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How Scripps Health Remains Uninhibited by Uncertain Healthcare Market

Scripps Health, a California-based nonprofit health system, announced a $2.6 billion expansion plan in early November. The new construction is slated to begin in 2021 and will be the largest development in the company’s 125-year history. The renovations will primarily target two of the health system’s five hospitals, Mercy Hospital in San Diego and Memorial Hospital in La Jolla, though all five will be updated.

The planned buildings and restorations will address shifting trends and innovations in the healthcare industry, particularly regarding technological advances. Scripps Mercy Hospital in San Diego is the primary target, with an estimated renovation cost of $1.3 billion allotted for the complete replacement of the facility, which includes a 710,000-square-foot tower. Construction is estimated to span from 2021 to 2027. Mercy Hospital is the health system’s oldest and largest facility, with 520 staffed beds, and will be outfitted to accommodate modern care practices.

Top Revenue Centers for Scripps Health System (FY 2016)

Revenue Center Net Revenue (M)
Inpatient $6,221
Outpatient $2,668
Medicare $397
Medicaid $235
Total Net Income $244

Fig 1 Data from Definitive Healthcare

Other projects include a seven-story patient tower at Scripps Memorial Hospital in La Jolla, a three-story acute care tower at Scripps Memorial Hospital in Encinitas, and seismic retrofitting for Scripps Mercy Hospital in Chula Vista and Scripps Green Hospital in La Jolla. The health system will also build two outpatient oncology centers in cooperation with MD Anderson, reportedly in the hope of strengthening the relationship between the two corporations. All construction is slated to finish by 2030.

Scripps Hospitals by Net Patient Revenue

Hospital Name Net Revenue (M) # Staffed Beds
Mercy Hospital – San Diego $734 520
Memorial Hospital – La Jolla $639 402
Green Hospital – La Jolla $372 166
Memorial Hospital – Encinitas $278 167
Pioneers Memorial Healthcare District (affiliate) $110 107
Mercy Hospital – Chula Vista  – 196

Fig 2 Data from Definitive Healthcare

A spokesperson for Scripps says she believes the improvements will promote job security. With the addition of two new towers at the system’s largest campuses, as well as the increased ability to provide innovative and specialized care, the demand for dedicated staff will remain high. Construction plans include flexible space designs that anticipate rapid technological evolution and care delivery methods, and new care spaces will be easily adaptable to accommodate new equipment and medical devices. Additionally, hospital floors are being designed according to industry best practice and LEAN standards. In order to increase efficiency, nurse’s stations will be closer patients and have more direct access to medical equipment and supplies.

Top 10 Procedures at Scripps Hospitals by Total Charges

APC Code APC Group Title Total Charges (M)
0614 Level 3 Type A Emergency Visits $17.0
0615 Level 4 Type A Emergency Visits $16.9
0080 Diagnostic Cardiac Catheterization  $14.9
0229 Level 2 Endovascular Procedures $10.9
 0332 Computed Tomography w/o Contrast $9.5
0334 Combined Abdomen and Pelvis CT w/ Contrast $8.9
0412 Level 3 Radiation Therapy $8.8
0089 Level 3 Pacemaker and Similar Procedures $6.9
 0260 Level 1 Plain Film Including Bone Density Measurement  $6.7
0336 Magnetic Resonance Imaging and Angiography w/o Contrast  $6.6

Fig 3 Data from Definitive Healthcare

In addition to the large planned expansion, Scripps opened a women’s heart center in San Diego at the beginning of 2017. The center is located on the Memorial Hospital La Jolla campus and is led by four female cardiologists. The health system also revealed to Definitive Healthcare that it will be going live with an inpatient Epic EHR system in 2018, replacing McKesson at all five of its hospitals.

Scripps Health System is not alone in its plans for growth and renovation. According to Definitive Healthcare Data, River’s Edge Hospital (MN) was approved to begin the bidding process on a $33 million expansion starting in 2018. Plans include new surgical areas, patient rooms, emergency department area, urgent care center, a pharmacy, and housekeeping area. Altru Hospital (ND) is also in the process of building a new facility. The replacement of the current hospital, which is older and found to have structural issues, will cost an estimated $250 million. Construction is set to begin in 2019, with the new facility opening in 2022.

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