After more than a year of evaluating offers from San Diego-based Scripps-Health, Palomar Pomerado Health System's board will vote Dec. 15 on whether to accept an affiliation deal.
Under terms of the deal, San Diego-based Palomar Pomerado would contribute its two hospitals -- 395-bed Palomar Medical Center in Escondido, Calif., and 258-bed Pomerado Hospital in Poway, Calif. -- to a joint venture with ScrippsHealth, while retaining approximately $118 million in cash and securities.
Palomar Pomerado would use interest from the assets to make annual payments to the joint venture that would begin at $5.5 million in 1998 and taper to $500,000 by 2024. Some 60% of the payments would be used for capital improvements at the two hospitals; the remainder would pay for improvements throughout the joint venture.
ScrippsHealth would contribute $7 million and Palomar Pomerado would give $6 million to a pool to pay for costs associated with the deal.
The transfer-of-assets offer is substantially different from the management takeover ScrippsHealth had proposed last year, which included a $75 million payment by Palomar Pomerado to Scripps-Health. The new deal also gives the Palomar Pomerado board final approval over the joint venture's decision to close either of Palomar Pomerado's hospitals or make any major changes in services.
If Palomar Pomerado's board agrees to the deal, the 200,000 voters in its hospital district would either vote on the matter in a special election held sometime during the summer of 1998 or as part of the regular district election in November 1998.