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Published on December 20, 2011

OCEANSIDE: Tri-City directors support plan to double hospital's size


BY PAUL SISSON psisson@nctimes.com
** This story has been modified from its original version.

Hospital directors gave initial approval Tuesday to a conceptual plan that could roughly double the size of Tri-City Medical Center.
Joe Kasper, Tri-City's vice president of support services, wheeled out a scale architectural model that showed what is, for all intents and purposes, a new hospital built on the western half of Tri-City's 31-acre campus at Vista Way and Thunder Drive.

Most prominent is an 216-bed, seven-story medical tower, which Kasper said would have ocean views from the third floor up. There would also be a new 134-bed critical care building, complete with a new emergency room and surgery suite.

Tuesday's vote was simply to give hospital administration the initial approval to shop the idea around coastal North County to various community groups so that the public could give its opinions on the rough ideas. More work, and more board votes, would be necessary to move beyond the conceptual state.

Unlike previous Tri-City redevelopment plans, which did not survive a series of bond elections in 2006 and 2008, this plan would keep all of Tri-City's existing buildings intact. Hospital CEO Larry Anderson told board members Tuesday he was optimistic that Tri-City could build the project in phases, without the need for a public bond.

"I'm not saying it's easy, but I believe its doable without a bond," Anderson said.

That statement brought applause from board members, audience members and hospital employees, many of whom suffered through several close losses when Tri-City sought public approval for a $596 million hospital bond for a plan to tear down several existing buildings and replace them.

Anderson said he thought the entire project, which includes a 1,200-space parking garage, could be completed for less than $590 million.

Tri-City's presentation included a rough diagram of how existing hospital buildings might be reused. The surgery building could be used as an outpatient surgery center. A south tower, which currently houses the hospital's intensive care unit, could be converted into a skilled nursing facility. It's newest wing could house a 52-bed forensic unit that treats prison inmates. What is now the emergency department could become a cancer treatment center.

Kasper noted that reusing the existing buildings would please the community.

"One of the issues with the last bond was why do we want to tear things down when we've already paid for the building," Kasper said.

Though it is a public district hospital with an elected board of governors, Tri-City gets the bulk of its operating revenue from billing Medicare and private insurance companies for the care it provides. The hospital faces stiff competition from Palomar Pomerado Health, which is set to open a $1 billion 11-story medical center, complete with healing gardens and private rooms on every floor, in August. Scripps Memorial Hospital in Encinitas also has ambitious renovation plans, which could put Tri-City at a competitive disadvantage for patients who can decide where they want to have surgery or other hospital-based procedure performed.

Anderson said that, in order to finance building a new hospital without asking the community for another bond, Tri-City would need to turn about a 10 percent profit per year. Last year, the community hospital made about $15 million on about $400 million of revenue. That operating margin would have to more than double in order for the hospital to hit Anderson's 10 percent target.

"I believe it's doable," Anderson said.

CORRECTION: A previous version of the story misspelled Joe Kasper's last name "Casper." We apologize.
 
Call staff writer Paul Sisson at (760) 901-4087.
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