Cumulative Articles regarding PPH hospital plans

by Jim Vander Spek- January 29, 2006

Blue Cross Controversy exposes PPH flawed planning
The Tri-City Hospital District struggle with Blue Cross underscores the economic challenges facing hospital districts. Clearly, this is a hardscrabble business and that fact makes the extravagant plans of Palomar Pomerado Healthcare especially mystifying.

It has been months since the official report was finally released showing that the repairs needed to Palomar Medical Center amount to less than $7 Million. We are still waiting for an explanation of how this relatively small cost squares with the assertion that these seismic retrofits and upgrades are the underlying rationale for a replacement hospital and the open ended, crushing costs associated with such an endeavor.

In little over a year since we passed Prop BB, the PPH facilities master plan has fallen drastically behind schedule and behind budget. Costs are up 30% already and still ballooning. The original plan assumed $210 Million in revenue bonds and $70 Million in contributions from the community and even this was a stretch. Instead of rethinking its grandiose plans, PPH is calling for more debt and greater fundraising efforts aimed at an increasingly incredulous constituency.

Why is the PPH board so quick to saddle our district with additional “revenue bonds?” Where will the excess funds from operations to pay principal and interest on such bonds come from? Will PPH become suddenly unexpectedly profitable? The whole point of passing Prop BB was to keep the district relatively debt free in order to maintain its core mission of keeping its doors open.

Hospital finances are in a permanently precarious position as the Blue Cross controversy so clearly illustrates. One reason is the hemorrhaging cost of the massive and mounting entitlement programs called Medicare and MediCal, which refuse to pay their fair share and hamstring hospital finances. There is a limit to what the private sector, including Blue Cross policyholders can kick in to cover this shortfall. Will PPH, facing tight margins, be able to issue or repay an ever-growing crop of revenue bonds? Is it doggedly pursuing a plan it cannot complete?

Why not spend the $7 Million that is required to fix Palomar Medical Center and then expand and modernize as needed? Our district is large and composed of generous citizens. We are eager to get behind a realistic plan, including a careful stewardship of existing assets and, perhaps, a community hospital in San Marcos. Let's not use the Prop BB funds as a springboard into a financial quagmire.



Hospital plan demands review
By: JIM VANDER SPEK Published 10/1/05

For the last year and a half, the people of North County have been trying to figure out what Palomar Pomerado Health is up to. Now we know.

They are fighting hard for a new hospital in the Escondido Research and Technology Center.
However, it turns out that this hospital is little more than a mechanism for leveraging taxpayer money. The real motivation is to smooth the way for private developers and their project of building 300,000 square feet of unneeded new medical office space. For this plan to work, they need to sweep up all medical professionals from the Escondido downtown district and into the ERTC.
It is noteworthy that renderings and site plans of the new ERTC project are not being pushed forward. This is because those that have been seen are grotesque, including a nine-story hospital with a heliport on top.

The happy talk about a 30-acre "healing campus" appears to have been just a ruse to lock up 30 acres for sharing with developers ----- a classic "Trojan horse."

Although it is generally not recognized, the use of Proposition BB funds is not fixed. Instead, the funds must be used for whatever capital improvements are in the most current PPH master facility plan. Unfortunately, PPH never consulted with the community when they developed their existing master plan.

There were lots of meetings with private developers but none with the cities or their staffs.

The current master plan begs many questions. Is Pomerado hospital construction on budget? Do they have enough funds to build their white elephant on the Escondido hill? Will there be any money left for upgrades in the downtown or for a clinic in Ramona?

Construction costs are going up 20 percent a year, but they have budgeted only 5 percent. How will they make up the difference? Renderings and site plans along with fully adjusted budgets need to be brought current and carefully examined. No one project should go forward until an updated master facility plan ---- which accounts for all Prop. BB funds ---- is agreed upon.

PPH has been deftly playing San Marcos against Escondido. The crucial question is: Why should San Marcos and Escondido get less than what Poway is getting? All citizens in the PPH district are paying dearly and deserve quality, accessible acute care.

The solution is obvious: San Marcos needs a new community hospital and Escondido needs its existing hospital upgraded, pure and simple. If PPH is not able to operate all three, that is even better. Wouldn't it be great to see some fresh blood operating a North County hospital?

Prop. BB funds are there and should be spent properly. Escondido should take the lead and create a joint task force with the leaders of San Marcos so that a mutually beneficial master facility plan can be developed. Better late than never.

Sadly, PPH has let us all down. They can and must become more transparent and cooperative. This is a time for leadership and for standing up to greedy, dangerous developers. Let's not be suckered into a bad plan.

Jim Vander Spek lives in Escondido.

Published 7/21/05: Secret Kaiser-PPH deal raises questions

Kaiser Healthcare’s requirements are trumping what’s best for the citizens in the Palomar Pomerado Hospital district. Kaiser was a heavy contributor to Prop BB and has a no-bid, secret deal with PPH in its back pocket. Most of Kaiser’s patient base lies far to the west and north to that of the PPH district, yet it is poised to prosper from a hospital site tailored to its needs.

