety net acute care facility near downtown San Diego, a strategy that would mean Scripps' two southernmost hospitals would be left to absorb care for many more underinsured and uninsured from the inner city, Van Gorder believes.

UCSD does say it will move key services, such as oncology, advanced surgery and imaging, obstetrics, and neonatal intensive care services to La Jolla, which Van Gorder believes will require Scripps to absorb the many uninsured and underinsured patients needing that kind of care from the southern part of the county.

He is convinced UCSD is trying to abandon–little by little–the safety net population it agreed to serve decades ago when it took over the 10-story county hospital building near downtown San Diego for $1.

Instead of treating the poor, Van Gorder believes, UCSD wants to treat the rich, poaching well-insured and affluent patients and philanthropists who might otherwise align with Scripps.

Those are fighting words.

UCSD, on the other hand, says it must make this transition, despite the slings and arrows from Scripps.

First, its 10-story safety net hospital in Hillcrest, two miles from downtown, cannot meet seismic structure requirements set by the state for 2030, an issue that took on renewed and obvious importance over the weekend. The hospital will have to be entirely rebuilt, something it plans to do, says UCSD CEO Tom Jackiewicz. But where will the patients go in the meantime?

Other hospital systems like Scripps or Sharp will have to pick up the load.

Second, university officials reason the teaching facility needs to move patient care closer to researchers so UCSD scientists and the many biotech companies and new stem cell research institute nearby can facilitate bench-to-bedside translational medicine that is so important for federal grants.

Third, there's the need for more beds to care for a growing and aging population. San Diego County, population 3.1 million, is bigger than 22 states and its sunshine promises to maintain its growth trajectory.

And fourth, UCSD also acknowledges it does need a better payer mix, something it says it needs to support its commitment to take care of the poor.

For Van Gorder, the issue is a classic Gown vs. Town conflict. From his view, UCSD has enormous advantages in the business of healthcare over its competitors. It's a state-supported academic teaching hospital with millions in federal research grants and numerous tax and state-backed financing breaks–one that can legally hire doctors.

In effect, Van Gorder views the state-supported hospital as a bully that's encroaching on a struggling nonprofit health system that lacks those credit market handicaps and can't hire its own doctors.

It receives indirect medical expenses for its teaching functions, receives more funding from Medicaid than does Scripps, and receives special funding for child healthcare.

"UC is a government, free from taxes or fees from any other government," Van Gorder says. "That means they don't have to respond to local community planning groups, city planning commissions or city council on land use issues or fees. For example, their Environmental Impact Report only requires approval by Board of Regents—the same board that already approved the plan and accepted the donation to build the project."

Facebook icon
LinkedIn icon
Twitter icon