Scripps Health Statement in Response to UCSD Announcement

San Diego – Today’s announcement by the University of California, San Diego (UCSD) to build a 10-story, 248-bed hospital tower on the Thornton Hospital campus will destabilize the health care safety net across the region.

As the San Diego Union-Tribune reported today, it duplicates health care services in La Jolla by moving services out of Hillcrest with the intention of capturing more privately insured patients.

UCSD has made it clear for some time that it has wanted to move health care services from Hillcrest to La Jolla. Still, we are surprised that today’s announcement is inconsistent with UCSD’s commitment to the community three years ago in its own documents “to operate approximately 250 hospital beds … in Hillcrest until 2030.” The question our community must ask is what kind of hospital will be left in Hillcrest once UCSD relocates these key services to La Jolla?

Our concern remains the same as it was in 2005 when this plan was originally announced. That is it further strains the region’s already fragile health care safety net. Moving health care services from an underserved community will create a ripple effect with all providers in the region. If UCSD provides fewer services in Hillcrest, the other providers, such as Scripps, will be responsible for a larger share of the underserved communities. Last year, Scripps devoted more that $287 million to community benefit programs and services, $264 million of which went to providing uncompensated care. Much of that care was provided at our Scripps Mercy campuses in Hillcrest and Chula Vista.

We welcome competition, and we will compete with anyone fairly. In this case, we are competing with our arms tied behind our back. As a government hospital, UCSD receives special benefits that other hospitals do not. It gets better reimbursement from Medi-Cal, has access to voter-approved bonds to help pay for the construction of its hospital and it avoids local fees and enjoys a more streamlined process when it seeks approval for construction projects.

This announcement is alarming considering that UCSD is the most profitable hospital in California with a $200 million operating margin (21 percent) according to recent Office of Statewide Health Planning and Development (OSHPD) data. No other California hospital comes close to that profit margin. If Scripps were generating a 21 percent margin, our tax-exempt status would be questioned and/or threatened.

As an integrated health care delivery system with five hospital campuses and 19 outpatient clinics, Scripps generated a $101 million margin last year — a margin of 4.7 percent. By non-profit hospital standards, that is a very strong performance and along with the generous support of our donors, has allowed us to reinvest in our health system and employees. It allows us to provide quality care to patients across the San Diego region. As a system, the margins we generate in the north make possible our mission in the south. UCSD’s decision threatens our ability to maintain that balance and we will need the support of the community to meet this challenge.

We will compete vigorously by completing the Scripps Cardiovascular Institute at Scripps La Jolla by 2015 to bring together the region’s strongest and largest heart care program. We will complete our planned cancer center on the Torrey Pines Mesa by 2012. We will rebuild the emergency and critical care facilities at Scripps Mercy San Diego and Scripps Encinitas. And we will continue to expand our outpatient and physician network to support our specialists and specialty service lines.

Scripps appreciates the generous community support we receive from our grateful patients and donors who are helping us achieve our vision for the future of health care. We will continue our mission – proving exceptional health care to our patients and the San Diego community.

Contact: Don Stanziano

Phone: 858-678-7190


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