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Thursday, May 17, 2012
Regional Focus: March 2008
A Better Pill
Folsom’s medical sector stays healthy in a sluggish economy
Story by Wes Sander
Folsom is finally becoming a two-hospital town. Long the sole domain of Catholic Healthcare West for inpatient care, Folsom has filled out its southern boundary enough to spur Kaiser Permanente to open three new facilities there in the next seven years.
With growing competition between the two hospital operators, Folsom is becoming, like its counterpart cities around greater Sacramento, a microcosm of the region’s full-speed healthcare expansion. And those new and growing hospitals, among the region’s larger employers, are accounting for a healthy portion of job growth.
Kaiser, with its hospitals and health plan, is one of the nation’s largest healthcare providers. Since 2002, Kaiser’s presence in Folsom has been limited to 116,000 square feet of medical offices at the city’s southern boundary. The office houses about 240 doctors, administrators and other employees.
That number will jump to about 2,000 by 2015, says Kaiser spokesman Jeff Hausman. The nonprofit is adding 70 employees to a new ambulatory surgery facility that opens this year; 570 physicians and staff at a second office building in 2014; and 1,300 workers at Kaiser’s new Folsom hospital, which opens in 2015.
Beyond Folsom, Kaiser has plans and timelines for new office buildings, emergency rooms and medical centers in Roseville, south Sacramento, Lincoln and Rancho Cordova. Combine this expansion with similar projects by the region’s other hospital operators, and it spells rapid growth in healthcare employment.
Closer to the center of town, Catholic Healthcare West is finishing an emergency-department expansion at its Mercy Hospital of Folsom while enlarging its telemetry unit. It expects to spend $28 million on the emergency department, expanding roughly five-fold to 22,410 square feet.
“We believe that will give us another five years of bed capacity,” says Cindy Holst, CHW’s regional vice president of strategic marketing. “We know that growth is beginning to slow down everywhere, but we believe the projects we have in place will serve the community for the next three to five years.”
CHW expects the California Office of Statewide Health Planning and Development to approve its current plans for expanding the hospital’s telemetry unit, and construction should start in November. Mercy is upgrading equipment too, adding a 64-slice CT scanner for higher-quality imaging.
“We think [the emergency department] will carry us for at least the next decade or so,” says Don Hudson, Mercy of Folsom’s president. “I can’t really speculate in terms of how far into the future. We are continually updating our strategic plans. Folsom is growing, so it’s obviously a place that CHW is keeping its eye on.”
It’s all part of the steady growth in medical facilities that has placed the region among the state’s most robust markets for the industry. Locally, the area’s four hospital operators are spending more than $1.5 billion on new or expanded facilities in the next few years, with enough projects still in design and approval stages to push that figure well over $2 billion.
Recent decades have seen employment in the region’s hospitals more than double. In December, there were 29,900 workers, according to California’s Employment Development Department, up from 13,800 in 1990. And it’s expected to keep rising in the next few years, keeping up with population projections.
Folsom has stayed among the state’s fast-growing cities for several years; it grew by roughly 25 percent between 2001 and 2006, with a population estimated by the state’s Department of Finance at just below 71,000 by early 2007. That’s why Kaiser opened its Folsom office building in 2002.
But the city’s regional counterparts — Elk Grove and South Placer — easily eclipsed its growth. One of the nation’s fastest-growing cities by mid-decade was Elk Grove; it expanded by 80 percent in six years, and topped 136,000 residents last year. In South Placer, the combined populations of Roseville, Rocklin and Lincoln grew 44 percent, reaching 196,000.
Much of this growth has occurred while the region and the state suffer from a long-term shortage of nurses. UC Davis is building the region’s only nursing school offering advanced degrees: The Betty Irene Moore School of Nursing is set to graduate its first class in fall 2009. The UC Davis School of Medicine says it expects to graduate 50 master’s and eight doctoral students from that first class. Once it hits full capacity, the school expects to award more than 450 degrees annually.
The nursing school is being funded with a $100 million grant from the Gordon and Betty Moore Foundation — the largest the university has ever received and the largest nationwide for a nursing school.
In addition to adding to the nursing pipeline, UC Davis estimates its med-school graduates comprise 35 to 40 percent of practicing physicians in Sacramento and Yolo counties and 20 to 25 percent in the greater area.
Just as all this academic energy complements the growing market, the big-three care providers — Sacramento-based Sutter Health, Kaiser and CHW — are each spending more than $600 million on new facilities in Sacramento, South Placer, Elk Grove and Folsom. And that total only accounts for approved projects in the pipeline: Sutter, for one, says it will spend more than $1 billion in regional facility expansion and new construction over the next decade.
In Folsom, Kaiser is spending $41.6 million on the first phase of its medical center at Palladio Parkway, adjacent to an upcoming shopping mall. That first phase will be the center’s Ambulatory Surgery Care Pavilion. Kaiser won’t say how much it’s planning to spend on its next projects: a 300,000-square-foot medical office and a 450,000-square-foot hospital with 224 beds.
Although it’s the largest of the region’s healthcare organizations, Kaiser operates fewer local hospitals than its competitors. Kaiser runs three hospitals to Sutter’s five and CHW’s six, but it also runs 10 medical offices filled with the doctors who work for Kaiser’s own health plan.
And now, finally, Kaiser is entering the upper realm of emergency care in the Capital Region. In December, Kaiser beat out Catholic Healthcare West, its competition in Folsom, to build a trauma center in the south part of the county. After a long contest that played out in the media, county supervisors voted 3-2 for Kaiser’s South Sacramento Medical Center over CHW’s Methodist Hospital of Sacramento.
If upgrades go according to schedule, Kaiser will have the emergency room at its South Sacramento Medical Center upgraded for trauma care by late 2008.
When might the same scenario play out near Folsom? It’s still not on the radar of potential parties — either CHW, Kaiser or the county — so Folsom and the surrounding area may need a few more years of brisk population growth before that opportunity arises.
The road to trauma designation can be a long one, generally starting when a hospital requests it, says Bruce Wagner, Sacramento County’s chief of emergency medical services. The county analyzes the patterns of local trauma cases and — once it’s agreed that a designation is warranted — amends its trauma plan. The county’s next steps are submitting the plan for state approval and requesting proposals from care providers.
“It is not something that is on our radar screen right now,” says Hudson, president of Mercy of Folsom. “We have patients here to provide services to, and that’s what we focus on.”