What promises were made to Kaiser? Does their deal with PPH hinge on the new hospital being far west of the superlative, historical site in downtown Escondido? With new beds costing us a $million apiece, are we receiving a fair return on our investment? PPH needs to come clean. That this one private company is being given favored treatment should concern all taxpayers.

PPH readily admits to its peers that it is a “second tier” provider. They know that discerning consumers have always fled the district for superior medical care. Sharp and Scripps, among others, have been the way to go. Everyone also knows that traffic gridlock is making the trek to quality much less feasible and palatable.

Generous taxpayers are piling up a mountain of money for facilities, but no level of taxpayer funding will overcome the plodding mediocrity of this monopolistic provider. New, taxpayer provided facilities will not solve the problems created by heavy-handed cronyism and arbitrary favoritism.

However, there is a way to break from special interests and failed management: PPH must be nudged out of the health care business. We need to elect a board that is determined to attract competitive health care providers into our market, while remaining a manager and provider of facilities only.

These moves would attract new and innovative players who could thrive once we are freed from the stultifying control that PPH exercises. Patients and medical professionals could choose between the competing operators of Palomar, Pomerado or some new specialty hospital (housed in the existing Palomar site?) as to best place to invest their time and money. A wide-open private sector is preferable to a government run operation every time.

A level playing field would work wonders. Why should Kaiser be the only non-public player to profit from the passage of Prop BB and the generations of hard work that have built up PPH?

Who knows? By encouraging entrepreneurship, North County may actually become a net importer instead of a net exporter of patients.




Here is a column printed 5/4/05: Hospital Site Reflects Board Blunders

It is no surprise that Palomar Pomerado Hospital district wants to co-opt the ERTC site for their new hospital. This latest assault against Escondido is a pathetic attempt to mask an obvious blunder.

The Proposition BB strategy was flawed from the beginning. Creating a budget and passing a bond before having selected a site, developing a plan or fixing a timetable has placed the cart squarely before the horse. Skyrocketing construction costs virtually guarantee that we will not get the state of the art complex we were promised. The fervent pledge of improved access has already been thrown overboard.

Crowding themselves into the industrial area is a desperate shot at going cheap. Instead of playing by the rules and choosing a site with appropriate zoning and infrastructure, their ploy is to snag entirely unsuitable, inexpensive property.

Any other developer attempting such a massive upgrade in zoning would produce a comprehensive funded plan to overcome every objection. Instead, we get slapped with the prospect of horrendous traffic congestion, lost property taxes, stunning lost opportunities from new businesses, mangled access to acute care and a calculated obsolescence for existing medical facilities surrounding the downtown hospital.

PPH hopes to make Escondido taxpayers absorb all these costs while also pitching in for better planned facilities elsewhere.

The portion of the ERTC not gobbled up by the hospital would necessarily be transformed into ancillary medical offices, completing the blatant switch-a-roo. This would only compound the error. Although Escondido has a dismal history of caving in to real estate sharpies, there is nothing in this deal to commend it. It should be rejected outright.

Of course, PPH could follow through on its threat to waltz over to San Marcos. No doubt they will be rebuffed there also. Why should anyone accommodate this feckless agency and sacrifice a vast tract of land to a facility that will not generate tax income while straining infrastructure? Think of the traffic, the helicopters and the sirens.

But, if such a move does occur, a future, more sensible PPH board will be able to revisit the issue of whether it is wise to obliterate accessible acute care from the historic Palomar site. The aptly named “Covert era” is not permanent and current decisions are not final. Obviously, the present site can be modified to retain its historical role as an acute hospital. It could even become a much improved asset if it were freed from the burden of serving an outsized area.




Here is a column printed 1/26/05: Downtown Site Best for Escondido

Are you ready to take a trip to the new Palomar Medical Center West?

PPH seems determined to place our new and only acute hospital in the remote bowels of the Escondido industrial district. To get there you will need to navigate the 78 freeway, work yourself through the Nordahl interchange, cross a busy Mission Avenue and then, avoid a hyperactive Sprinter train road crossing.

If you think that this is a harrowing route now, wait until the traffic from a teeming 453 bed hospital and a fully developed research and technology center are added to the mix.

One can only conclude that this outrageous choice for the new hospital site is being vetted as a red herring. They cannot be serious. When will they reveal their real plan? Will we start repaying the Proposition BB bond funds before we even know where the new hospital will be built? Did their $million campaign, waged with special interest money, leave them no time to figure out how to keep their promise of staying in Escondido?

Although the existing facility will be used for other purposes, downtown Escondido must remain at the top of any list as a location for the new hospital. It is the optimum spot because it is central for the area serviced with access available from many directions. The infrastructure, including roads, public transportation, doctors’ offices and medical support facilities are all in place. On top of that, local officials are eager to help pull it off.

