Center needs financial help, CEO says

The prognosis is good for South Coast Medical Center’s future, but recovery is not guaranteed, according to an update presented Tuesday to the City Council.

Hospital President Bruce Christian told the council that a cooperative effort with the city — and significant amounts of money — are needed to ensure that the not-for-profit facility continues to provide a high standard of medical care for the community.

“I am committed to seeing it done,” Christian said. “Together we can keep our hospital operating.”

One stumbling block is a state mandate that requires the center to earthquake-proof the facility by 2013.

“Unfortunately, the mandate did not include providing any funding from the state to pay for retrofitting,” Christian said. “Larger hospitals have the ability to get financing, but for smaller community hospitals — especially those that are not for profit — the expense is astronomical.”

The cost to retrofit the South Laguna facility is estimated at $65 million. However, the cost of materials and labor continues to escalate on major projects.

Another issue is the need to modernize the outdated facility, which has begun and continues. The fourth floor of the tower, which houses the only in-patient dependency rehabilitation program in South County, and the medical-surgical unit on the third floor recently were remodeled.

This year, the natal unit will undergo remodeling.

“As those of you who live in Laguna Beach know, there is no other place like it,” Christian said. “Delivering a child and watching the dolphins is a unique experience.”

Also rare: the response time for care in the hospital’s award-winning emergency room. Located on the entry level floor, walk-in patients receive “door-to-doctor” service in 20 minutes, Christian said.

“That is highly unusual for an emergency room,” Christian said.

He said it costs millions each year to maintain the emergency room, and the hospital will need some on-going financial assistance, as well as finding new ways to generate income to continue the service, which by law must include acute care beds.

“One solution we are looking at is the potential for developing affordable senior housing,” Christian said. Fair market value would generate money for the retrofitting and other costly projects, he said.

“South Coast Medical Center wants to remain in Laguna Beach,” Christian said. “We have a history here, and we are committed to this hospital and to this community.”

Not too long ago, that commitment was down the tubes. In 2002, rumors were rampant that center owner, Adventist Health, was investigating the relocation of the hospital.

Councilwomen Cheryl Kinsman and Jane Egly were appointed to a subcommittee to work with the center’s administration to seek remedies to keep the hospital in Laguna Beach. Assistant City Manager John Pietig also participated.

The city and the center jointly funded a telephone survey in 2005 to determine the level of community interest in keeping the hospital in town and how much the residents were willing to help.

No surprises there. More than 80% of the residents polled wanted the hospital to stay.

When relocation plans didn’t pan out, Adventist Health decided in 2005 to sell the facility. Neighboring hospitals expressed some interest, but none were fruitful.

However, negotiations were underway in 2006 with a consortium of doctors who reportedly wanted to make the hospital a for-profit facility. But in May, the hospital was abruptly pulled off the market, under the administration of the newly appointed CEO, Christian.

“I want to say how very fortunate we are to have Mr. Bruce Christian as CEO of the hospital,” Kinsman said. “Jane and I realize how close were to losing the hospital a few years ago. I threatened to strap myself to the tower, but Bruce saved me.”

Kinsman urged residents to use the hospital.

“The more we use it, the more likely it is to stay,” she said.

Christian said it can be done.

“But we can’t do it alone,” Christian told the council. “We need your help and understanding to continue to do the right things for the right reasons.”

Hospital history

The death of a Laguna Beach police officer who did not survive a 25-mile trip to the nearest hospital after being shot in the line of duty outraged residents in 1954.

They committed themselves to build and maintain a hospital to serve Laguna and nearby South County communities — most of them not yet cities.

The Irvine family donated the land, and residents raised the money — donor names are on a wall of honor — to build the hospital, which they insisted must be not-for-profit.

South Coast Hospital admitted its first patient in July 1959.

After expansion, the facility was renamed South Coast Medical Center.

Adventist Health, which owns and operates more than 100 not-for-profit hospitals throughout the United States, bought the 208-bed general acute care medical center in 1998.

The hospital provides sub-acute care for long-term patients, the Pacific Recovery Center for drug and alcohol dependency, a medical/surgical unit that includes an intensive care facility, operating rooms, rooms for testing, screening and meetings, laboratories, a cath lab where heart patients can receive stents and other treatments, delivery rooms, physical therapy, cardiac rehabilitation, eating disorder and senior programs.

For the past several years, the hospital has operated at a financial loss. Adventist Health has covered the deficit with financial assistance in excess of $17 million.

Hospital officials say the facility is dated and needs expensive modernization, including rebuilding the power plant, as well as costly earthquake retrofitting.

South Coast Medical Center serves the cities of Laguna Beach, Dana Point, San Juan Capistrano, West San Clemente and Aliso Viejo.