Hospital in Chula Vista to Become Part of Sharp Network

Community Hospital of Chula Vista announced Wednesday that it will become a part of the Sharp HealthCare network--an affiliation that hospital administrators say will allow them to expand in anticipation of a future population boom in the South Bay.

“There is no outright purchase of the hospital by Sharp,” said Community Hospital spokeswoman Imozelle McVeigh. “We are becoming a member of the Sharp health care system.”

But, according to a Community Hospital source who declined to be named, the agreement calls for Sharp HealthCare--also known as the San Diego Hospital Assn.--to ultimately take ownership of the hospital.

Hospital Debt Targeted

On Wednesday, hospital administrators would say only that Sharp HealthCare and the hospital will work together to restructure the facility’s existing bond indebtedness. The outstanding indebtedness remaining from the construction of the main hospital in 1975 and the more recent construction of a convalescent center is between $10 million and $15 million, McVeigh said.

“Our board has been looking at the whole idea of a corporate affiliation for about a year,” she said. “We could have done some expansion on our own, but nothing of this magnitude. We’re a small community hospital and simply don’t have those financial resources.”

An 85-bed expansion is already in the planning stage for the 45-year-old hospital, which has been in its present location on Medical Center Court in Chula Vista since 1975. There are 131 beds in the main hospital, plus 98 beds in the adjacent Birch Patrick Convalescent Center, which opened in 1985.

The planned 90,000-square-foot expansion will include a 23-bed maternity unit, which is seen as a key move to providing adequate service to the growing number of young families in the eastern Chula Vista and Otay Mesa areas, McVeigh said. In addition, an 8-bed surgical intensive care unit, a 54-bed medical-surgical floor and expanded space for radiology, lab and emergency departments are planned.

McVeigh said the hospital will retain its “local identity” despite the acquisition by Sharp. According to the terms of the agreement, Community Hospital will keep its existing management staff and board of directors.

Community Hospital officials said the decision to join Sharp was not prompted by financial troubles, and they cited higher-than-average occupancy rates in the last year.

‘Strong Financial Position’

“We are in a strong financial position today, and we expect to be in a strong financial position in the future,” Community Hospital executive director Robert D. Hansen said in a prepared statement.

“This move is a way for us to join with Sharp to prepare for the future and expand our services to meet the growing needs of the South Bay community,” Hansen said.

Peter K. Ellsworth, president and chief executive officer of Sharp HealthCare, also issued a prepared statement: “In our rapidly changing, competitive health care environment, the joining of like-minded institutions is important in allowing them to do the very best for the communities they serve.”

Sharp HealthCare’s wholly-owned subsidiaries include Sharp Memorial Hospital, Sharp Cabrillo Hospital, two Sharp Senior HealthCare centers, nine Sharp Rees-Stealy medical centers, two convalescent hospitals and a preventive medicine center.

The system boasts San Diego’s only state-approved heart transplant center, the first local open-heart surgery center and the only facility on the West Coast authorized to give patients artificial hearts.

But the health network--along with other hospitals in the county--has recently run into financial difficulties. Last July, Sharp laid off 44 of its 2,200 employees. The cutback was brought about in part by lower payment rates from both private insurers and government programs such as Medicare and Medi-Cal, hospital administrators said.

However, Sharp HealthCare officials say their financial woes are no worse than other hospitals in the county, most of which have also been stung by lower insurance payments.