PPH board asked to delay parts of district's expansion
By: ANDREA MOSS - Staff Writer | ∞
ESCONDIDO -- Palomar Pomerado Health's top employee surprised its board of directors Tuesday by asking them to consider building part of a new hospital in stages and delaying Palomar Medical Center's renovation by several years.
Palomar Pomerado President and Chief Executive Officer Michael Covert made his requests during a joint meeting of the board and the district's Strategic Planning Committee at the existing medical center. An agenda for the session had promised an update on a master facilities plan the board approved in July 2004.
The two hospital projects are part of that plan, which calls for Palomar Pomerado to expand its facilities. At the time the expansion was approved, the project was expected to cost $753 million; that figure was updated to $983 million in late 2005.
On Tuesday, Covert put the price tag at $1.15 billion.
The CEO said he asked the district's finance staff to come up with a list of things that could be cut from the project to trim its cost. Doing so identified ways to save only about $25 million, he said.
However, holding off on construction of three buildings associated with the new hospital, delaying Palomar's renovation from 2011 until 2015, and extending the timeline for completion of the second phase of an expansion at Pomerado Hospital would pare the overall cost to $988.4 million, he said.
The CEO suggested the district continue using the existing medical center, and even move in some of the medical services planned for the new hospital, during the postponement period.
The delay also would push the project out to a period when Palomar Pomerado will be paying off revenue bonds the district took out in the early 1990s. That would put the district in a position to borrow new bond money, said Covert.
Board Chairman Marcelo Rivera described the proposal as reasonable and realistic.
Covert's request seemed to stun other board members, though. They sat silent for awhile before asking for details and time to mull over the proposal.
"This is not a happy day for the board to hear what you're telling us," said Director Alan Larson. "I know you're not asking for a decision here. But we need more information."
Board member Ted Kleiter said he wanted to see comparisons of the costs and timelines in the original plan versus Covert's alternative.
"Before I can sit and ask any questions about it, I have to sort it out in my own mind," Kleiter said.
The state's largest public health-care district, Palomar Pomerado serves an 800-square-mile area. Besides Palomar Medical Center in Escondido, the district owns and operates Pomerado Hospital in Poway.
Construction of a new hospital in Escondido is a key element of the expansion plan.
The district also plans to double Pomerado Hospital's size, renovate Palomar Medical Center once the new hospital is finished, and build satellite medical centers in outlying parts of the district.
Voters approved a $496 million bond measure in November 2004 to help pay for the improvements. Since then, some parts of the expansion have gotten under way.
Those include the addition of a five-story outpatient services pavilion and a four-story parking garage at Pomerado and the renovation of its central plant. The work represents the first phase of that facility's expansion.
The district has also purchased land for satellite clinics in Ramona and Rancho Penasquitos and is well along in the design and permit process for the Rancho Penasquitos facility.
Architects are simultaneously working on designs for the new hospital, and the district has started submitting them to the state for approval. Set to go up on a mesa in the Escondido Research and Technology Center near the city's border with San Marcos, the new facility originally was expected to cost $531 million.
Covert put the project's revised cost at $811.5 million.
During Tuesday's meeting, the board reviewed updated designs for the new hospital and weighed in on some of its features. Architects learned, for instance, that the board generally liked a glass rotunda at the medical center's entrance, sloping lines on the hospital's roof and a cylindrical tower in the roof's center.
Architect Tom Chessum said such features would make the building distinctive, visually scale down its massive size, and point the way to its entrance. Covert said the mass aspect was important.
"Whether you like it or not, the building is a big building," the CEO said. "So then the challenge becomes what can you do to bring some of that mass down without adding too many curves to the walls, which adds cost.'"
The district had planned to start renovating Palomar Medical Center once the new hospital is finished. An agreement between Palomar Pomerado and the city of Escondido also calls for the district to relocate its headquarters and supply operations from Carmel Mountain Ranch to Escondido.
Covert told the board Palomar Pomerado would still do both those things even if it delays work on the existing hospital. The district would also stick to its schedule when it comes to design work for the renovation and could temporarily operate a women's center planned for the new hospital at the existing one, he said.
The center is one of the buildings he suggested Palomar Pomerado hold on off building at the new facility. The others are a support building and a central plant that would supply the hospital's power.
Covert said the plant could be built by a private developer and leased to the hospital.
-- Contact staff writer Andrea Moss at (760) 739-6654 or amoss@nctimes.com.
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Escondeeter wrote on May 23, 2007 12:16 AM:....and the hits just keep on coming.
What have I told you wrote on May 23, 2007 6:03 AM:these folks at PPH have lied to the taxpayers about this hospital expansion. It is time for a class action lawsuit.
Bond Payer wrote on May 23, 2007 7:15 AM:Fired Michael Covert Now! He promised us a hospital and now we get bit and piece and another bond coming soon I bet
Wake up! wrote on May 23, 2007 7:28 AM:Gee, looks like the PPH board is now finding out the high cost of blindly following a CEO whose goal was to build this new hospital at any cost. They shouldn't have been surprised by being blindsided by CEO Covert. But if they were, then we should remember their ineffectiveness and lack of leadership at election time.
