Sutter Health Announces Multi-Billion Dollar Investment Increase in Northern California Health Care Services
SACRAMENTO, Calif., March 14, 2006 – The not-for-profit Sutter Health network plans to invest approximately $6.6 billion – $1.7 billion more than it originally envisioned – to improve, replace or build dozens of Northern California community-based outpatient care centers and hospitals over the next 10 years. In 2002, the hospitals and physician organizations that comprise Sutter Health said they would spend about $4.9 billion (including an inflation factor) on capital improvements through 2017.
In the five years since leaders from around the Sutter Health network worked together to create the system's comprehensive approach to facility master planning, the health care environment has seen sweeping changes. New competitors and innovations have emerged, hospital construction costs have soared, outpatient trends have outpaced projections and Sutter embarked on a new strategic plan. These changes prompted the health care system to revisit its capital spending strategy last year.
Going forward, a greater percentage of Sutter's total investment is planned to be in outpatient facilities, including physician clinics and surgery centers. The health care system plans to invest about $2.1 billion in outpatient facilities – up by approximately $700 million from its original plans.
Sutter Health is planning significant investments in a number of Northern California communities over the next decade. For example, Sutter plans to build or expand outpatient centers and/or physician offices in such places as Fairfield, Mountain View, Fremont, Tracy, Auburn, Jackson, the Greater Sacramento area and the San Joaquin Valley region. Significant hospital investments are in various stages of planning for communities including Santa Rosa, San Francisco, Oakland/Berkeley, Burlingame, San Carlos, Sacramento and Elk Grove. Many other communities also will benefit, but certain local Sutter-affiliated organizations have yet to complete their capital investment strategies. Some community projects are too early in the conceptual or planning stages to provide details. All projects are subject to Sutter Health's formal approval process.
"We have a new strategic plan that envisions a health care landscape that looks much different than what we're used to," said Sutter Health President and CEO Pat Fry. "Innovation, technology, and patient convenience and service will continue to reshape health care, and Sutter Health intends to lead the way. We have reevaluated and refined our capital plans to make sure we're balancing the needs of our communities, the realities of a changing health care environment, and the goal of remaining healthy, viable and successful over the long term," Fry said.
Fry added that Sutter Health will continue to monitor industry and construction inflation trends and modify plans as necessary. "If construction-cost inflation continues at its current pace, our projects will require further evaluation," he said, adding that keeping projects on track will also require Sutter Health and its affiliates to achieve and sustain their financial targets.
Since 2002, Sutter has spent approximately $1 billion on new capital projects, including a state-of-the art cancer center in Vallejo and breast center in Santa Rosa; comprehensive outpatient medical campuses in Fairfield, Terra Linda and Tracy; expanded emergency services in Lakeport, Antioch, Marin County, Oakland, Berkeley, Roseville and Castro Valley; cardiac centers in San Francisco and Sacramento; a neuroscience center in Castro Valley; expanded women's and children's facilities in Auburn, Modesto, Antioch, Castro Valley, Santa Rosa and Lakeport; new construction with expanded bed capacity at its hospitals in Modesto and Roseville; and new physician offices and outpatient centers in Davis, Elk Grove, Modesto, Fremont, Tracy, Stockton, Santa Cruz, Yuba City, Vallejo, Natomas and Folsom.