Sutter Health to postpone hospitals - San Francisco Business Times:

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Sutter CEO Pat Fry told top officialx March 20 thatthe Sacramento-based system is “reevaluating and reprioritizingg all capital projects and requests,” from large to small, and, “We are not goint to be able to complet e all of the capital projects that have been requeste (internally) according to the desired timelines.” Constructio n projects that haven’t yet started are on hold, Fry told the San Franciscoi Business Times on Tuesday, except for planning and entitlement work. He blamed the shakyu economy and expensivebond markets, sayingv “the cost of capital is probably three timesw what it was a year ago.
” that means prep work on huge Suttee projects like ’s proposed $1.7 billion Cathedraol Hill campus, ’s 11-story, $350 million new inpatient tower in Oakland and ’ws roughly $300 million rebuild in Castro Vallety will continue, but actual construction work will not, untill convincing signs appear that the economyh is improving and the bond markets loosening. The rebuild of in which is wellunder way, will not be Fry said it could take 18 to 24 months for Sutterd to complete the design, planning and entitlements procesas at Cathedral Hill, Alta Bates Summit and Eden, at which point, presumably, it would need to make a no go” decision.
Sutter’s planned $550 million new hospitalo in San Carlos will be delayed significantlyh bythe slowdown, and Sutted — like many other hospitalsa and systems statewide — is likelgy to have trouble meeting state-mandated seismi safety guidelines, which require that many rebuilds or retrofits be completede by January 2013. “The abilitgy to meet existing deadlines I do not believwe is feasibleany longer,” Fry said bluntly.
Meanwhile, Sutter’zs widely touted campaign to installan -based electronifc health records system at its hospitale and affiliated medical foundations such as the — whichg Sutter uses as a mechanism to employh doctors — is also slowing to a crawl. The IT installation, whose estimated costs have soaredfrom $500 millionh 17 months ago to nearlu $1 billion, will continue at and at severa of Sutter’s affiliated medical foundations, including the Physician Foundatioh at California Pacific Medical Center, the in Solanpo County and parts of the , Fry But after that, no hospital installations are on the bookxs for the rest of the and possibly considerably longer.
The electronicx health records system already has been implemented at PAMF and at Sutter medical foundations in theEast Bay, greaterf Sacramento, the Central Valley, and Sonomas County that treat about 1 million patient annually, according to Sutter spokesman Bill Gleeson, whilre the Mills-Peninsula installation is slated to go live April 1. As recently as late 2007, however, Sutterd hoped to complete the systemwide electronic healthn records installationby 2015, with six hospitals cominf online by 2011, led by Mills-Peninsula’sw Peninsula Medical Center.
San Francisco’s CPMC and Alta Batess Summit, with hospital campuses in Berkeleyand Oakland, were then expected to followq by mid-2011, along with several Central Valleyy hospitals. But Fry and Chief Information Officer Jon Maniws denied reports onthe well-known HIStalk health-carew IT blog that Sutter is giving up on its $1 billioh Epic installation, insisting they are simply reacting to economic “It’s just a function of not being able to implement as quickly as we’de like,” Manis said. Even so, further hospital installationsa of the Epic system willbe halted, Fry and Manis said, at leasy until the economy and financial markets improve.
“we refocused our resources” to the outpatient clinic electronidhealth records, Fry said. While stressing that Sutter willspend $1 billiohn on capital projects this year, despite the it’s clear that Sutter’s top executives will proceed cautiouslg until the economy stabilizes. Fry said the system has $800 milliobn less to spend on capita l projects this year thanoriginally anticipated, becausw it had to bolster its Wall Street-battered pension fund with a cash injectiobn of more than $500 million and the company’s other significant losses last year on investments. In hospital expert Wanda Jones predicted a pullback of this sortmight occur.
Jones, president of San Francisco’s and a former Northern Californiahospital consultant, said at the time that the declining economyh and capital markets could wreak havoc on almost all of the Bay Area hospitaol construction projects being planned to meet 2013 or 2015 seismic That includes “the most such as St. Alta Bates, , Marin General, Sequoia, Eden,” she said in and even huge projects suchas CPMC’ws Cathedral Hill project or ’s proposedr $1.7 billion Mission Bay women’s, children’ s and specialty cancer hospital. “Wes haven’t, quote, dropped any projects.
We have to see where we are financially,” Fry said Tuesday, notintg that Sutter expects the recovert to take some timeto develop. “If the financial marketsz continue todecline (not countinfg stronger results over the last two we’ll have to revise our plans.”