Scripps Memorial to Buy Bay Hospital in Chula Vista

The Scripps Memorial Hospitals Board of Trustees voted Thursday to purchase financially strapped Bay Hospital Medical Center in Chula Vista, swallowing the South Bay hospital’s nearly $18-million debt in the process.

The acquisition is pending approval by Scripps and South Bay officials of a final purchase agreement. Under an earlier agreement, Scripps took over management of Bay Hospital in June. The purchase must be completed by next Thursday, acting Administrator Jeff Bills of Bay Hospital said.

“Attorneys from both sides are working in terms of the language of the agreement,” Bills said. “Both parties are working toward approval.”

Scripps has managed Bay Hospital since June 20, when the nonprofit Chula Vista facility sought help from area hospitals because of its continuing financial troubles.

In assuming ownership of Bay Hospital, Scripps, also a nonprofit operation, will retire the Chula Vista medical center’s outstanding $17.4-million debt through a refinancing agreement. Scripps already had sliced $2 million from Bay Hospital’s deficit during its 90 days of management.

“We reviewed all the systems and all the aspects of the hospital and are very impressed with the medical staff, the employees, and the high standard of services at Bay Hospital,” Bills said. “That is why we feel good about making the decision to assume full ownership.”

Since Scripps assumed control of Bay Hospital, the equivalent of 125 full-time employees have been dismissed. Previously, the hospital had about 900 employees, Bills said.

“No further staff reductions are planned,” Bills said. “I would like to stress that no one involved in direct patient care was cut, and the cuts in no way affected the quality of care at the hospital.”

A previous agreement between Bay Hospital and the City of Chula Vista that would have caused ownership of the hospital to revert to the city in 2010 will be terminated if the new agreement between the hospital and Scripps Memorial is approved.

Scripps Memorial already owns and operates hospitals by that name in La Jolla and Encinitas, as well as a convalescent hospital in San Marcos. The acquisition of Bay Hospital will not affect plans to expand the La Jolla and Encinitas medical centers, or plans to build a new hospital in the Carlsbad-San Marcos area, Bills said.