Cautious investing and spending is shielding Memorial Health Services from the worst of the credit crisis, but the hospital operator still doesn’t plan to take on any major projects for now, Chief Operating Officer Tammie Brailsford said.
Memorial Health Services, which has been based in Long Beach but is being temporarily run from Fountain Valley, has been “incredibly fortunate,” Brailsford said.
It has some $350 million worth of projects that haven’t been affected by credit issues, she said. But until the credit crisis shakes out, Memorial doesn’t plan on starting anything big, according to Brailsford.
Memorial runs Orange Coast Memorial Medical Center in Fountain Valley and Saddleback Memorial Medical Center, with campuses in Laguna Hills and San Clemente. It is working to sell its other local hospital, Anaheim Memorial Medical Center.
Memorial Health’s ongoing projects include a five-story outpatient building going up at Orange Coast “that is on time and on budget,” Brailsford said. The Orange Coast building, estimated at $48 million, is set to be done next fall.
|
|
Orange Coast Memorial: five-story outpatient building going up at hospital |
The hospital operator also is expanding its Miller Children’s Hospital in Long Beach, which is due to finish next fall.
Meanwhile, Memorial is working on a $65 million project to install electronic medical records that started in 2005, Brailsford said. Electronic records are in place at Saddleback, she said. The entire project should be done next fall.
“We’re going to have a busy fall in ’09, aren’t we?” Brailsford said with a laugh.
The hospital operator has seen a rise in care for uninsured patients, Brailsford said, likely because of hospital closures in Los Angeles.
Memorial has planned to have enough cash on hand to buy monitors and other devices used to care for patients, Brailsford said.
Holding on to cash is a priority among healthcare providers, according to Cathi Cunningham, a Los Angeles-based partner at Deloitte LLP.
“I would say most of my healthcare provider clients have put cash-preservation measures into place,” Cunningham said.
Those steps include evaluating discretionary spending, said Cunningham.
“If a project doesn’t relate to direct patient safety it may be put on hold, or a long-term project may be slowed,” she said.
The credit crisis isn’t really touching on spending related to the state’s hospital earthquake safety law, Cunningham said.
Many hospitals in California are under way on expensive expansions to meet the law’s requirements,in some cases building hospitals from the ground up.
When it comes to raising money, a traditional funding source for hospitals,the bond market,isn’t as viable right now, Cunningham said.
“What I’m seeing are organizations looking at alternative funding,” she said.
Some hospitals are working with bankers to restructure existing debt, according to Cunningham.
Hospital Sale
Orange-based St. Joseph Health System is in talks to buy South Coast Medical Center, a Laguna Beach hospital.
Northern California’s Adventist Health, which now owns South Coast Medical, earlier this month selected St. Joseph as the lead bidder for the 208-bed hospital.
St. Joseph operates 14 hospitals, including St. Joseph Hospital-Orange, St. Jude Medical Center in Fullerton and Mission Hospital in Mission Viejo.
Mission Hospital is leading the buy of South Coast for St. Joseph.
South Coast ranks No. 18 on the Business Journal’s most recent hospital list with yearly net patient revenue of $65 million.
Adventist, which has three hospitals in Los Angeles, Glendale and Simi Valley, has tried to sell South Coast several times in recent years.
Edwards’ Monitor Deal
Edwards Lifesciences Corp., an Irvine maker of replacement heart valves and other devices, is getting into blood sugar monitoring devices for hospital patients.
Edwards signed a deal with DexCom Inc. of San Diego to develop devices for monitoring the blood sugar levels of hospital patients. Edwards will pay DexCom up to $37 million for licensing and milestones, the companies said in a release.
The deal calls for Edwards to handle global sales and marketing of the monitoring device. DexCom will make the devices.
Developing a way to monitor patients’ blood sugar levels via a sensor could help doctors. If blood sugar levels are high for prolonged periods, patients take longer to recover from surgery and infection risks increase.
