Scripps Clinic, Sharp Are Discussing a Merger : Medicine: The joining of the biomedical research facilities and nonprofit hospital chain would create a $750-million-a-year medical giant.

One of San Diego County’s leading biomedical research facilities and the county’s largest nonprofit hospital chain are considering joining forces, a merger that would create a $750-million-a-year medical giant.

Talks on just how such a merger might work are going on between representatives of Scripps Clinic and Research Foundation and Sharp HealthCare.

“We’ve been in discussion with Sharp for over a year, since the time of discussions about joint organ transplant programs,” said Robin Goldsmith, a spokeswoman for Scripps.

“We are continuing to explore ways we could collaborate. We are not at this point ready to announce anything,” Goldsmith said.

Last October, Scripps and Sharp announced an agreement to cooperate on organ transplants, with heart and lung transplants to be done at Sharp and bone marrow and liver transplants to be done at Scripps.

Over the last year, Scripps also has begun sending patients covered under its health insurance plan to Sharp to deliver their babies, said Scripps board member William E. Nelson, president of Scripps Bank, of La Jolla.

“I’m very pleased with the fact that both Scripps and Sharp are at least talking about it because, whether it works or not, the attitude that they’re taking is ‘What’s going to be best for the community?’ It really is a positive thing,” Nelson said.

The Scripps board is uniformly enthusiastic about the idea, Nelson said.

The transplant discussions naturally led the two chief administrators involved to develop a rapport that led to further discussions, Nelson said.

If an agreement is reached, it would represent another volley in the battle to see which hospitals thrive and which falter or even fail over the next decade in San Diego County.

Even with population growth, the county’s urban corridor has an oversupply of doctors, hospital beds and expensive medical machines, industry analysts long have believed. As institutions try to stay competitive, there has been a boom in high-tech, high-profile facilities to attract paying patients.

In such an atmosphere, the advantage of a Scripps-Sharp merger would be twofold:

* It would eliminate the need for duplicate, expensive services. For instance, under the transplant agreement already reached, rather than having to set up a bone marrow transplant program, Sharp doctors could handle patients who need bone marrow transplants, but send them to Scripps for the actual operation.

* Each institution would benefit from the other’s strengths. Sharp, for instance, would be able to bask in the glow of Scripps’ reputation as an outstanding biomedical research facility.

The losers in such a merger could be hospitals located in the same areas as Sharp/Scripps facilities. Chief among them is Scripps Memorial Hospital-La Jolla, whose Interstate 5 location is very close to Scripps and west along Genessee Road from Sharp. Despite the name, the Scripps Clinic and Scripps Memorial are unrelated.

The competitive situation in that area will become even more complicated when UCSD’s new hospital opens, just south of Scripps Memorial. With lavishly decorated private rooms, the new UCSD hospital is aimed at attracting lucrative patients along the I-5 corridor, stretching from La Jolla to the Orange County line.

It’s hard to say what the merger would mean for other hospitals until actual details of the merger are available, said Jim Lott, executive director of the hospital council.

“The only time this community would have to be concerned is if the market-share distribution is disturbed, because hospitals are so delicately balanced on the revenue side that disruptions of that could threaten financial viability of those hospitals,” Lott said.

Scripps and Sharp officials would not comment on these or other questions the merger talks raise, including whether there might be eliminations of certain jobs or even of entire departments at Sharp and Scripps.

“You don’t really solve overlaps immediately, because that gets a little brutal on the people involved,” Nelson said.

Sharp would bring into the merger a reputation as a corporation that has been known over the last few years for trimming middle management as much as possible.

An example of overlapping facilities would be in the lucrative cardiac care area. At Scripps, officials proudly unveiled last year an expensive new facility for catheterization and other complex cardiac procedures, facilities that also exist at Sharp.

That is one issue that already has been discussed in great detail, Nelson said.

“I’ve been assured by the physicians involved that they’ve been assured (that in the case of a merger) it’s going to actually be for the better,” he said.

Another potentially sticky issue could be fund raising through each institution’s charitable foundation, since the foundations might court the same wealthy donors.

Scripps has plans to launch a $125-million fund-raising campaign in the fall, and Sharp last year began raising money for a $46-million women’s hospital, to open in 1992 next to Sharp Memorial Hospital.

Sharp HealthCare is the parent firm for a conglomerate of medical facilities that includes Sharp Memorial, Sharp Cabrillo Hospital, Community Hospital of Chula Vista, the Sharp Rees-Stealy medical group, and four skilled nursing facilities, one of them in the booming Temecula area.

Scripps’ facilities include research buildings, Green Hospital and a sports and fitness facility on the Torrey Pines Mesa, and several outpatient facilities throughout the county. It also recently bought land for a research park it plans to build across from its Torrey Pines Road facility.

Sharp has revenue of about $446 million a year. Scripps has revenue from patients as well as research grants of about $300 million.