Sutter Health lays out $800 million outpatient project

Sutter Health will spend more than $800 million on an outpatient hub in Santa Clara, California, as part of its ambulatory expansion push.

The new medical campuses, which will be known as Sutter East Santa Clara Campus and Sutter West Santa Clara Campus, are slated to open in 2025 and 2027. They will feature a range of primary and specialty care services including diagnostics, imaging, lab, urgent care, orthopedic, cancer, heart and general surgery across roughly one million square feet of revamped office space.

Related: How Sutter is revising its relationship to Medicare Advantage

The new outpatient area will help Sutter expand physician recruitment efforts, treat more patients, centralize care and strengthen its partnerships with Silicon Valley technology companies, executives of the Sacramento, California-based system said. The project is part of Sutter’s broader initiative to open 27 new ambulatory care centers across Northern California by 2027, Sutter President and CEO Warner Thomas said.

“Ambulatory care has been a major focus over the last couple of years as we see more care moving outside of the hospital,” he said. “This project definitely aligns with our strategy.”

The Sutter-affiliated Palo Alto Foundation Medical Group has hired nearly 300 physicians over the last two years, and the outpatient hub will bolster the group's employment efforts, said Dr. Rebecca Fazilat, board chair of the Palo Alto Foundation Medical Group.

Physicians can practice their entire careers at the Santa Clara campuses while closely collaborating with other doctors, she said. Also, many patients will be able to get all their treatment in one place, potentially easing care transitions and limiting missed appointments, Fazilat said.

The nonprofit health system and the commercial real estate firm the Sobrato Organization in November signed a lease with the West Valley-Mission Community College District for five vacant office buildings in Santa Clara, California. Sutter also signed a lease last year with the district for three nearby vacant office buildings. The district controlled all eight buildings.

The phased project will be funded through bond offerings, executives said.

Sutter plans to partner with Mission College to build a new science, technology, engineering and math center and help improve the college's nursing and healthcare administration programs.