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UCSD Health Buys Alvarado For $200M

HEALTHCARE: Transforming 92 Beds to Serve Behavioral Health

UC San Diego Health plans to transform the Alvarado Hospital Medical Center into the UC San Diego Health East Campus, which will include repurposing Alvarado's west tower for behavioral health services. Photo courtesy Prime HealthCare via SDBJ

By Jeff Clemetson San Diego Business Journal

October 24, 2023

UC San Diego Health is expanding its behavioral health capabilities and its presence in East San Diego.

San Diego’s academic health system announced Oct. 10 it was purchasing Alvarado Hospital Medical Center in the city’s College Area neighborhood for $200 million. The hospital will be renamed UC San Diego Health East Campus.

“Alvarado Hospital is attractive on multiple levels,” said UC San Diego Health CEO Patty Maysent. “At the most elemental level, the combination of its talented providers, team members and patient care facilities makes it an absolute gem.”

UC San Diego Health was “actively looking to expand care in eastern San Diego,” she added, because the health system is currently unable to schedule up to 3,000 procedures every month due to a lack of space to house inpatients.

“Twenty-seven percent of our current inpatient population comes from the region that surrounds Alvarado Hospital. With its current average daily inpatient census hovering around 30% of capacity, Alvarado Hospital can quickly accommodate inpatients, many of them closer to their homes,” Maysent said.

Expanding Behavioral Health Services

With the purchase of Alvarado Hospital, UC San Diego Health is planning to expand its behavioral health services by transforming the hospital’s 92-bed west tower to accommodate inpatient and outpatient behavioral health services. The hospital system is currently in negotiations with San Diego County to build out a behavioral health service partnership, Maysent said.

UC San Diego Health will also upgrade the patient care facilities at the 51-year-old Alvarado to meet State of California seismic strengthening requirements for acute-care hospitals by the 2030 deadline set by state legislators in SB 1953.

Work is set to begin January 2024 and during construction portions of the hospital will be temporarily off-line “but overall access to care will not be impacted,” Maysent said. The hospital expects the retrofitting to be completed within four years.

“By reviving an underutilized community hospital and extending its lifetime by 20 to 30 years, UC San Diego Health is helping to expand access to care within local communities that need convenient access to an array of services, especially behavioral health,” she added. “This acquisition provides the university opportunity to create a robust community-oriented health provider model that complements our traditional academic medical care.”

‘Significant Investments’

UC San Diego Health acquired Alvarado from Prime Healthcare, a national health system with 45 hospitals in 14 states. Prime acquired Alvarado in 2010 and has invested more than $90 million into the hospital, including a $14 million new ER facility that added 20 new emergency beds that was completed in 2019.

“With significant investments and dedicated service to our patients over the past 13 years, Alvarado Hospital Medical Center has now reached the point where divestiture to a world-class academic institution like UC San Diego Health, will lead to a new era for this award-winning community hospital,” said Kavitha Bhatia, MD, chief medical officer of strategy for Prime Healthcare.

In addition to purchasing Alvarado, UC San Diego Health is also making significant investments in its health system.

“As part of its 10-year vision, UC San Diego Health is taking a systematic approach to improving timely access to its services and care,” Maysent said.

UC San Diego Health is currently revitalizing its medical center campus in Hillcrest, where a new outpatient surgical center is scheduled to open in 2025. The health system is also planning for a new replacement hospital and “new clinics are opening throughout the region,” Maysent added.

‘Smooth Transition’

UC San Diego Health is immediately conducting “broad engagement” with the Alvarado Governing Board, medical staff, leadership, employees and community to support the transition, Maysent said. Employees of Alvarado Hospital will immediately begin the process of becoming UC San Diego Health team members.

“More than 700 positions will be transitioned to employment at UC San Diego Health. Multiple employee forums will be held to help explain the opportunities and benefits of employment at the university and to help future team members navigate the application process,” said Tonya Jackman Hampton, EdD, chief human resources officer for UC San Diego Health.

“We look forward to a smooth transition and to integrating with the UC San Diego Health network of care and services. We are committed to creating an inclusive and welcoming environment where Alvarado Hospital team members feel welcome and cared for.”

UC San Diego Health

Founded: 1966 CEO: Patty Maysent Headquarters: San Diego Business: academic medical center People: 1,700+ faculty members; 3,000+ students, postdocs, residents and fellows Website: Notable: UC San Diego Health is the No. 1 ranked hospital in San Diego by US News & World Report and recently achieved the prestigious national honor rolls status.

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