Scripps Memorial and Scripps Clinic Plan to Merge

After a whirlwind courtship, Scripps Memorial Hospitals and Scripps Clinic & Research Foundation have agreed to unify next Jan. 1, leaving Sharp HealthCare as the jilted party in a health-care triangle.

The surprise union announced Friday will create the largest health-care concern in San Diego County, an $820-million-a-year conglomerate that will be the county’s No. 2 non-governmental employer.

It also effectively scuttles Scripps Clinic-Sharp HealthCare merger talks that had been going on for a year. There had been reports in the health-care community over the last month that those talks had broken down.

A Sharp spokeswoman tersely said Friday that Sharp was surprised by the move.

“We didn’t participate in the (Scripps-Scripps) deliberations, nor were we advised of them. We had continued our discussions with the clinic regarding development of joint clinical programs literally until today,” said Cindy Cohagen.

She said she had no comment on the future of the joint organ transplant program that Sharp and Scripps Clinic inaugurated last year.

Ironically, it was publicity in early June about the potential Scripps Clinic-Sharp merger that helped bring about the union of the two Scripps facilities.

After reading about the Sharp merger talks, trustees of the two Scrippses began talking informally later in June, said Ames S. Early, president of Scripps Memorial.

The discussions quickly snowballed. Over the last two weeks, administrators entered the talks, and the deal was set, Early said.

Discussions moved so quickly, he added, because Scripps Memorial and Scripps Clinic share a common corporate culture from their roots in the philanthropy of Ellen Browning Scripps.

The newspaper heiress established both the hospital and the research foundation jointly in 1924, but they split in 1946.

Participants rapidly became engaged and enthusiastic as the merger talks progressed, Early said.

“We have tended to share many similar values over the years, so culturally we tend to be very much alike,” he said. “Once you can step above the daily situations, you can see the appropriateness and the potential of this reunification. People very rapidly became convinced that it’s the right thing to do and that it would really be a loss if every attempt were not made to bring this result about.”

Hospital officials said the average patient won’t notice any differences in services at either institution as a result of the merger.

Like Scripps Clinic and Scripps Memorial, Sharp’s hospitals are nonprofit and rooted in private philanthropy. However, Sharp over the last several years has consolidated into what is regarded in the health-care community as one of the most rigid, bottom-line medical organizations in the county.

Dr. Charles C. Edwards, president of Scripps Clinic, downplayed the idea that corporate culture influenced the decision to pursue a merger with Scripps Memorial instead of Sharp. He emphasized instead the longstanding community spirit of La Jolla.

“There is a strong feeling in La Jolla and surrounding areas for these two institutions,” Edwards said. “This gained enthusiasm and moved as fast as it did because it made so much sense--to our joint constituencies, (to) our trustees it made immediate sense.”

The alignment of the two Scripps institutions with each other will create the largest health-care conglomerate in the county.

It also will improve the chances of both institutions maintaining a steady supply of patients in a very competitive environment. Some analysts believe hospital closures are inevitable as San Diego’s health-care industry realigns itself for this tight marketplace.

“There’s no question in my mind that this is the direction of the way health-care is going to go,” Edwards said of the merger. “I think this is going to be a prototype that is going to be watched very closely around the country.”

Early noted that the two facilities will be able to share costly new machines instead of both buying the same ones.

The merger between the two institutions also positions both of them for the competition expected when UCSD opens its Thornton Hospital, being built less than a mile down Interstate 5 from Scripps Memorial--La Jolla.

Edwards would not comment on that, but added, “I think that a combination of Scripps Memorial and Scripps Clinic is a far bigger and stronger institution than either one of them individually and can better compete together than independently, regardless of what the issue.”

Early noted, however, the spirit of cooperation is even extending toward UCSD.

Scripps Memorial officials are in active discussions with UCSD on the possibility of running cooperative programs when the new hospital opens, he said.

In addition to a large private biomedical research institute, Scripps Clinic operates a 173-bed hospital and seven outpatient clinics. More than 350 physicians are affiliated with these operations.

Scripps Memorial operates a 456-bed hospital in La Jolla, a half-mile away from Scripps Clinic, as well as acute-care hospitals in Chula Vista and Encinitas, and convalescent hospitals in La Jolla and Encinitas. It is planning another hospital in San Marcos.

Early and Edwards said discussions are not final on how to meld the two institutions, particularly since both have research institutes.

Scripps Clinic scientists are at the forefront of a variety of biomedical and genetic engineering research. At Scripps Memorial, the Whittier Institute has been established to research basic science issues in diabetes and related conditions.

The agreement announced Friday is a letter of intent, not the final unification agreement. Further negotiations will continue, with the goal of completing the union by Jan. 1.