Adventist Health to Initiate Open Bidding Process for South Coast Medical Center

The Adventist Health Board of Directors recently announced its intent to find a new owner for South Coast Medical Center (SCMC) through an open bidding process.

Since acquiring SCMC in early 1998, Adventist Health has been transferring resources into the 208-bed medical center to cover its revenue shortfalls. During the last decade, Adventist Health has examined the long-term effects of such support on its entire operations. After repeated attempts to improve SCMC’s financial condition, corporate leadership concluded that the organization could no longer subsidize the financial losses.

The current health care environment challenges all providers—many of whom are experiencing financial losses or other difficulties in a competitive market. SCMC is no exception. It is representative of what many see in the current health care environment, a health care industry that needs a major overhaul.

“As a system, we have carried hospitals that experience challenging times,” stated Robert G. Carmen, president and chief executive officer for Adventist Health. “However, we cannot continue to sustain the magnitude of losses at SCMC indefinitely.”

“All of the choices we make as an organization—including the most difficult ones—flow from our commitment to meeting the health care needs of the communities we serve,” said Carmen, who personally has chaired the SCMC Board of Directors for the past 10 years. “Adventist Health has appreciated the relationship we have had over the past 10 years with the Coastal Communities in South Orange County.”

“As a responsible steward, Adventist Health must make priority decisions as to where to spend its resources most wisely and concentrate its efforts where its market position is stronger,” he said.

In the spirit of transparency, the system is proceeding with an open bidding process to identify another operator for the hospital. Adventist Health is cooperating fully with regulatory agencies, local authorities including the Laguna Beach City Council, as well as the State Attorney General during the sale process.

The bidding process and regulatory review will take many weeks and involve multiple parties. Therefore, a transfer of ownership is not expected until at least the first quarter of 2009.

“I am proud of the employees, volunteers and the medical staff at SCMC,” said Carmen “They have demonstrated hard work, dedication and commitment to patient care and I know they will continue to do so.”

SCMC is committed to its mission of serving patients during the sales process and will continue to provide high quality care and service.