Aging residents and health care job growth drive medical construction boom in Sonoma County

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Across the street from Santa Rosa Memorial Hospital, nondescript physician offices and a few small shops along half a city block have been razed to make way for an $80 million medical building and parking garage.

The planned four-story medical office structure and 600-space garage along Montgomery Drive one day will help St. Joseph Health, which operates Memorial, to provide more offices for doctors and outpatient services like surgical treatments and the latest diagnostic imaging.

“You’ve got to expand beyond the hospital walls to do that,” said Todd Salnas, president of St. Joseph Health in Sonoma County.

The medical office building slated to open in early 2020 represents Sonoma County’s latest example of new construction so more health care workers can serve additional patients. Those developments include the spring opening of a $50 million Kaiser Permanente medical office building in southwest Santa Rosa and the 2014 opening of a $292 million Sutter Health hospital and medical office complex in north Santa Rosa.

The medical building spurt comes as health care enterprises have become the county’s largest employer, with nearly 35,000 workers, or about 15 percent of the local workforce. Health care employment has outpaced the rest of the county economy in recent years, and the sector is expected to remain the fastest- growing here over the next four years, according to recent studies by the Sonoma County Economic Development Board.

It wasn’t always this way. Ben Stone, the economic development board’s executive director, said for most of the last three decades the retail sector held the title as the county’s biggest employer.

He suggested two reasons for the rise of health care. First, the Affordable Care Act, commonly known as Obamacare, has resulted in the enrollment of more people in health care insurance plans in the county since 2010, increasing the need for more medical providers to serve them.

Second, Stone said, is “the aging of the population.”

The number of county residents 65 and older increased by 10 percent from 2014 to 2016, a bigger jump than in California or the country. Those older residents will increase demand “for home health care services, nursing and residential care and traditional outpatient facilities,” according to a June report for Sonoma County by Moody’s Analytics.

Santa Rosa is home to the three largest of the county’s seven hospitals.

In 1997, Sutter Health took over operations of the city’s oldest institution, the former county-run Community Hospital, which goes back to the 1860s. The Community Hospital complex, built mostly between the 1930s and 1970s, closed on Chanate Road in 2014. That year, Sutter opened its 116-bed hospital and an 80,000-square-foot medical office building on Mark West Springs Road.

The second hospital to open, Santa Rosa Memorial, began operating on New Year’s Day in 1950. Since then, the hospital has added two four-story wings, a new emergency room and in 2008 a $57 million cardiac and vascular treatment center.

St. Joseph Health operates five hospitals on the North Coast, including Memorial and Petaluma Valley Hospital, the latter a publicly owned facility.

Santa Rosa’s third hospital operator, Kaiser Permanente, built its first medical office building in the city on Bicentennial Way in 1981. In 1990, Kaiser opened an adjacent four-story hospital covering 160,000 square feet of space. In 2010, it completed a five-story hospital tower next door with an additional 146,000 square feet.

Even as new medical centers have opened, “area hospitals have clearly made significant strides in improving care quality over the years,” according to the Moody’s report.

The report noted this year Sonoma County placed seventh in the state in an annual report of health care quality rankings by the Robert Wood Johnson Foundation. “This is down from its fifth-place finish in 2017, but a marked increase from its 12th place rank in 2011,” according to the report.

It also said recent job gains in county health care “have been largely concentrated in outpatient care facilities as demand for specialized treatments rises.”

Health care remains a top-performing industry nationwide, accounting for about 10 percent of the national workforce, according to Moody’s.

In September, 35,000 workers in the county were employed in health care and social assistance occupations, according to state figures. The sector’s jobs increased 42 percent since 2008, a period in the midst of the recession. The number of health care jobs never declined once during the next 10 Septembers, which Stone said was a rarity for local businesses when the unemployment rate here had climbed to 10.4 percent by September 2010.

By contrast, the county’s September jobless rate stood at a low 2.4 percent, meaning most people who want to work have jobs.

Meanwhile, Kaiser’s opening of its Mercury Way office building in May is the latest of its major expansions, which include medical offices on Old Redwood Highway in Santa Rosa and in Rohnert Park.

About a third of Kaiser’s 171,000 county patients live in the southwest Santa Rosa area. The new Mercury Way building provides them easier access to care, said Dr. Catherine Gutfreund, the physician in charge of the 88,000-square-foot facility.

The three-story building received the top Leadership in Energy and Environmental Design certification of platinum, making it among the greenest — or most energy efficient — structures in the region. For example, the building’s windows darken or lighten depending on the amount of sunlight shining on them.

Since May, 70,000 patients have visited the heath care building, Gutfreund said. The staff has conducted 10,000 mammograms and taken blood and other samples for laboratory work from 8,000 patients.

The new office building has allowed for greater collaboration among the staff working there, Gutfreund said. For example, some family practice doctors are treating more pregnant mothers or children, with obstetricians, gynecologists and pediactrics doctors in house for consultations as needed.

Also, technology allows specialists at Kaiser’s main Santa Rosa campus to video chat with patients and doctors at Mercury Way. That includes patients who come in for regular blood pressure checkups and can, if needed, talk via Skype with a pharmacist on the main campus about adjusting related medications, Gutfreund said.

“The patient gets the care right then and there” rather than traveling to a different location to see a medical expert, she said.

At Sutter, three new care facilities have opened in the last two years. One is a walk-in health center on North McDowell Boulevard in Petaluma, which serves those on most major medical plans and people without insurance coverage, Sutter spokeswoman Lisa Amador said.

At St. Joseph, the new medical office building will become a capstone of such health care buildings in the area surrounding Memorial hospital.

The health care provider already operates three buildings along Sotoyome Street. That includes a former rehabilitation facility where St. Joseph just spent $10 million on renovations to house 15 single-bed rooms for hospital patients.

St. Joseph now operates from more than 60 locations in the county, including major office buildings near Memorial at 1111 Sonoma Ave. and 500 Doyle Park Drive, Memorial spokeswoman Vanessa deGier said.

The planned 90,000-square-foot medical office building will include an urgent care center, doctors’ offices and $12 million worth of equipment for diagnostic imaging.

The six-level, vine-covered garage next door is planned to serve both the medical offices and Memorial, where a new west hospital wing is planned for construction by 2030, said Salnas, St. Joseph’s president.

In 2008, St. Joseph began its own medical group, which now has more than 200 medical providers, Salnas said. The new office building will provide space for some of those doctors, making it easier for them to visit patients across the street at the hospital.

Memorial serves as a regional medical center, both for St. Joseph’s hospital system and the wider community, Salnas said. Among other services, the hospital is the also regional trauma center for Sonoma, Napa, Lake and Mendocino counties.

Moreover, when St. Joseph conducts national searches for specialists and other staff, the modern medical office buildings help attract top-notch talent.

“It’s very important for us to have a state-of-the-art facility to recruit people,” Salnas said.

You can reach Staff Writer Robert Digitale at 707-521-5285 or On Twitter @rdigit.

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