Providence Mission Hospital will not pursue small-scale model to keep ER in Laguna

Providence Mission Hospital announced this week it does not plan to build and operate a smaller-scale hospital in Laguna Beach.

City leaders and the healthcare operator had come to an agreement in September to study the feasibility of placing a micro hospital at the South Laguna campus, providing for the continuation of emergency services in town.

In a meeting at City Hall on Tuesday, Providence informed city officials that it had concluded the evaluation, finding the model unsustainable. Hospital officials, in a statement released the same day, said the project would pose a $160-million funding gap, before accounting for operating costs.

“After careful evaluation, we have concluded that a smaller-scale hospital is not a clinically, operationally and financially sustainable model,” the statement read. “We intend to move forward with our planned $40-million investment to develop an outpatient-focused advanced care center on the existing Laguna Beach campus.”

Providence’s plans provide for advanced imaging (CT, X-ray, MRI, ultrasound and mammography), urgent care and laboratory services.

Additionally, it anticipates the advanced care center would provide for outpatient surgery (ambulatory surgery focused initially on elective orthopedic procedures), as well as for primary and specialty care (expected offerings include cardiology, OB/GYN and gastroenterology).

“Our goal is to develop a model centered on the healthcare services community members use most frequently, with connections to inpatient, emergency and specialty care available through Mission Hospital Mission Viejo and other regional providers,” Providence’s statement added.

Five Providence Mission Hospital physicians co-authored a letter in support of the operator’s decision to transition to a “comprehensive ambulatory health campus” while remaining connected to higher-level care regionally.

“Providence has an opportunity to create something in Laguna Beach that is more accessible for everyday healthcare needs, better integrated across specialties and connected to comprehensive hospital care when patients need it most,” the letter reads. “And, Providence has a responsibility as the community’s healthcare provider to use resources wisely, and to consider the best path forward that will provide sustainable care, especially given the pending headwinds that not-for-profit health systems are facing as [federal budget cuts] go into effect. We believe that is a future worth pursuing.”

Laguna Beach’s hospital was built in 1959, following the 1953 in-transit death of wounded police officer Gordon French, who was en route to Hoag Hospital in Newport Beach.

Seth Teigen, the chief executive of the hospital, informed the city in a January briefing that Providence did not intend to continue running an acute care hospital, citing estimated costs of between $300 million and $350 million to bring the facility into seismic compliance with state regulations by a 2030 deadline.

Public outcry has followed that development, with a Change.org petition calling for Laguna Beach’s emergency department to be saved gathering 8,685 signatures since its creation in April.

Councilmembers Alex Rounaghi and Bob Whalen serve on an ad hoc committee pertaining to hospital matters. A hospital task force, made up of 16 community members with expertise in the medical field and in land use, has been formed.

Although city and hospital officials met this week, the ad hoc committee members said the findings of the evaluation of the micro-hospital model were not presented at that time.

“The plan was for them to present the study to us, and then that study would go to the task force later this month, for the task force and the public to review it,” Rounaghi said in a phone interview Thursday. “Right now, we don’t have a study for them to review, so we need to see that study.”

City leaders also continue to seek information around the impact that the loss of the town’s lone emergency room would have on those in Laguna Beach and neighboring communities.

“We’ve been looking to get some analysis from Providence that demonstrates that there’s not going to be an impact for the closure of the ER,” Rounaghi added. “In 2016, the [state] attorney general weighed in and said that closing this ER would have a significant impact on Laguna and the surrounding community. We are not aware of any evidence to change that conclusion.”

The medical subgroup of the task force, Whalen said, will be charged with compiling an analysis of the healthcare needs of the community.

“Since Providence has now, I think firmly, and it looks like finally, closed the door on running an acute care hospital in Laguna, I think we’ve got to focus on can we locate another operator that’s willing to come in and serve the community,” Whalen said Thursday.

Laguna Beach’s emergency department receives approximately 17,000 visits per year, with about 3,400 of those patients requiring admission, according to data shared by hospital officials.

“Our fire department, who runs our ambulance service, has looked at delivery times to the other locations, and it’s best case 25 minutes to either Kaiser up the canyon, or ‘Big Mission’ Mission Viejo, or Hoag Newport,” Whalen added. “… [Rounaghi] has done the ride-along, and it was an hour and 40 minutes [round trip] to ‘Big Mission’ on a summer weekend.

“We’re concerned about that from a medical standpoint, and we’re concerned about it from a public safety standpoint. Every time our ambulance service, and sometimes engines needing to accompany them, have to go out of the community, we lose capacity in our community to address medical needs, fire needs, and that’s a real concern versus just dropping patients locally.”