San Diego Magazine / October 2003 / Sharp at 50

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Sharp at 50

In 1944, Donald N. Sharp, a 22-year-old Air Force lieutenant from San Diego, was killed in action during World War II. He was an only son, and his family was devastated. In 1950, Thomas E. Sharp donated $500,000 in his son’s memory to establish a hospital in San Diego for the benefit of the public. The family of Philip Gildred had already donated 12.5 acres of land in Kearny Mesa, and by 1953 ground had been broken for the Donald N. Sharp Memorial Community Hospital.

In a radio interview at the time, Thomas Sharp said, “I have no doubt that if my boy were here, he would be thoroughly in accord with the idea.”

Fifty years after that groundbreaking, almost everything has changed. Managed care dominates the healthcare landscape, and the Internet has helped create a more demanding and informed patient population. There are shortages of nurses, pharmacists and laboratory technicians, and the industry faces enormous economic challenges—two out of every three hospitals in California are not profitable. Sharp HealthCare alone spends more than $90 million a year to care for patients who are uninsured.

Yet San Diego is arguably one of the best places right now for a healthcare organization. A study released in August by the Milken Institute, an independent economic think tank in Santa Monica, ranked San Diego 17th on its list of the nation’s top cities for healthcare. San Diego and Los Angeles were the only West Coast cities in the top 20, and San Diego’s ranking was based on its position as a leading center for biotechnology research.

That’s the backdrop against which Sharp Memorial Community Hospital has evolved into Sharp HealthCare, encompassing four acute-care hospitals, three specialty hospitals, three affiliated medical groups, the Sharp Memorial Outpatient Pavilion and the Elliot & Helen Cushman Wellness Center.

Sharp Memorial sees more patients than any other healthcare provider in San Diego, and by 2007, a new, state-of-the-art facility will take its place. Dan Gross, CEO of the Metropolitan Medical Campus—which includes Sharp Memorial, Sharp Mary Birch, Sharp Mesa Vista, Sharp Vista Pacifica and Sharp Cabrillo hospitals—says construction on the new hospital is expected to begin next spring.

Change at Sharp began in 2001, when the organization launched The Sharp Experience, with the goal of giving the “best possible experience to employees, patients and physicians at Sharp,” says Diane Gage, who heads up The Sharp Experience. All 12,000 Sharp employee associates were invited to the San Diego Convention Center that year for a rally designed to reinvigorate employees and help them reconnect their careers.

The Sharp Experience has become part of the culture, says Gage. “Two years out, and this has benefited Sharp all the way around. Employee satisfaction surveys jumped 9 percent the first year, physicians are more satisfied, and turnover is down.”

Then came new facilities. Both the Outpatient Pavilion and the Wellness Center opened several months ago. These, in conjunction with the new hospital, are part of Sharp’s plan to transform itself into the most technologically advanced healthcare system in San Diego.

The Outpatient Pavilion is a start. Gross describes it as unique because of the comprehensive nature of its programs. Rather than a focus on any one specialty, the pavilion offers outpatient surgery, an eye center, a cancer center, advanced diagnostic imaging, a gastroenterology specialty and a distinct women’s imaging program, with mammography, stereotactic biopsy, ultrasound and educational services.

According to Sharp HealthCare president and CEO Mike Murphy, the revamped Sharp Memorial will be the most technologically advanced hospital in San Diego—and likely one of the most advanced in the country. Although it is Sharp’s 50th anniversary, the timing of this transformation is more about adapting to enormous changes in healthcare delivery than it is about celebrating milestones, he says.

“If you look at how healthcare is being delivered and how it will be delivered in the future, and compare it to hospitals designed 50 years ago, the equation does not balance,” Murphy says. “It’s necessary for us to adapt to the current healthcare environment.” Put simply, 50-year-old hospitals can’t accommodate 21st-century technology.

Sharp’s decision to retool and remake itself may be a first in San Diego, but it’s part of a nationwide trend at hospitals and healthcare organizations, says Steven Findlay, director of research at the National Institute for Healthcare Management, a private, nonprofit healthcare think tank in Washington, D.C.

“In the last couple of years, we have been in a period of fairly intensive capital spending by many healthcare providers and hospitals across the country,” says Findlay, “and it’s likely we will continue to be for the next five or six years.” He cites three major reasons: an aging population that includes baby boomers nearing the time when they will have more healthcare concerns; a new generation of clinical tools, machines and technology; and the challenge of bioterrorism and potential public health crises brought to light by September 11, 2001.

Despite the fact that Sharp is part of a trend, rather than an isolated example, Findlay says the organization has a reputation in the industry as being “very progressive.” Steven Escoboza, president and CEO of the Healthcare Association of San Diego & Imperial Counties (and a board member of Sharp HealthCare) calls the organization nothing short of “visionary.” He adds that Sharp—and other hospital systems within San Diego and nationwide—doesn’t have many alternatives to this sort of evolution. “We’re moving into a new era,” Escoboza says.

Reinvention and retooling are costly endeavors. To accomplish its goals, Sharp needs substantially more than the half-million dollars Thomas Sharp donated 50 years ago. In fact, 50 years ago it cost $5 million to make Sharp Memorial Hospital a reality; the new Outpatient Pavilion alone cost $42 million, says Bill Littlejohn, CEO and senior vice president of Sharp HealthCare Foundation.

Littlejohn leads Sharp HealthCare’s capital campaign, which aims to raise $50 million. That’s a small portion of the more than $400 million required for Sharp to complete its transformation. “We have a much larger infrastructure now; we’re a huge organization,” he says. Today, Sharp is the largest healthcare organization in San Diego, the largest private employer here and controls the biggest share of the healthcare market. It is also one of the few profitable hospital systems in California, although it is a not-for-profit, so revenue is reinvested in the organization.

Funding for Sharp’s ambitious plan comes from three sources—reinvesting profits, borrowing and community donations. A capital campaign of this scale hasn’t been undertaken by the organization since 12 years ago, when Sharp Mary Birch Hospital for Women was opened. Littlejohn says the current campaign is “basically a renewal of a community partnership that goes back 50 years. Out of the generosity of people 50 years ago, we established Sharp Memorial Hospital. Fifty years later, we’re rebuilding our healthcare infrastructure and once again asking the community to partner with us.”

Fund-raising this time around is painstakingly grass roots, with Sharp representatives talking one-on-one with donors of every stripe. “Think about how important this is from our perspective,” says Littlejohn. “We’re spending a half-billion dollars to transform the biggest healthcare organization in San Diego. We touch 750,000 lives every year. The stakes are high; we aren’t just going to send out a bunch of letters, or have one big fund-raiser, or coupons. We’re going out to tell the story of our past and use the power of our relationship with the community to bring people in.”

At press time, Sharp had raised $18 million—and its fund-raising effort had just begun. Management at the organization is hopeful but realistic. President and CEO Murphy says the board would have liked an even bigger rebuilding plan but believed that anything larger would not have been fiscally responsible.

Yet he’s not disappointed. His oft-quoted phrase is “It’s a marathon, not a sprint,” and Murphy is adamant that despite the challenges it faces, Sharp will continually improve itself. “This will never end,” he says. “We will never be at a point when we can say we’re done."