Disappointed but not surprised wrote on May 23, 2007 7:40 AM:Am I missing something? Didn't PPH promise to start renovations at the current Palomar Medical Center BEFORE starting to build at ERTC? Wasn't this in the Memorandum of Understanding between PPH and the City of Escondido that allowed PPH to build at ERTC in exchange for timely renovations at the current site? We were sure led to believe that was the case. Escondido needs to check to be sure that PPH isn't violating their agreement. I haven't seen anything happening downtown so this announcement shouldn't be a big surprise to anyone. Meanwhile, its "full speed ahead" at ERTC. Unfortunately, PPH doesn't care about downtown and they don't care about keeping their agreements with the City. Expect more of this type of behavior from the CEO and this board in the future. Unfortunately, there's a lot more work to be done.
what a mess wrote on May 23, 2007 7:49 AM:Nice, now we start to value engineer the hospital. Wonderful. What next? This is a complete joke. I'll be dead before that hospital gets built, and I'm not old. Covert should be fired. How about that for a cost cutting measure. Check how much the guy makes and get back with me. PPH is laughable.
Not surprised ! wrote on May 23, 2007 8:38 AM: Name one project (public funded) that's been or will be completed within estimates? I cannot think of one. Sprinter, public service centers (police & fire), bridge over Hodges, Petco Park, freeway expansion, Cal. Center of the Arts - I could keep going. The problem is greed and incompetence.
WHAT ???? wrote on May 23, 2007 8:50 AM: You need to build a power plant next to the power plant??? What am I missing???
OBSERVER wrote on May 23, 2007 8:53 AM:What a suprise!!!! Not... They never intended to renovate Palomar Hospital. PPH Board just sold the TAXPAYERS a bill of goods!
The Cobra wrote on May 23, 2007 9:40 AM:Why doesn’t Palomar Pomerado Health just build the Hospital Downtown? And they’ll save $$$$ Millions $$$$$ Palomar Pomerado’s MOU and Board should be called mickey MOUse.
Tell the truth wrote on May 23, 2007 9:49 AM:Dear PPH and North County Times, The five-story outpatient services pavilion and a four-story parking garage at Pomerado was not paid for by Prop BB Money. They outsourced it with a private company at no cost to PPH. Where’s our $496 Million ????
PPH Employee wrote on May 23, 2007 10:02 AM:In this story / nightmare Mr. Covert said the plant could be built by a private developer and leased to the hospital. Now Mr. Covert are you outsourcing our jobs. So much for PPH being named best place to work as you telling everyone. I for one do not see it that way as do my fellow employees
TO COBRA wrote on May 23, 2007 10:11 AM:AMEN!!!!
To what a mess wrote on May 23, 2007 11:26 AM: You're up for a raise & bonus. You hold pep rallies and only release good news. You exaggerate a bit. You get your raise, bonus and extend your contract with a golden parachute, then you let the ball drop. Smart man - wouldn't you??
Hometowner wrote on May 23, 2007 12:08 PM: I aree with Cobra to build AS ORIGINALLY PLANNED (BC)before Covert in the current location. Some inconvenience during construction? Perhaps but it will save multi millions of dollars for the taxpayers. Oh, I'm sorry that was not a priority.
CEO Bonus wrote on May 23, 2007 12:12 PM:Is this the same Michael Covert who was recently given a raise and a bonus?? It can't be! What board would be foolish enough to do that!
Why we elected you wrote on May 23, 2007 12:27 PM:Sounds like the two Mikes, Covert and Rivera, are the only ones who understand the desparate situation which has been apparent for some time. The rest of the board better decide if they want to stay with this impossible plan or go back to the drawing board. Any objective evaluation would show that it is much more practical to salvage and improve the existing PMC than to keep pushing this pipe dream. Step up board! You will need to explain your decisions long after Mr. Covert has fled for greener pastures.
Why we elected you wrote on May 23, 2007 12:30 PM:Step up, PPH board! This plan is dead in the water. Time to reconsider a real plan which would include abandoning ERTC and fixing the existing hospitals. You will need to explain your decisions long after Mike Covert has fled to greener pastures.
Stunned? wrote on May 23, 2007 1:18 PM:How could the PPH board be stunned by this news? All the numbers were phony from the beginning including these new ones. Now that it is in the open, this board stop trusting the CEO and rewarding him with bonuses. Everything is not "fine." We need to all listen very carefully to the disastrous plan that he is describing and respond accordingly.
A-HA! wrote on May 23, 2007 1:44 PM:So, it took a few years, but if finally happened. The truth comes out! You've all been swindled! You'll be paying for this mess via your property taxes for the next 30 years while Covert sits back and counts his bonus checks. Why do you think there was a mass exodus of employees who worked on the BB campaign? Was that a coincidence? Wake up, North County! Did you ever get the distinct feeling you've been used?
