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Thursday, Jun 13, 2024

Hoag Brings Private Sector to Healthcare Research

CEO Heading $1B Building Program

Robert Braithwaite likes to use a new phrase to describe what Hoag Memorial Hospital Presbyterian is doing—“privademics.”

The idea is to combine the speed of the private sector with the talent of academic researchers, the chief executive of Hoag said.

“When you look at the Mayo Clinic, they’ve brought together the private sector and academia,” Braithwaite said.

“The space between those two major categories is where Hoag is going.”

Braithwaite is overseeing a billion-dollar building program at Hoag, which ranks No. 2 on the Business Journal’s annual list of the largest hospitals, reporting revenue climbed 8.2% to $1.36 billion for the year ended Sept. 30 (see list, page 28).

Braithwaite, who’s been leading the hospital system since 2013, gave the Business Journal a personal tour of its latest effort, the renovation of the Patty & George Hoag Cancer Center in Newport Beach.

Hoag spent more than $20 million to gut and rebuild two floors of the facility, which was originally opened in 1990 for $23 million; George Hoag is the son of Hoag founders George and Grace Hoag.

The renovated facility includes 35 medical oncology infusion treatment spaces, 35 exam rooms, a pharmacy capable of making its own chemotherapy treatments and areas where surgeons can work closely together with oncologists to outline surgery and/or treatment plans.

Hoag is planning to expand comprehensive care at its cancer centers in Newport Beach, Huntington Beach and Irvine from a total of 60,000 to 160,000 square feet. The expansion with the newest technology and processes is helping Hoag to recruit some of the world’s finest doctors from hospitals such as Baylor and Kettering Health, Braithwaite said.

“This whole system that is being developed for cancer allows us to attract some of the best physicians in the country,” Braithwaite said.

“Being located within a world-class comprehensive hospital with access to hundreds of subspecialists that can work seamlessly together with Hoag’s cancer team to treat all of a patient’s health needs truly sets Hoag’s care apart.”

Shadow of Hoag

Braithwaite is a longtime Orange County resident, quipping that he was born “in the shadow of Hoag.” He grew up in Huntington Beach at the corner of Brookhurst and the Pacific Coast Highway. His father permitted him to surf in the mornings before school if he kept up his grades. To this day, he’s still active in water sports, such as surfing wakes of ski boats.

While attending school, he originally thought of going into medicine.

“I took some business classes in my last semester of school and loved it,” Braithwaite said. “I thought I could mix the two worlds.

“Providing care at scale was awesome and the variety is unlike any other profession; it’s extraordinary. One month, the focus is on cancer. The next month is pulmonary, and the following month is about virtual reality. You’re just constantly in this learning cycle.”

Braithwaite earned a bachelor’s degree in health management at Brigham Young University and a master’s degree in health services administration from Arizona State University.

He started as an intern at Hoag in 1992 and eventually served a variety of roles, including purchasing manager, director of materials management and vice president of operations.

In 2009, he was chief operating officer of Hoag’s entire health care network including both campuses of Hoag Hospital. He also served as chief administrative officer of Hoag Hospital Irvine which opened in 2010, leading the process of building, staffing and licensing both Hoag Hospital Irvine as well as Hoag Orthopedic Institute.

Nowadays, he manages a system that has 1,800 physicians, 400 physician offices, 15 urgent care facilities, 10 health and wellness centers, seven specialty institutes and three hospitals. He also oversees the Hoag Hospital Foundation, such as its upcoming golf tournament in March that features several Hall of Fame players like Fred Couples, Ernie Els and John Daly.

How has the industry changed in the past 30 years?

“The vast majority of what we do is no longer inside the hospital. It’s outside,” Braithwaite said.

“98% of the care people get happens outside the hospital. To build a bed in California costs about $3 million. There is an incentive to perform work outside of hospitals.”

Technology has enabled a reduction in hospital stays to less than four days on average from the seven-day average seen three decades ago, he said.

“More and more, hospitals are becoming like giant critical care units. Anything sub-critical care has already moved out.”

Irvine Expansion

Hoag is spending $1 billion to expand its Irvine presence with six new buildings, two new parking structures, 155 inpatient beds, eight operating rooms and two additional procedure rooms. Hoag is adding 120,000 square feet of ambulatory facilities and substantial renovations to the existing facilities.

The expanded Irvine location will be called the Sun Family Campus after a $50 million gift by Diana and David Sun, co-founder of Kingston Technology Co., the second-largest private company based in Orange County with $15 billion in revenue for the 12 months ended Dec. 31, 2021.

Rather than concentrate on building a general-purpose hospital, Hoag is developing two new specialty hospitals to focus on three areas: Women’s Health Institute, the Hoag Family Cancer Institute and Digestive Health Institute.

“The idea in Irvine is a specialty hospital,” Braithwaite said. “The advantage is you get deep expertise and is highly focused. Patients and physicians love it.”

Hoag is also emphasizing clinical trials at its facilities, working closely with companies such as Masimo Corp. (Nasdaq: MASI), the Irvine-based maker of medical devices like pulse oximeters.

“If you are a company and want to see if your product has legs, efficacy, we’re going to be a lot faster,” he said.

“Biotech companies love it because they can actually move a clinical trial really fast in the private setting compared to an academic center where you’ve got a lot of committees and structures to get through.

“We can get a clinical trial up and running within three months versus a place like USC that often takes 10 to 18 months.”

Medical Building Boom

The expansion comes at a time when Orange County is seeing a boom in the construction of medical facilities.

UCI Health is spending $1.3 billion on a new hospital complex in Irvine while Providence St. Joseph is constructing a 137,000-square-foot women and family center in Orange. Providence Mission Hospital aims to spend $712 million on a new hospital at its Mission Viejo campus and two new urgent care facilities in San Clemente and Rancho Mission Viejo.

The City of Hope is spending an estimated $1.5 billion in Irvine for its Lennar outpatient cancer center, which opened last year, and an adjacent hospital, scheduled to open in 2025.

Braithwaite doesn’t see a competition with City of Hope because he said that it concentrates on cancers involving blood such as Leukemia While Hoag’s focus is on cancer in solid masses, such as tumors.

Nor is he worried about the oversaturation of medical facilities, pointing out that market demand is driving the building boom. He added that it’s cheaper to build new ones rather than retrofit existing facilities that can be more than 50 years old.

Braithwaite sees Orange County becoming as famous as medical complexes like the Mayo Clinic or the Texas Medical Center in Houston.

“When Hoag benchmarks, those are the names that we actually think about.”

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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