Hospital wants city’s blessings

Barbara Diamond

South Coast Medical Center will most probably move out of Laguna

Beach, but hospital officials want to leave with the city’s

blessings, or at least without bad feelings.

“We need to involve the community that founded us,” said Joe

Orsak, president of the hospital’s fund-raising foundation. “We want

the city to understand our dilemma.”

Hospital officials said Monday that they don’t have the $72

million to retrofit the campus to meet a state mandate on earthquake

safety standards and to upgrade existing buildings. They said that

even if the medical center did have the money, the campus would have

the same limitations that have put the hospital in a financially

precarious position: primarily, not enough patients and doctors and

not enough clout with managed care organizations.

“If we had the money, we would rather put it into new programs and

state-of-the art equipment,” Orsak said.

“The bottom line is we don’t have the $72 million, and if we did,

it doesn’t pencil out.”

A new hospital in a different location is estimated to cost $110

million and be 10 years down the road. Hospital officials are seeking

a five-year extension of the 2008 deadline for the mandatory

retrofit. If denied, the hospital would face the expense of the

retrofit as well as the cost of the new facility, should the decision

be made to move.

“Without the extension, we either do the retrofit, close down or

refuse to do it and see what happens,” Orsak said. “Doing nothing

would be morally and politically questionable. We would at least have

to start.

“Legally, we would only be obligated to spend the $52 million, but

as a practical matter we should do the whole project at one time,” he

said.

The extension to 2013 would allow the hospital more time to

explore its options, Orsak said.

“In four or five years, who knows what earthquake technology will

be available and at what cost?”

It is also about the period of time estimated for the construction

of a new hospital.

Mayor Toni Iseman said it would as unacceptable for the hospital

to move as it would be to have development in Laguna Canyon.

“I do not think the council would ever support a move,” she said.

“Too many creative, talented successful people who live in and

love Laguna know how much the hospital means to this community. It

would be like an amputation.”

Options outlined Monday by hospital officials were:

* Rebuilding and retrofitting the hospital.

The pros outnumber the cons, according to a presentation by Gary

Irish, hospital chief executive officer. However, the pros are not

all that swell, including two that seem to fit better on the con side

of the ledger: The hospital would continue to lose a market share of

acute care and have to develop new sub-acute care programs to draw

patients.

* Converting the hospital to a non-acute care facility.

Services would shift to behavioral health, which officials said

would be detrimental to medical and surgical physicians, who would no

longer be able to use the hospital for in-patient medical and

surgical care.

The proposed cancer center could stay, whether or not the hospital

moves, officials said.

“The center was intended to be a specialty that would draw

patients from outside HMOs and from outside out market area,” Irish

said.

* Turn the existing campus into a satellite campus for a new acute

care facility -- an emergency, medical and surgical care hospital

located elsewhere.

The award-winning emergency department would be reduced to an

urgent care facility if the hospital moved because patients could not

be transferred to beds for follow-up care.

* Close the existing hospital and build a new one to the south

east of the present campus.

The cons presented by Irish include a $120-million expenditure,

Laguna residents’ concerns about health care and the general

difficulty of change.

Building from scratch would allow the center to take advantage of

modern hospital design that improves efficiency and includes retail

space for restaurants, pharmacies and Starbucks, etc., Irish said.

The pros, he said, are increased market share and growth

potential, increased leverage with insurance companies, better

design, and better access for San Clemente, San Juan Capistrano and

Dana Point patients.

“It takes 100,000 exclusive people and about 300,000 in a broader

community to support a hospital,” Irish said. “South Coast Medical

Center had 84,000 visits in 2002, about 16,000 by Laguna Beach

residents.”

The SCMC board is considering all its options, Irish said.

Hospital executives are trying to arrange meetings with the City

Council and South Laguna Civic Assn. to explain their problems.

“We want them to tell us what we can do to help,” Councilwoman

Cheryl Kinsman said. “We want them to stay, and we will do whatever

we can to make that happen.”

Irish said no formal decision has been made -- formal being the

operative word. Officials give little hope of keeping the existing

hospital in Laguna. Moving out has been under in-house discussion for

more than a year.