This may disappoint developers and other sharpies eager to piggy-back on a “fresh start” hospital location, but it is obviously better for everyone else. Why should all the existing investments be made obsolete?

Only one objection is raised against locating the new hospital in downtown Escondido. PPH claims to be a gentle giant that is opposed to using its eminent domain powers for this purpose. This is truly a weak argument! There are huge tax advantages available to property owners targeted for condemnation. In fact, there is virtually no objection to a downtown location, least of all from property owners.

Having Proposition BB funds in their pocket, PPH management is acting as though it can do whatever it wants without accountability. It is urgent that all citizens, organizations and elected officials apply as much pressure as possible on the elected PPHS board to act responsibly. Let’s hope they end up doing the right thing.

This was published 8/28/04


Is it really necessary to replace Palomar Hospital?

Voters are being asked to approve a bond measure proposed by the hospital district for close to $500 million. This massive debt will provide funds to replace Palomar hospital with a new facility somewhere else.Palomar hospital is deemed to be unsafe based on the latest state earthquake standards. Complying with these standards, we are told, forces us to abandon and mostly mothball a perfectly fine facility.

If these new earthquake rules were based on practical concerns for public safety and a convincing scientific argument, this could be understandable. This is not the case. Escondido is not Coachella, Sylmar or San Francisco. Escondido and much of North County sit on a huge granite rock. When major earthquakes hit, this granite formation buffers the shock and limits the risk of damage. This is undisputed.There is another central consideration. Palomar hospital is a vital component for the continued economic health of downtown Escondido. We have invested a huge amount into this facility, related infrastructure and surrounding private development. The hospital alone is our largest employer.

With the hospital leaving, we can expect that the area surrounding the site, which is largely occupied by supporting services, will go into long-term decline. In fact, we are being given no guarantee that any new facility would be located within Escondido.Until just recently, the plan was to retrofit and expand the existing facility. This is now being rejected because it is deemed to be too expensive. I doubt that the economic cost to Escondido was factored into this decision.The discussion about converting some of the space for rehab or psychological uses shows that there is no real plan for this facility.

Perhaps, if they leave, the district should be required to tear down the existing hospital or to fully convert it to productive use. Why leave that problem to future generations? The hospital board is aware of the earthquake argument. They claim that the state has turned a deaf ear to their requests to provide relief from the new seismic rules as they affect Palomar Medical Center and our seismically protected community.What needs to happen before approving the district's plan? First, we need to turn up the heat on Sacramento. With enough pressure, wasteful, unneeded expense could be avoided. Second, we must make sure that there is a comprehensive plan in place for the current hospital site.

Jim Vander Spek is an accountant in Escondido and a regular contributor to the North County Times Business pages

This was printed on 11/1/04 just before the Prop BB election:

The "over the top" campaign to pass Proposition BB shows how eager the health establishment is to maintain their situation. They are spending more than $1.2 million to get your vote.A growing number of critics urge you to see past this special-interest spending spree.

Consider these reasons to vote "no" on Prop. BB: - Prop. BB calls for one new megahospital, or "Mystery Ship," to replace the existing Palomar Hospital in Escondido. This acute hospital and emergency room would serve everyone from Palomar Mountain to San Marcos.

Such centralization will maintain the Palomar Pomerado Health district monopoly but severely restrict access for many, who will be far from the new site.

- The 30 acres of prime land that PPH plans to grab for the Mystery Ship will be removed from the tax rolls and be exempt from building fees. This will demolish tax receipts while simultaneously placing great strain on public services and infrastructure.
- Despite plenty of time to do so, the district has not disclosed its site for the Mystery Ship. There are no appropriate sites, and the failure to pick one makes this proposition the ultimate "pig in a poke."
- Downtown Escondido will lose its only acute hospital, breaking faith with generations of taxpayers and volunteers. Passing Prop. BB also will result in permanent damage to historic Escondido medical office districts and to other downtown businesses. Thousands of jobs will be lost in the downtown area.
- Kaiser Permanente, which will share use of the Mystery Ship, is a major supporter. The bulk of their patients live outside of the PPH district and get a free ride.
- Our freeways, alongside of which the district is determined to place the Mystery Ship, are a mess and getting worse. Such a site is optimum for Kaiser.
- The dollars are huge, increasing property taxes for 30 years and budgeting over $1 million per new hospital bed. After Prop. BB fails, we can demand a better plan that would improve accessibility of acute care for all of us. Such a plan could:
- Provide for a community hospital in San Marcos so that the citizens of that growing city will not need to get on a crowded freeway to obtain service.
- Provide for an improved and enlarged Pomerado hospital in Poway.
- Provide for the expansion and modernization of the present Escondido hospital, using eminent domain powers if needed.