Health care giants spend millions to expand facilities in Elk Grove area

08/12/2012 12:00 AM

08/12/2012 1:17 PM

Elk Grove, once the region's fastest-growing city, has seen housing construction slow dramatically in the past few years. Yet, at the same time, building in the tens of millions of dollars continues on hospitals and medical facilities.

Health care giants such as Kaiser, Sutter and Dignity Health are going where the people are in their quest to win customers.

During the recession, health care expanded when nearly every other industry stalled. It now employs more people than state government.

The federal Affordable Care Act encourages providers to keep more patients out of hospitals through outpatient and preventive services. Experts say this emphasis will likely continue fueling growth of the medical industry in suburban communities such as Elk Grove.

"The health care industry of the past was to have the big hospitals in the center of town and the medical offices on the outskirts," said Cindy Holst, chief strategy officer for Dignity Health's greater Sacramento-San Joaquin service area. "A health care delivery system of the future will have more of those inpatient and outpatient services pushed into the outskirts – into growth areas – in a much more streamlined way."

Dignity Health, formerly Catholic Healthcare West, will open a $35 million, three-story medical office building south of Elk Grove Boulevard in mid-September.

Behind it are plans to spend millions more over perhaps two decades on a hospital with phased expansions, a second medical office building and a parking garage.

Those will add to an expanding concentration of medical services already provided by competitors – Sutter Health, Kaiser Permanente and UC Davis Medical Group.

Their collective presence means good-paying jobs for local residents and needed health care for a significant number of state and local government workers who live in the area, said Elk Grove Mayor Jim Cooper.

"There are a lot of two-income families who live in Elk Grove, so there's definitely a demand there," Cooper said.

Plans for much of Elk Grove's medical backbone were set in place during the city's population boom in the 2000s. In just 10 years, the city added about 72,000 residents, a roughly 90 percent jump.

Amid that growth, Sacramento County officials called for a new trauma center to serve the south area. The project was awarded to Kaiser Permanente Medical Center, a few miles north of the Elk Grove city limits.

Kaiser Permanente in 2011 completed $300 million in expansions, including a two-story, 56,000-square-foot outpatient surgery building, emergency department expansion, three trauma rooms and a helicopter landing pad.

Some blocks to the north is Dignity Health's Methodist Hospital, Sacramento, which competed unsuccessfully for the trauma center but nevertheless expanded its emergency department at a cost of $38 million.

Dignity Health laid the groundwork for further growth during the boom years, purchasing 28 acres for its Elk Grove medical campus five years ago.

Now that the early stage of that project is reaching fruition, the urgency of building to meet a fast-growing population has dissipated. Buildout, provided the city grants entitlements on the various phases, will occur as more people move into the city, hospital officials say.

Next in Dignity Health's plan is a four-story surgery and maternity hospital, with subsequent hospital expansions of up to six stories.

Officials of Dignity Health and other medical providers say their efforts dovetail with the aims of the Affordable Care Act, which are to reduce health care costs. That means greater emphasis on preventive care and outpatient treatment and less reliance on more costly inpatient care.

"The trend in medical care is not just to provide more, but to do it more efficiently and effectively," said Anthony Wright, executive director of Health Access California, a consumer advocacy group. "Part of that is to move from hospital to primary preventative care, to more team-based approaches."

More community-based care is part of that formula.

The past few months have brought a series of health care openings in Elk Grove. In May, for instance, Sutter Health unveiled a 7,600-square-foot surgery center on its existing Elk Grove medical campus. The center, southeast of Laguna and Big Horn boulevards, cost $10.8 million.

The addition means that Sutter's Laguna campus can employ up to 275 physicians and staff members and offers diagnostic imaging, lab services, urgent care services, family medicine and more.

The timing of a planned community hospital, Sutter officials say, depends on the pace of city growth.

"We have a continuous process for reviewing and evaluating the growth in each area that Sutter is in," said Janet Wagner, chief executive at Sutter Davis Hospital. She helped guide the system's growth in Elk Grove. "We just finished the surgery center and we put in urgent care, so we're evaluating what the next step would be."

Last November, Kaiser Permanente opened a 67,000-square-foot medical office west of Highway 99 in southern Elk Grove, a site that will enable it to serve patients as far south as Lodi.

The new facility includes a 4,000-square-foot Sports Medicine Center, including a gym and fitness testing lab.

Elk Grove's emphasis on youth and adult sports should be a good match, said Patricia Rodriguez, a registered nurse and a senior vice president and area manager for the Kaiser Permanente Medical Center, south Sacramento service area.

"We said, 'What a perfect fit,' " Rodriguez recounted. "It gave us the opportunity to look at a different way of doing things."


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