Scripps Health plans to add third tower at La Jolla, eventually close Green Hospital

Scripps Health announced Thursday that it plans to consolidate its operations in north San Diego, adding a third medical tower to the Scripps Memorial Hospital La Jolla campus and eventually closing Scripps Green Hospital, located about one mile northwest.

The moves do not supersede Scripps’ previously announced plans to build a new hospital in San Marcos, though that investment will move closer to state Route 78.

Chris Van Gorder, Scripps’ chief executive officer, said the private nonprofit medical provider’s governing board recently approved these changes to the organization’s overall development plan. Scripps continues to pursue a strategy that focuses on the northern parts of San Diego County and postpones reconstruction plans for Scripps Mercy Hospital, which operates sister campuses in Hillcrest and Chula Vista.

As he did when he announced the pivot to San Marcos in March, Van Gorder stressed that Scripps must maintain its strength in the north, where the ratio of commercially insured patients to those with coverage from government programs such as Medi-Cal is more favorable.

The executive, like many of his contemporaries, has stressed in recent years that government-funded programs do not cover operating costs, making it harder to take on debt for new buildings if there is less assurance that future revenue will cover repayment.

“We lose money down at Chula Vista, and that’s just going to get worse,” Van Gorder said. “So, as a system, we can keep everything operational if I’m strong in the north.

“If we don’t retain the strength we’ve had historically, then that will have an impact on the south and potentially on the entire health care system. We’re threading a needle, but there’s no question that we’ve got to maintain the fiscal strength that we’ve had in the north.”

That investment will start with building additional outpatient centers in San Marcos and on the Scripps La Jolla campus over the next four years, with hospital construction following, a schedule that pushes completion past 2030.

That’s the year that state law requires all California hospitals to meet extensive earthquake requirements. While Scripps’ existing hospitals already meet basic seismic safety requirements, some do not meet an additional demand that they be able to operate at full capacity after a major earthquake, Van Gorder said.

Even if construction started immediately, there is no way that replacing Green with a new tower at La Jolla could possibly hit that mark.

“With plans and construction, it takes eight years (to build a) hospital,” Van Gorder said.

Green, then, is not closing anytime soon. That is, unless the facility, built by Scripps Clinic and opened in 1977, runs afoul of the state’s seismic deadline in 2030. To buy time, Scripps seems to be relying on safety in numbers, understanding that, while major investments have been made in building new or retrofitting existing California hospitals in recent decades, there are still plenty that will not be fully compliant by the deadline.

“I feel that the state’s not going to come in and shut down 40% of the hospital buildings in the state, which they would have to do if they don’t extend that date,” Van Gorder said.

Scripps is far from the only local medical provider with its gaze turned northward.

Kaiser Permanente recently opened a hospital off Twin Oaks Valley Road near Cal State San Marcos, and Palomar Health already has a commanding position in the region, with Palomar Medical Center Escondido towering over the interchange that connects Interstate 15 to state Route 78.

Scripps planned to build its new hospital campus on a property it has owned for years on Discovery Street, though the parcel was tucked back from South Twin Oaks Valley Road, putting the building farther west than Kaiser Permanente San Marcos Medical Center, a spot that would have been difficult for passing motorists to see.

Scripps announced Thursday it has purchased 15 acres at Discovery Street and Twin Oaks Valley, a location that is at the southeast edge of the North City project, a massive residential and retail district now under construction.

“It’s a much bigger site, so it’s going to make for a bigger hospital and easier,” Van Gorder said. “It works better for us because it will have easier access for patients and ambulances.”

Plans call for a 200,000-square-foot medical office building with four floors above ground and a basement, hosting a cancer center, urgent care, an ambulatory surgery center and three floors of physician offices. A hospital will follow in two phases, opening with 120 beds in an eight-story tower with an emergency department and medical imaging.

Van Gorder said it was not feasible to add significantly to the Green campus due to height restrictions and additional development requirements connected to the property’s location in the coastal zone. Plans are to eventually sell the property, which is adjacent to the legendary Torrey Pines Golf Course,  he said, and use the proceeds to help pay for the northward expansion.

That work would start with a new 160,000-square-foot medical office building on the La Jolla campus, with room to host a cancer center now across the street from Green.

The third tower at La Jolla would be very similar to the pair that Scripps has already built and opened there in recent years. Like its predecessors, the new tower would have eight floors, plus an additional level below ground. It will feature a rooftop helipad built heavily enough to accommodate military helicopters, 168 patient beds, eight electrophysiology labs and four operating rooms.