Ambitious Plans : Millions Poured Into Hospital Expansions
To give Presbyterian Intercommunity Hospital a competitive edge in the 1990s and beyond, the medical center has launched a three-year, $50-million expansion, including construction of a drug and alcohol dependency center, a special cancer radiation unit and an outpatient surgery clinic.
Expansion of the 358-bed hospital is by far the most ambitious project in its 26-year history.
But Presbyterian Intercommunity is only one of several Whittier-area hospitals undergoing major changes to lure new patients, trim health costs and meet the competition in this era of deregulated health care.
Across town from Presbyterian hospital, a $12-million expansion is planned at Whittier Hospital Medical Center.
In neighboring La Mirada, a $15-million project is under way to double the size of the Medical Center of La Mirada, while in Montebello at Beverly Hospital, officials are spending $7.3 million to remodel nursing stations, install computers and enlarge labor, delivery and maternity wards.
Drug, Alcohol Treatment
“Traditional bed hospitals that do not change to meet the needs of today’s consumers are in real trouble,” said Lowell Smith, president and chief executive officer of Whittier-based InterHealth Corp., a nonprofit company formed in 1981 that is Presbyterian hospital’s parent organization.
“For example, some hospitals believe treating drug and alcohol abuse is a dirty business,” he said. “But it is a serious and very real problem in today’s society and needs to be addressed. For that reason, building a chemical dependency center is one of our priorities.”
To finance construction, the Whittier City Council has agreed to carry a $50-million, tax-exempt bond for InterHealth. Council members backed the bond after receiving assurances from City Manager Tom Mauk that InterHealth would be able to make the annual $700,000 loan payment. Moreover, InterHealth agreed to insure the bond for the entire amount, as required by the council.
InterHealth is spending $8.5 million to construct four new facilities on the hospital grounds--a 12,000-square-foot drug and alcohol dependency center, a cancer radiation unit, an outpatient surgery clinic and a special X-ray unit called a magnetic imaging resonance center.
A same-day surgery center, where biopsies, various cosmetic and plastic surgeries, hernia repairs and minor ear and knee operations are performed, opened last month. Completion of the magnetic imaging resonance center--a joint venture with three groups of private radiologists--is scheduled for later this year.
At the same time, the hospital will spend another $15.9 million to upgrade the hospital’s nursing stations, cardiac care and rehabilitation units and radiology equipment as well as install a computer system to store patient and hospital records and expand emergency room facilities. The Los Angeles County Department of Health Services recently designated the hospital a trauma center, the only such facility in the county’s southeastern corner.
To accommodate the growth, InterHealth is spending $7.4 million to buy about 13 acres next to the hospital, including a four-acre site where a corporate headquarters eventually will be built.
When the expansion is completed, the hospital site on Washington Boulevard in south Whittier will encompass almost 42 acres.
About $15 million will be used to refinance the hospital’s existing debt and build operating reserves.
Conspicuously absent from the expansion is the addition of more beds.
In years past, most hospital expansions routinely called for more beds, said Kent Badger, chief operating officer of Presbyterian hospital. But the consumer push to avoid lengthy and expensive hospital stays has left hospitals with a surplus of beds. At some California hospitals, 50% to 70% of the beds are empty, a recent statewide survey showed.
As a result, Badger believes, the accent in the future will be on outpatient services.
“It is a fact of life that the days of prolonged hospital care are over,” said Badger, who has been with Presbyterian hospital since the late 1960s. “Because of the high cost, insurance carriers are encouraging patients to seek more outpatient care--same-day surgery, home nurses or drive-in rehabilitation.
“In recent years, the technology has changed dramatically, allowing shorter hospital stays,” he said. “Twenty years ago, when I had an appendectomy, I spent eight to 10 days recovering in the hospital. Today, an appendectomy patient is in and out in three days.”
Currently, there are 985 beds at five hospitals in Montebello, Pico Rivera, Whittier and La Mirada. By the end of the decade, however, less than 800 beds will be needed in the same four-city area, according to a study by the Office of Statewide Health Planning and Development.
State health officials must still approve any hospital project that calls for additional beds. Otherwise, officials have increasingly taken a hands-off approach to reviewing hospital expansions.
After 1986, hospitals will be able to expand almost at will because health care providers will no longer be required to obtain a certificate of need, the key component of state review of hospital construction, said Derek Pogson, a spokesman for the statewide health planning office.
One reason InterHealth is expanding Presbyterian hospital is to prevent a buy-out by a medical corporation or hospital chain, said Smith, who is also the hospital’s chief executive officer, a post he has held since 1965. Without new facilities, he said, patients would go elsewhere and the hospital might suffer financially, forcing InterHealth to sell the facility.
“Some hospitals that fail to keep pace with the times eventually can’t compete against the big chains, so they are easy targets for takeovers,” Smith said. “When that happens there is a loss of local control. We didn’t want that here, so we decided to change.”
Presbyterian is not the only area hospital that is changing.
At Whittier Hospital Medical Center, a $12-million expansion of the 179-bed facility is on the drawing board. More labor and delivery rooms, patient rooms and intensive-care facilities are planned, said hospital Administrator T. Mike Murphy.
Since the hospital was purchased four years ago by Century City-based Summit Health Corp., Murphy said $6 million has been spent to remodel the interior and expand emergency facilities.
In La Mirada, a $15-million expansion of the Medical Center of La Mirada began in May, said Dennis Gaschen, public relations director for the facility, which is owned by Nu Med Hospitals, an Encino-based company. The 2 1/2-year project will double the size of the 120,000-square-foot facility, adding new office space, labor and delivery facilities and a patient care tower, which will have larger rooms where family members can stay and care for ailing relatives as a way to cut hospital costs.
And in Montebello, officials at Beverly Hospital earlier this year purchased an outpatient surgery clinic next to the nonprofit hospital, said Assistant Administrator James Ovieda.
“Five years ago, marketing and even competition were dirty words in the health care industry,” Gaschen said. “But now look at the all the advertising hospitals are doing in newspapers, magazines and even on the radio and TV. It’s remarkable.”