Hospital ‘turning the financial corner’

After nearly succumbing to a sale — and possible closure — South Coast Medical Center has a bright prognosis of fiscal health and well-being, despite serious challenges ahead.

The hospital is rebounding with more patients, more doctors and more employees, Bruce Christian, the hospital’s new chief executive officer, told the Laguna Beach Chamber of Commerce on Tuesday.

“The hospital was DOA [dead on arrival] and now it’s coming back,” Christian said.

“Over the last quarter of 2006, our losses have been 50% less than the previous year. We are turning the financial corner. The future is brighter than it’s ever been, and we are developing a master plan.”

The hospital is owned by Adventist Health, a non-profit, church-affiliated health care company that announced in July, 2005 that the financially ailing facility would be sold. It was pulled it off the market in May, after city officials launched a behind-the-scenes campaign to save it.

The hospital and its emergency room have been in Laguna Beach since the 1950s, and are seen as critical to the city’s health and safety.

Seismic standards

The next big challenge for the hospital is how to meet new seismic safety standards, which were mandated by the state after the 1994 Northridge earthquake.

All hospitals in the state must meet these standards — or close down — with construction required to begin in 2013, Christian said.

Retrofitting the existing hospital would cost $65 million — money that Christian says could be better spent building a new, updated facility.

Christian says the 45-year-old hospital needs to be replaced, and is working to find a partner to accomplish that.

Senior living partner

One possibility is a senior assisted living center, which could partner with the hospital to build a new facility.

“We have an opportunity to put a senior living center on the grounds,” Christian said. “We have been approached by a company who said they would build a new patient tower and buy the land, plus we would have an income stream.”

Christian anticipates that a proposal will be ready to present to the community by the end of the year. The new facility would have fewer beds, in keeping with the new health model that reduces patient stays.

The hospital now has 208 beds, and a replacement facility would likely need only 100-115 beds, he said. Christian said he is also talking with city officials about financial assistance.

“We have had discussions with the [Laguna Beach] City Council and believe they are willing to do what they can,” he said.

Turnaround plan

Christian came in to the hospital around the time that the non-profit, church-affiliated health care company had decided to put the hospital up for sale.

Ironically, Christian — who has his own health care consulting business — had brought Adventist to the hospital one and a half years ago, when the hospital’s future was dim.

When the decision was made to sell it, Christian came on board with the idea that a turnaround was possible.

“I was discouraged when the hospital was put up for sale,” he said. “Within two weeks [of being at the hospital], I was shocked. I could not see how a place in this location could not be successful. I said I would do everything I can to complete the transaction [sale], but I also developed a turnaround plan on the side.”

That was in October, 2005. To ready the hospital for a new owner, Christian upgraded the facility with a new exterior paint job — funded by donations from hospital volunteers — and remodeled patient floors.

New equipment, a new nurse call system, state-of-the-art hospital beds and new management began to attract more patients and doctors, and convinced Adventist that the hospital could be a success. The improvements have resulted in a rebound at the ailing facility, especially in the alcohol and drug treatment program, which has more than doubled its patient count, Christian said.

Some meetings cut

The hospital has had to cut down on the number of AA groups that use its rooms because of the number of new doctors that have joined.

“There are 25 community meetings in the hospital every week, and 25-plus AA groups every week,” Christian said.

“We are coming back, and people are looking for space. We have more demands, more patients, physicians and employees. We’re growing, but we have limited resources to work with.”