Plan Providence and Kaiser Permanente to build a new medical center in California’s High Deserts is the latest example of leading hospital chains seeking market advantage.
They intend to spend up to $ 1 billion to build a hospital in Victorville, a city about 123000 which is 85 miles northeast of Los Angeles. The location is just 11 miles from a hospital that Providence already owns and plans to close in the nearby town of Apple Valley. The new site is adjacent to Interstate 15, the main artery that traverses the Mojave Desert and San Bernardino Mountains towards the more populous cities of Fontana, Riverside and San Bernardino. This location should help increase market share in a region whose population has grown dramatically over the past four decades. Population of Victorville nearly doubled since 2000…
An unusual amalgamation of very different healthcare giants – a Catholic network and a model based only on health insurance funds – will result in an institution that is accessible to patients of both systems. But Kaiser Permanente members will not be able to access certain reproductive services, including abortion, at the hospital due to Providence’s Catholic affiliation.
According to innings Thanks to the government, the new hospital will be fully functional by 2028. KP will contribute 30% of the capital to its construction, and Providence 70%. Providence and KP 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 defeat their two main competitors, Victorville, the Desert Valley Hospital, owned by Prime Healthcare Services, and Victor Valley World Medical Center, owned by KPC Health… Prime is a large national health care system, although not as large as Providence, which is the 10th largest in the country. Kaiser Permanente, which is both an insurer and a provider, has 39 hospitals and 724 medical offices in eight states and Washington, DC (KHN is not affiliated with Kaiser Permanente).
A key part of the plan is to close its 65-year-old facility in Renton, Washington, Providence. Mary’s Medical Center in Apple Valley. It says the costly upgrades required by the impending earthquakes don’t make economic sense.
“Retrofitting the current hospital will cost about the same as building a new hospital, but you will have to do it while the hospital is open,” said Eric Wexler, president of Providence South, which includes the group’s operations in California, Texas. and New Mexico.
According to seismic requirements, by 2030, all hospital buildings used for patient care will be able to function after a major earthquake. The California Hospital Association, the industry’s main lobbying group, and seven other hospital advocacy groups are trying to persuade state legislators to relax the law. They are warn that it will cost California hospitals over $ 100 billion and will force many to close.
The cost of complying with seismic safety regulations has also been factored into the business decisions of other California hospitals.
In December 2017, the Pacific Alliance Medical Center in Los Angeles closed, citing the financial burden of the seismic upgrade. Sutter Health stated that to close its Alta Bates hospital in Berkeley by 2030, because it would be unprofitable to comply with government seismic regulations.
But the Providence-KP deal is not only about competition, but also earthquake preparedness. Even if hospital lobbyists persuade state legislators to relax the requirements, Wexler said there will be no return to the project.
Although Providence has 51 hospitals in seven states, partnering with the KP could strengthen its credibility. The KP, for its part, will receive a local hospital where about 110,000 of its members in the region can receive more than just emergency care.
This makes the deal profitable for the KP members. Currently, they can use St Mary’s, Desert Valley, or Victor Valley Global for emergency assistance. But for any non-emergency medical care, they must travel to the nearest KP hospital, 40 miles from Fontana.
If the offer is accepted, they will have a hospital for almost all of their needs, much closer to home, said Bill Kaswell, senior vice president of Kaiser Permanente.
This means reduced costs for emergency care for KP members at other hospitals in Victorville, including Prime Healthcare, which the KP is always hostile to.
Having a local hospital could help KP grow its High Desert membership, according to Kevin Holloran, who oversees financial analysis of nonprofit hospitals at Fitch Ratings, which provides credit ratings and research to investors.
Some employers and individuals prefer KP, Halloran said, but are put off by the lack of a hospital nearby, so they sign up with other major insurance companies such as Blue Shield of California, Anthem Blue Cross, Cigna, or Aetna. Having a Kaiser Permanente-affiliated hospital in their area could convince them to switch, he said, which could ultimately divert business away from Prime, KPC, and even Providence-affiliated doctors.
Kaiser Permanente has connections with 12 other hospitals throughout California, giving its members full access.
KP doctors will be full members of the new hospital’s medical staff, but it will be governed by a providence that follows Catholic health directives prohibiting abortion, the introduction of contraceptive devices and some other forms of reproductive care. KP doctors will follow these guidelines while working in the hospital.
Providence is currently involved in litigation with Orange County Hoag Hospital, one of its affiliates, in part because of Hoag’s accusations that Providence was illegally restricting reproductive care to Hoag’s patients.
Unlike Hoag, KP can meet the reproductive health needs of its members in its existing facilities, including medical offices in Victorville and nearby Hesperia, and its Fontana Hospital, Caswell said.
The Providence KP plan worries many residents of Apple Valley, a city just over half of Victorville. Saint Mary – urban largest employer and has been in existence since 1956. The new hospital will be the third in Victorville, while Apple Valley will have none.
“My biggest concern is that Apple Valley residents will have to walk a little further to get to the hospital,” said Yvonne Spallino, 85-year-old Apple Valley resident. “Why don’t they build here? Why is it there? “
Scott Nassif, Apple Valley City Councilor who serves on the board of the St. Mary’s Medical Center Foundation, said many people in Apple Valley were overwhelmed by the news of their hospitals being closed.
“We worked so hard to build this hospital. The original developers of Apple Valley donated land for it. The villagers gave him financial support, and suddenly “Poof, thanks, but we’re moving,” Nassif said. “Still a little shocked.”
The loss of the nearest emergency room will hurt the residents of Apple Valley the most, Nassif said. Eleven miles is not that long, he said, but he said it could take more than half an hour to get to the new hospital.
Nassif, who lives near Saint Mary, is well aware of this time factor. One night in 2016, he developed severe chest pains and was rushed to the emergency room. “Basically, when I got there, I was about to leave,” he said. “If I had to go somewhere else, I probably wouldn’t be here.”
There was talk of converting Saint Mary into an institution for emergency care only. State law does not currently permit individual emergency departments, but steps are being taken to amend the law.
If such legislation is passed, Providence will consider providing emergency care in the Apple Valley, Wexler said, but added: “We cannot commit to doing so.”
Kaiser Health News is the national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation and is not affiliated with Kaiser Permanente.