Providence, Kaiser Permanente announce plans to build new hospital in Southern California
Expected to open in 2026, the new hospital will replace the Providence St. Mary Medical Center in Apple Valley.
Photo: Sundry Photography/Getty Images
Providence and Kaiser Permanente are teaming up to build and operate a new hospital in the High Desert region of San Bernardino County in California, the healthcare organizations have announced.
The estimated cost for the new hospital is $750 million, according to the Daily Press.
Pending regulatory review and approval, the 260-bed hospital will be built in Victorville and will replace the existing Providence St. Mary Medical Center in nearby Apple Valley.
The project was born out of the need to meet state seismic requirements that take effect in 2030 - bringing the existing hospital to compliance would not be financially and operationally achievable, according to Providence.
Expected to open in 2026, the new hospital will be built on land purchased in 2007 for a new St. Mary Medical Center campus.
Though Kaiser Permanente will have input in the new hospital's operations, Providence will retain primary responsibility for operational oversight including serving as the employer and operating manager.
When the new hospital opens, Providence St. Mary medical staff, including St. Mary High Desert Medical Group and Kaiser Permanente physicians, will deliver care.
In keeping with its Catholic identity, the new hospital will follow the Ethical and Religious Directives for Catholic healthcare. Providence St. Mary Chief Executive Randy Castillo will also maintain his leadership position.
WHY THIS MATTERS
The partnership with Kaiser gives Providence an affiliation that benefits the local community, particularly those areas with significant rates of serious health risks, said Erik Wexler, Providence's president of operations and strategy – South, according to the Daily Press report.
Victorville, the home of the new hospital and the largest city in the High Desert, has a 22.8% poverty rate, according to Providence.
In 2019, the official poverty rate in the U.S. was 10.5% according to the U.S. Census Bureau.
Low-income communities are among the vulnerable populations that can experience health disparities. Recognizing the impact that social determinants can have on health, many healthcare providers are looking for ways to overcome the obstacles that vulnerable populations face when trying to access healthcare.
THE LARGER TREND
The project's announcement marks a change of pace for Providence and Kaiser Prominente. Both organizations felt the pandemic's financial impact.
Providence, a 51-hospital health system, reported a $214 million operating loss for the first nine months of 2020. Despite bringing in $18.9 billion in operating revenues, Providence incurred $19.1 billion in operating expenses over the same period of time. The nonprofit system attributed the bulk of its operating losses to the mandated cancellation of elective procedures in 2020.
In 2020, Kaiser Permanente's operating income fell about 19% compared to 2019, while its net income fell around 15%. Despite this, the nonprofit insurer and hospital operator's financials remained positive.
Like many, the two organizations focused their resources on the pandemic. Kaiser Permanente directed funding and attention into equipment, supplies, facilities and virtual technologies to help tackle COVID-19. Similarly, Providence cross-trained staff and used predictive analytics to prepare for COVID-19 outbreaks.
ON THE RECORD
"The COVID-19 pandemic, which has hit our community so hard, highlighted the need for a new hospital that will meet our area's growing healthcare needs," Castillo said. "We sought a partner that shares our goals and our vision to increase access to care, especially in underserved communities."
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