New Tijuana hospital to have binational focus

April 18--Scripps Health and a binational company will announce today that they're partnering to establish a hospital aimed at serving the growing number of Southern Californians who prefer to get medical care south of the border.

The facility, slated for a parcel just south of the San Ysidro Port of Entry, will strive to obtain international accreditation from the Joint Commission -- a standard currently met by only four other facilities in Mexico and none in Tijuana.

The pursuit of that accreditation is a key reason Sistemas Medicos Nacionales S.A., also known as SIMNSA, has tapped the La Jolla-based Scripps Health network to help it develop its first hospital. To date, the company has only operated clinics.

SIMNSA, which is both a health insurance company and a medical provider, plans to spend $120 million to turn its existing eight-story clinic in Tijuana into a full-service hospital with 200 inpatient beds, an emergency department and an intensive care unit. When completed in 2018, the hospital intends to offer cardiology, neurosurgery, oncology and labor and delivery procedures in addition to the array of outpatient services it already provides.

The large investment represents an attempt to deliver more cohesive care for SIMNSA's 100,000 beneficiaries, who often have to travel to multiple hospitals throughout Tijuana to get the services they need, said Frank Carrillo, the company's president.

"Most hospitals (in Tijuana), for example, don't have an MRI machine. I don't think you can find one facility that has everything in one place. You have to transfer the patient from one place to another to have a complete treatment," Carrillo said. "I think this partnership with Scripps is going to make the big difference for us. We're going to be one of the largest and most modern hospitals in all of Mexico when we're finished."

Chris Van Gorder, chief executive of Scripps Health, said he was impressed with what he saw when he recently visited SIMNSA's clinic in Tijuana. (The company also has facilities in Chula Vista and Mexicali.)

Van Gorder said the Tijuana operation is modern and efficient, including a dental clinic that uses lasers to sculpt crowns while patients wait on-site.

"We will learn from them, and they will learn from us. I fully anticipate this relationship will grow," he said. "We need to learn more about binational health care."

The hospital project is a tangible sign of growth for the "transitory medicine" market that spans the U.S.-Mexico border.

Employment brings many thousands of Mexican citizens with U.S. green cards north every day, and they often leave their families behind in Tijuana and other border cities. At the same time, thousands of Mexican nationals, largely Americans whose parents or spouses are Mexican citizens, have flocked south to receive often-cheaper health care in Mexico.

Carrillo said about 90 percent of the patients whom SIMNSA serves in Mexico have traveled south from California for that treatment.

As the first Mexican HMO authorized to sell insurance policies to businesses in California, SIMNSA has been catering to these employers' staffs since 2000. Its enrollment has risen steadily: In 2007, it had about 19,000 direct enrollees. Today, the figure is nearly 50,000, thanks to its dealings with more than 500 employers. (The company is not allowed to offer policies directly to individuals.)

SIMNSA alliances with big insurers -- Anthem Blue Cross, Aetna and Health Net -- have added roughly another 50,000 enrollees.

The collaboration between SIMNSA and Scripps Health makes sense, said Arturo Vargas Bustamante, an associate professor in the Department of Health Policy at UCLA who has written extensively about cross-border health care.

He said even though many Mexican-Americans buy policies from Covered California, the state's health insurance exchange, those plans' high deductibles often make it cheaper to obtain treatment in Mexico. And some consumers are turned off by the increasingly impersonal nature of U.S. health care, which often gives patients little time with their physicians, Bustamante said.

"Many, they prefer to go down to where they know they will, essentially, get to have a half-hour or more to talk to a doctor," he said.

Bustamante also said the SIMNSA-Scripps hospital venture is an early indication of the burgeoning trend of health care investment in Baja California. Many people who have used their green cards to work in the U.S. for years plan to retire south of the border, he noted. In addition, he said, an existing pattern of Americans retiring in Mexico because they can get more for their money there is expected to accelerate as wave after wave of baby boomers reach retirement age.

"It's definitely going to be interesting to see how things unfold," Bustamante said.

In terms of infrastructure and medical-equipment standards, Van Gorder said SIMNSA planners and architects have been visiting Scripps' recently opened specialty heart hospital in La Jolla to learn more about what requirements need to be fulfilled for Joint Commission accreditation.

"We are very lucky and we are very honored that Scripps was willing to lend us a hand and advise us. We've never done a hospital before, and that's why we're excited to have access to their experience and their knowledge," Carrillo said.

Once the hospital project is finished, the Scripps Health name will appear on the revamped building's facade subordinate to the SIMNSA logo. While Scripps doctors may visit the facility, they plan to, at least at first, only provide advice on subjects such as staff training, hospital operating protocols, infection control and physician credentialing. It will still be SIMNSA's doctors and nurses seeing patients.

SIMNSA will pay Scripps a consulting fee for its efforts. Both parties declined to disclose the amount but said it is small.

Van Gorder said while Scripps facilities north of the border will get some referrals for more complex cases as a result of the collaboration, he expects little effect on his network's bottom line.

He also said Scripps stands to make gains by observing how SIMNSA operates as provider and insurance company, a dual role that can deliver financial savings for companies that can get all levels of care, from the doctor's office to the surgical suite, to work together without sacrificing quality.

"There are things in terms of efficiency that we can learn from them. This is a very ripe learning opportunity for both organizations," Van Gorder said.

Carrillo said the future hospital is only one piece of SIMNSA's long-range strategy. His company plans to seek permission from the U.S. government to become an authorized provider for enrollees in two major American health programs -- Medicare and TRICARE.

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