The City of Long Beach has agreed to a deal for at least $90 million to reopen Community Hospital Long Beach after its former operator pulled out because of the cost of pending seismic safety repairs.
The Long Beach City Council on March 12 approved an interim lease and tentative operating agreement between the city and the Molina, Wu, Network health care partnership that could reopen the city-owned hospital this year.
The MWN partnership is made up of Pacific6 Enterprises, a civic-minded investment firm founded by John and Mario Molina, former executives for Molina Healthcare Inc. of Long Beach; AHMC Healthcare Inc., which runs six hospitals in the San Gabriel Valley and Orange County; and Network Medical Management, a management service organization based in Alhambra.
“This has always been our community’s hospital,” said John Molina, founding partner at Pacific6, in a statement. “We are excited for this opportunity to partner with the city to return Community Hospital to the residents of Long Beach.”
The 158-bed hospital closed last summer after its operator, Fountain Valley-based MemorialCare Health System, said an active safety fault found running beneath the facility would make it too costly to conduct a seismic retrofit.
Initial estimates reached upwards of $100 million, according to a MemorialCare, which concluded any fix unfeasible.
After MemorialCare terminated its lease, Long Beach officials last June began exclusive negotiations with the Molina, Wu Network to operate a smaller 40-bed hospital for a minimum of 40 years for $1 a year.
The new public-private partnership would cover any costs associated with a seismic safety retrofit, in addition to restoring critical services and rehiring former staff who worked at the 95-year-old hospital.
Under the joint agreement, MWN would pay up to $25 million for initial retrofit costs needed to reopen the Mission Revival-style facility, with the city to commit an another $25 million for repairs.
The MWN group would also commit another $40 million to pay for deferred maintenance, equipment and operating capital, plus “any additional seismic retrofit costs.”
Upon reopening later this year pending state regulatory approvals, Community Hospital Long Beach would provide critical services that include a full-service emergency room, outpatient surgery, a behavioral health unit and radiology and gastrointestinal laboratories.
The group also aims to add outpatient behavioral health, substance abuse, recuperative care, diabetes and wound care services. The new consortium intends to rehire roughly 200 former hospital employees and hire another 400 employees as new services are offered in tandem with seismic safety compliance.
“We look forward to bringing AHMC’s decades of expertise in hospital and healthcare operations to Community Hospital Long Beach,” said Dr. Jonathan Wu, founder and chairman of the for-profit hospital chain based in Alhambra, in a statement.
Health business reporter Dana Bartholomew can be reached at [email protected]. Follow him on Twitter @_DanaBart.
