Sutter Health expanding in Solano

Sutter expanding in Solano
Sacramento Business Journal
May 30, 2005

EXCLUSIVE REPORTS

Sutter expanding in Solano
Will spend $42.5M to recruit docs, compete with Kaiser

Kathy Robertson
Staff Writer

Sutter Health will spend $42.5 million over the next two years to recruit more doctors and build more medical offices in Solano County.
The move is expected to increase Sutter's footprint in the rapidly developing area between the Bay Area and Sacramento, and put the Sacramento-based health system in a better position to compete head-to-head with Kaiser Permanente in the region.

For now, Sutter is a distant second place in the Solano market, but the healthcare stakes are rising in the county. Sutter has the only large medical group besides Kaiser in the area.
"Kaiser has recruited lots of physicians -- they are good at it," said John Ray, CEO of the Sutter Regional Medical Foundation. "But we are getting better. They set a standard here but are not everybody's cup of tea."

Sutter stepped up its involvement in Solano two years ago, when the largest multi-specialty doctors' group in the county sold its assets to the health system. Solano Regional Medical Group, which split from NorthBay Healthcare in Fairfield in 2001, was losing $250,000 to $400,000 a month and didn't see any relief coming.

Financial details of the deal were not disclosed, but 69 doctors and other providers who cared for some 60,000 patients joined the Sutter network. The numbers have grown since then to 80 doctors and other providers and 70,000 patients, Ray said. The medical foundation has about 350 employees.

"The last year and a half have been spent fixing operational issues," he explained. "Now we are ready to think of the next step in terms of the medical foundation."

Most Sutter patients in Solano go to Sutter Solano Medical Center in Vallejo for inpatient care, although those at the north end of the county are sometimes sent to Sutter Davis.

Kaiser has 205,000 members and 550 doctors in Solano County, said company spokesman Paul Vetter. That means Kaiser has already signed up almost half the county's population of 421,657 and has almost seven times more providers than Sutter. Last week, Kaiser broke ground on a $300 million, 166-bed medical center in Vacaville. It's expected to open in 2009.
Expand and replace

The Sutter board's recent approval of $42.5 million in new money for Solano County follows construction of a $40 million medical complex near the Anheuser-Busch Cos. Inc. plant in west Fairfield. The 80,000-square-foot complex opened last year. It includes a diagnostic imaging center, outpatient surgery center and two-story medical office building.

The new money would go toward:

Constructing an additional 50,000-square-foot medical office building and administrative space on the West Fairfield campus.

Securing another 13,000 square feet of clinic space to accommodate up to a dozen physicians and staff in the Fairfield-Vacaville area. No site has been announced.

Expanding an existing clinic in Rio Vista to accommodate a second physician. There is talk of developing a 10,000-to-12,000-square-foot clinic in the city in four or five years, Ray said.
Sutter Regional Medical Foundation is expanding in south Solano County as well.
A cancer clinic and adjoining medical office building under construction at Sutter Solano Medical Center in Vallejo are expected to open by year-end. The medical foundation will lease about 15,000 square feet of office space on the second floor to accommodate up to 12 doctors and their staff.

"For the first time, the physicians who have been loyally serving our community over the years, and new physicians who want to establish their practices in Vallejo, will have a modern new facility for treating their patients," said Terry Glubka, CEO of Sutter Solano Medical Center, in a prepared statement.

The idea behind the expansion is to improve access to services for Solano County residents who are not Kaiser patients, Ray said. Longtime doctors in the region are getting close to retirement. Younger ones seem reluctant to go solo.

"Without an organized multi-specialty practice to house, recruit and retain them, it's not clear whether physicians would come here to care for people. Availability will erode," Ray said. "This (expansion) is a very important part of our long-term strategy."

Kaiser plots a course

Kaiser expects to spend more than $650 million in Solano County over the next five years. That amount includes $300 million for the new hospital in Vacaville, which is expected to open in 2009. A replacement facility for Kaiser's Vallejo hospital would cost $350 million and be completed in 2008.

Another development still not approved by Kaiser board would add a 217,000-square-foot medical office building to Kaiser's medical campus in Vacaville.

"We do have quite a few members in Solano County," said Mariann White, chief operating officer for Kaiser's Napa-Solano region. "In order to provide primary and specialty care more conveniently to our members, we will be expanding in the Fairfield and Vacaville areas."
The new hospital in Vacaville alone, she said, is expected to bring more than 1,000 new jobs to the area.

© 2005 American City Business Journals Inc.