The 260-bed hospital is slated to open in 2026 and will replace the existing St. Mary Medical Center. It would be operationally and cost prohibitive to upgrade St. Mary to meet the state's earthquake safety requirements going into effect in 2030, the not-for-profit health systems said.
"The High Desert community is growing, and we must advance how we deliver healthcare to meet the changing needs of our community," Bill Caswell, senior vice president and COO of Kaiser Permanente Southern California, said in prepared remarks.
Both Providence St. Mary medical staff, including St. Mary High Desert Medical Group, and Kaiser physicians will deliver care at the new facility. Providence, which said it will work with the community to determine what to do with the Apple Valley site, will serve as the employer and primary operating manager.
The 213-bed St. Mary Medical Center reported $70.5 million in operating income on $387.9 million of operating revenue in 2020, up from $36.2 million of operating income on $345.1 million of operating revenue in 2019, according to Medicare cost reports gathered by HMP Metrics. Cost reports aren't audited by a third party and exclude physician and system-wide data, among other metrics.
The new hospital will continue to follow the Ethical and Religious Directives for Catholic healthcare. Providence St. Mary Chief Executive Randy Castillo will stay in his role.
Renton, Wash.-based Providence lost $306 million on $25.7 billion in operating revenue last year as volume cratered and expenses climbed. The system made $214 million on $25 billion in revenue in 2019.
Oakland, Calif.-based Kaiser, which comprises Kaiser Foundation Health Plan and Kaiser Foundation Hospitals, generated $2.2 billion in operating income on $88.7 billion in revenue in 2020. That was down from the $2.7 billion in operating income on $84.5 billion in revenue it reported in 2019.