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Ailing Tustin Hospital in Joint Venture


TUSTIN — The corporate parent of loss-ridden Tustin Rehabilitation Hospital is teaming up with a local company in hopes of improving the hospital's chance of survival.

The parent, Horizon/CMS Healthcare Corp. of Albuquerque, N.M., said Monday it has formed a joint venture with United Western Medical Centers of Santa Ana to operate the 117-bed hospital.

United Western owns and runs hospitals in Santa Ana and Anaheim, and a skilled nursing facility in Santa Ana.

Page Van Hoy, former administrator of the Santa Ana nursing facility, was named administrator Monday of the Tustin hospital. Van Hoy, 30, takes over for William Pegler, a division president for Horizon who served as the hospital's acting administrator for the last 14 months.

The hospital provides care for patients suffering from major strokes, brain injuries and trauma, and those requiring pulmonary and orthopedic rehab. It also offers skilled nursing services.


The hospital has been facing increased competition in recent years from general hospitals, Pegler said. Cost-cutting pressures from the managed care industry have driven hospitals to expand into the specialized market for lower-cost rehab or skilled-nursing services.

The joint venture provides for United Western and Tustin to consolidate their competing acute rehab programs in Tustin, Pegler said. United Western will close its 24-bed rehab unit at its 190-bed Western Medical Center in Anaheim, then convert the vacated beds to general hospital use, he said.

He wouldn't specify how many employees might lose their jobs but suggested that the number would be minimal.

The hospital expects to report a loss of about $1.2 million on revenue of about $25.1 million for its fiscal year ending May 31. The hospital lost $1.8 million last year and $3.2 million the year before.

Currently, about 70% of Tustin's 60 rehab beds and 35% of its 57 skilled-nursing beds are occupied, officials said.

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