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Articles / 2009

Hospitals overhauled - Three area facilities plot expansion plans

Pacific Coast Business Times
Sunday, 05/03/2009

For nearly 70 years, the Lompoc Valley Medical Center has provided medical services for residents of northern Santa Barbara County. Now it — and other tri-county hospitals — will spend tens of millions to relocate, remodel and renovate their facilities in order to meet the state’s stringent seismic regulations.

Four years ago, California passed a law requiring hospitals to comply with new seismic standards by 2015. Regional medical centers, including the Lompoc hospital, Marian Medical Center in Santa Maria and Community Memorial Hospital in Ventura, are looking at the legislation as a chance to reorganize.

“This unfunded mandate is responsible for most of the hospital construction activity that we’re seeing now … the same reason that Cottage Hospital and Goleta Valley Hospital and all these other medical centers have decided to replace their campuses,” Community Memorial Hospital President Gary Wilde said. “But we do think this gives us the opportunity to provide benefits to the community that we couldn’t in our old facility.”
Most hospitals aren’t taking their expansion plans to the extreme; Wilde said Community Memorial will see an increase from 240 beds to 252, and Lompoc’s hospital is sticking to its original 60. Jim Raggio, chief executive officer of the Lompoc Valley Medical Center, said there’s no need to make it any bigger than that.

The Lompoc hospital consulted its architects, NTD Stickler, before starting a new design. The firm said the current standard is to build one bed for every 1,000 people living in the area. The population service region — Lompoc, Vandenberg Village, Mission Hills, Mesa Oaks, Vandenberg Air Force Base and surrounding areas — is approximately 60,000 people.

“The number of hospital beds required for a community has changed dramatically over the years,” Raggio said in a recent Q-and-A on the hospital’s Web site. “Technological advances, coupled with changing philosophies regarding how long a patient needs to stay in the hospital, have significantly reduced the number of days in bed for patients.”

Another good reason for health-care providers not to overextend themselves during the upcoming remodels: finances. Raggio has estimated that the new Lompoc Valley Medical Center hospital will cost $80 million.

Community Memorial has already spent about $20 million on architectural and engineering permits, but Wilde expects the grand total to reach $300 million with the added costs of land, construction and new equipment.

“The majority of that — over $200 million — will come from borrowed funds, and we hope to have a capital campaign that will bring in $20 million to $40 million,” Wilde said. “We are right now finalizing our plans for financing the project.”

Wilde said the new hospital will be the largest medical building project that Ventura County has ever seen, utilizing a combination of fundraising, borrowed money from investors, cash reserves and income from ongoing business operations.

“About a year ago, we thought we had a really good financial plan in place, and then the economy made us alter that plan,” Wilde said. “Two things happened to require that: the amount of money available for lending by investors went down significantly, and traditional commercial loans that were available a year or two ago are not available now.”

At least the downturn in the economy came with some benefits.

“We’re now getting — instead of the typical two bids per job — about seven bids, with talented work crews and the best-of-the-best companies working on the center,” Lompoc’s Raggio wrote on the Web site.

Marian Medical Center in Santa Maria doesn’t seem hampered by the economy at all; it will actually come out of its rebuild with twice the square footage.

In response to the rapidly growing population of the Santa Maria Valley, Marion Medical Center is also building a new hospital, which “will enhance even further the quality care provided by Marian and enable us to meet the health care needs of the community now and in the future,” according to its Web site.

The new 216,000-square-foot hospital will have 188 private rooms, neonatal intensive care and expanded emergency and critical care units. It is scheduled to open in 2011

In Ventura, Wilde said construction on Community Memorial Hospital should start in mid-2010, and Raggio expects his hospital to be operational toward the end of 2009.


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