Beset by crowded conditions at its two hospitals in La Jolla and Hillcrest, UC San Diego Health says it plans to add a third medical campus, signing a preliminary purchase agreement to buy Alvarado Hospital Medical Center in San Diego from Prime Healthcare for $200 million.

The nearly 800 employees of Alvarado, a 302-bed facility east of San Diego State University, learned of the news in a company announcement Oct. 9.

Patty Maysent, UC San Diego Health’s chief executive, said Alvarado will serve as the university health system’s “east campus” and likely will be added as an option for existing and new patients as soon as December, after the deal is complete.

Though there are plans to build an additional medical tower at UC San Diego’s Jacobs Medical Center in La Jolla and to add beds to an existing $1 billion building plan at UCSD Medical Center in Hillcrest, Maysent said there is a need now.

“Yes, we are planning to add more bed capacity at both of our core locations, but those beds are at least seven or eight years away,” Maysent said. “We’ve got to solve a lot of capacity problems, and we can’t afford to wait that long.”

Maysent also said UCSD intends to submit an application to partner with Tri-City Medical Center in Oceanside. The public district hospital in North County announced earlier this year that it is looking to closely collaborate with an integrated health system capable of helping shore up eroding admissions, especially in its labor and delivery department, which will suspend operations this month due to low patient volume.

Maysent said expansion is meant to release patient pressure felt most acutely at Jacobs Medical Center in La Jolla.

For the past year, the 364-bed facility’s emergency department has experienced regular crowding that has filled hallways with recliners and beds and even turned an elegant auditorium previously used for medical education into an overflow unit for patients awaiting beds in Jacobs’ full inpatient units.

Today, the room’s custom architectural ceiling, lined with decorative bent wooden beams that suggest the shape of an undulating ocean wave, spans a collection of beds, privacy dividers, a makeshift nurses station and dozens of wheeled IV poles rather than seating for meetings.

“We’ve had so much patient traffic that we had to rip up the carpet,” Maysent said.

A first-floor conference room at UCSD Jacobs Medical Center in La Jolla has been converted to an overflow treatment area.

(Alejandro Tamayo / The San Diego Union-Tribune)

Maysent said the cost of buying Alvarado — well under $1 million per bed — is significantly cheaper than building new.

“We’re talking less than $1 million vs. $5 million [per bed],” she said. “The difference is massive.”

She added that UCSD intends to renovate existing patient floors one by one while Alvarado remains in use.

“Our intent would be, because the rooms are small, to renovate and treat them as single-occupancy as much as possible so we may operate at about 160 rooms,” she said.

News of the purchase made Kenneth McFarland, Alvarado’s chief executive for the past 18 months, grin.

“Put the halo of UC San Diego Health on this hospital and it’s going to be one plus one equals three,” McFarland said.

The crowding at Jacobs is generally called emergency department boarding, and this pattern of overuse is a national trend currently dubbed a public health crisis by the American College of Emergency Physicians. The organization recently released a poll that indicated 43 percent of adults would delay seeking care if they knew they might end up being boarded.

Alvarado, with its location along Interstate 8 and a recently remodeled emergency department, is well-positioned to take some of the pressure off Jacobs, Maysent said.

“The idea is that we can decant there and some of these people can get care closer to home and from a combination of community providers and our faculty as well,” Maysent said.

It would be the same idea, she added, if Tri-City’s board ultimately selects UCSD as its operating partner, though that process is known to involve more than one suitor. Gene Ma, Tri-City’s chief executive, said a decision is expected before the end of the year.

Generally, Maysent said, workers at Alvarado should not fear for their jobs.

“Virtually all the staff we’ll be bringing in,” Maysent said. “We’ve got a process set up, we’re going to have job fairs and … information sessions and benefit sessions planned.”

Alvarado comprises two main six-story medical towers, with the westernmost one housing a newly built geriatric psychiatric unit on its third floor.
Alvarado is operating at less than maximum capacity, which Maysent said makes it an even more enticing addition to UCSD’s hospital portfolio.

Patty Maysent, chief executive of UC San Diego Health, is pictured in 2022.

(Eduardo Contreras / The San Diego Union-Tribune)

Alvarado is a key piece of San Diego County’s plans to overhaul the region’s behavioral health system. The county Board of Supervisors approved a $3 million investment in 2022 that would be used to renovate two floors of the hospital’s west tower to add what McFarland said will be 62 behavioral health beds. The idea, officials said last year, is to quickly move existing beds at the county’s mental health hospital on Rosecrans Street in the city’s Midway District to Alvarado, allowing the vacated space to be used for patients who need skilled nursing “stepdown” space after initial treatment.

Though officials estimated in August last year that the Alvarado mental health renovation could be complete by the end of 2023, McFarland said construction has not yet started.

He said the planning stages took longer than originally anticipated but that work has been done.

“We’re not starting from scratch,” McFarland said. “We have schematics that are completed, we have renderings that are done, we have work that’s gone through HCAI [Department of Health Care Access and Information] at the state, which is the organization that has to sign off if you want to build anything in a hospital.”

UCSD was always to run the expanded mental health unit at Alvarado when it is completed, and it was to handle referrals from UCSD Medical Center in Hillcrest when that facility’s behavioral health unit is removed to make room for a new hospital tower on the property.

Maysent said getting an operational agreement together did not go as planned.

“We started the conversations with Alvarado and kind of ran into some challenges — labor challenges and other challenges — that were difficult to overcome,” Maysent said. “So the conversations evolved with Prime to then talk about the potential for the acquisition of the hospital.”

She said UCSD intends to see the project through. “They hadn’t finished their deal with the county, so we’ll have to step into those shoes and finish that with the county, which I’m optimistic about,” Maysent said.

Luke Bergmann, San Diego County director of behavioral health, was unavailable to comment about the situation. ◆