SHARP HEALTHCARE: Focus on Cost-efficiency Brings Rewards

      Three years after it posted a $20 million annual loss, San Diego- based Sharp HealthCare has become profitable again by pruning money-losing operations and expanding in other areas, the San Diego Daily Transcript reports. The paper notes that in 1996, the system was "so far into the red that it began talk of cutting back facilities and selling its nonprofit assets to for-profit Columbia HCA." But since President and CEO Mike Murphy took over that year, Sharp has turned around. It divested itself of money draining services, sold its Murrieta Hospital to Tenet HealthSystems and closed emergency and acute care services at Sharp Cabrillo Hospital. Today, even as "most hospitals in the state are losing money," Sharp is building new facilities and adding services. It bought Mesa Vista Hospital to expand its mental health services, is adding an intensive care unit and emergency room to Grossmont Hospital and expanding outpatient services at its hospital in Chula Vista. The system now encompasses seven hospitals, four skilled nursing centers, five urgent-care centers and three medical groups, and employs 10,000 people. Says Murphy, "We recognized that we needed to make modifications in the organization and move forward to adapt with what ... the community needed." The challenges aren't over, the Daily Transcript notes. Despite moving into the black, Sharp still faces high costs for uncompensated care, heavy HMO penetration and expensive state-mandated earthquake retrofitting (Gallagher, 10/27).