Providence investing $712M into Orange County hospital expansion, new multispecialty medical centers

Providence shared plans Monday to invest $712 million in a bed expansion and new centers in California’s Orange County, a market where the large Catholic system previously had a stronger presence via a now-defunct affiliation with Hoag Memorial Hospital Presbyterian.

The funds will support a new, roughly 100-bed patient care tower for the system’s 504-bed Providence Mission Hospital in Mission Viejo, California, according to the announcement.

The tower includes new operating suites and cardiac catheterization labs and, according to Providence, allows the hospital “to greatly enhance” its neuroscience center of excellence, cardiovascular programs and maternity services. 

Additionally, the Providence Mission Hospital expansion will add a new on-campus multispecialty ambulatory surgery center the system expects will streamline the hospital’s surgical care and lure in new physician partners.

“Caring for our neighbors is our primary mission, and having just celebrated our hospital’s 50th anniversary, we’re excited at the opportunity to grow with our growing community, and to continue providing care for the next 50,” Providence Mission Hospital Chief Executive Seth Teigen said in the announcement.

Beyond Providence Mission Hospital, the funds will also back two new multispecialty medical centers in San Clemente and Rancho Mission Viejo, according to Providence’s announcement.

Both centers plan to host high-acuity urgent care services, a full-service imaging center and a multispecialty clinic with primary care, OB-GYN care and other specialties, the system said.

Word of Providence’s expansions come almost eight months after the conclusion of a nearly decadelong affiliation with Hoag Memorial Hospital Presbyterian, an Orange County-based system with two acute care hospitals, a specialty orthopedic hospital, nine health centers and 14 urgent care centers.

Hoag had filed a lawsuit in 2020 seeking disaffiliation, saying it was a “captive affiliate” of Providence and had limited ability to meet local health needs under the larger system.

Hoag had represented 7% of Providence’s total operating revenues in 2021 and 17% of its unrestricted cash and investments, according to financial documents disclosing the disaffiliation’s impact on Providence’s operations.

The Renton, Washington-based nonprofit system has lately found itself in a financial pinch. In fiscal year 2021, the 52-hospital organization doubled its net operating loss to $714 million.

More recently, Providence reported a midyear operating loss of $934 million and announced a “leaner” operating model with fewer executives and larger regional divisions it said would help create a “more sustainable model of healthcare” for the coming years.