Kaiser Permanente has changed course and decided to spend between $60 million and $100 million to refurbish its downtown Sacramento, Calif., medical center rather than close the aging, 324-bed facility.
Officials had considered contracting with other local providers and shuttering the 1960s-era downtown facility as early as next year.
Kaiser also plans to invest $24 million to expand the emergency room and radiology department at its 221-bed facility in south Sacramento.
Rapidly growing enrollment in the Kaiser Foundation health plan and increased regional demand for inpatient care fueled those decisions, according to Kaiser officials in Sacramento.
Kaiser had more than 494,000 enrollees in the greater Sacramento area and has added nearly 92,000 more in the past three years.
As a result, the giant Oakland, Calif.-based managed-care organization has shelved plans to contract much of its Sacramento inpatient business to the rival Sutter Health hospital system, said Kaiser spokeswoman Cinde Breedlove.
Seismic retrofitting of the Sacramento hospital could cost Kaiser as much as $100 million, although Breedlove said Kaiser doesn't know exactly how much it will invest in the upgrade.
"We know it's going to cost at least $60 million," she said.
The renovation will be completed in phases, pegged to the success of Kaiser's overall financial turnaround efforts. The system has lost more than $550 million in the past two years but expects to post a small profit this year, officials said last month (Feb. 22, p. 4).
Construction on a third Sacramento-area Kaiser hospital, 116-bed Roseville (Calif.) Medical Center, was completed in 1995, and the facility finally opened last October.