Missed the cost wrote on May 23, 2007 2:33 PM:of the new hospital by $300 Million. This guy should be CEO of Exxon/Mobile. Where do some people get their credentials. Better yet where do we find these people on the board. Sounds like they can't manage or forecast their way out of a wet paper bag. Let's pay them on performance which would be $0 and apply that to the new hospital. ...
Harry wrote on May 23, 2007 2:37 PM:Is it time Mr. Covert for the "Oops Bond"?
Sort Of Old News wrote on May 23, 2007 2:44 PM:PPH already knew that the cost of the ERTC hospital was skyrocking!. Maybe the PPH Board members should get a clue. As reported on Feb. 7th in the NCTimes, 'An $800 million hospital that Palomar Pomerado plans to break ground on in Escondido in March is a central piece of the overall project.' http://www.nctimes.com/articles/2007/02/07/news/inland/4_03_162_6_07.txt That was a $110 million increase from the $691 million estimate of Dec. 20, 2005. http://www.nctimes.com/articles/2005/12/21/news/inland/21_37_0012_20_05.txt Recall the original estimate was $531 million
Saw it coming wrote on May 23, 2007 3:43 PM:This was predicted over a year ago. The numbers simply don't work. Time for some fresh ideas. http://www.nctimes.com/articles/2006/02/28/opinion/commentary/17_45_192_27_06.txt
Uh, thanks, Boss. wrote on May 23, 2007 4:29 PM:It's always nice when the CEO of PPH makes his board look bad. This time, he made them look REALLY bad. I hope Covert isn't looking for another bonus this year. I thought Covert worked for the board, not the other way around.
Jerome Sinsky, MD wrote on May 23, 2007 6:29 PM:Time for the board to give up the pipe dream of the hospital on the hill and build one or two first class towers with underground parking at the ample downtown site. Earthquake requirements have been relaxed by the state, and this was a major reason for the proposed move. I bought a lot in Escondido and had a home designed for us and abandoned the idea when I realized it was too expensive. We saved a ton of money by doing a small renovation to our existing home just off Juniper Street.Maybe PPHS could sell the ERTC property for a profit.
PPH Employee wrote on May 23, 2007 6:32 PM:Gee looks like Mr. Covert will not be getting another $160,000.00 Bonus anytime soon. maybe if the board would quit giving him these rediculus bonuses they would have the money for it. I say get rid of the board members. Vote them out!!!!!!!!!!!!!!!
Former PPH Employee wrote on May 23, 2007 6:35 PM:Now the truth will start coming out. How can PPH be the best place to work when morale levels are at an all time low in certain departments. ER nurses that work nights do not get breaks. The Psychiatric unit is totally mismanaged. ER is totally mismanaged. Time for new management all together. This is why I left PPH. And went to work for Kaiser
Fool on the Hill wrote on May 24, 2007 4:15 AM:Please say it ain't so! We were led to believe that PPH had a money tree. Anyone or any group who questioned PPH propaganda was labeled with vile names. We were led to believe that PPH and its supporters could do no wrong. Prop BB has been touted as a resounding success and used even as a positive example for other hospital districts. Any suggestions or criticisms would not stand. Who could fail to be mesmerized by an M. Covert speech? His public exhibitions could only be compared to those of 'the great dictator.' Some of us saw through it but were over-ruled. This too shall pass as the voting public has a short memory. Facility money is being spent as we speak on advertizing. "Son of BB' is in the works behind closes doors. When the money tree fails to bear fruit, the apathetic taxpayer will cover the loss. All I can say is 'I told you so!'
skkk on Dr. Jerome Sinsky wrote on Jun 4, 2007 8:23 PM:Jerome Sinsky, MD, it's time to check your facts, the State has NOT "relaxed" the seismic requirements. The deadline for upgrades has been postponed only. I agree the cost has skyrocketed out of everyone's control, but the sad truth of the construction climate (as proven by your new home construction) does not afford new towers to be conceived at the downtown site, pushing back the schedule and increasing construction escalation. The tower on the hill WILL be a better than first class, as the healthcare community has recognized. Perhaps not related to your microdermabrasion and hair-removal realm.
To skk.... wrote on Jul 6, 2007 1:13 PM:My my aren't we a little touchy on this subject??? The difference between you and Dr. Sinsky is that Dr. Sinsky knew when to give up when costs got too high. You, apparently, are part of the Covert Core that are fixed on ERTC at any cost. If you guys actually do all of what you say you'll do, I'll be happy to apologize. Since Covert's own board members sat there "stunned", my guess is that they still don't know what to do. Unfortnately, they were elected and they have a responsibility to the people... don't waste our money! First Covert told Escondido "Don't delay us. Every day we delay is costing us millions". Now its "Let's delay some of the building. That will save us millions!" Sorry, you can't have it both ways! The board is scrambling around without a plan! All you and the others do is run around saying "it's going to be first class, beautiful, the hospital of the future." You have no clue that you can't afford it. Oh sorry, I meant WE, the public, can't afford it! Covert will bail when this all goes downhill and his board and the community will be left to mop up his mess.
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