Inpatient mental health beds could open at Palomar's Poway hospital under a $200 million partnership with UC San Diego Health.

UC San Diego Health CEO Patricia Maysent outlined the plan at a town hall Monday, Oct. 12, at Palomar's Escondido campus, the San Diego Union-Tribune first reported. It was the first of three public meetings on the joint venture.

A second town hall is set for Wednesday, Oct. 14, at 4 p.m. in conference room E on the third floor of Palomar UCSD Medical Center Poway, 15611 Pomerado Road. A third is scheduled for Nov. 2 at the Valley Center Community Hall, 28246 Lilac Road, at 4 p.m.

How the deal works

The two public entities finalized a joint powers authority (JPA) this summer. Palomar's hospitals in Escondido and Poway and its affiliated medical groups now operate under a new board of directors and the name Palomar UC San Diego Health.

UCSD has not absorbed Palomar. Instead, UCSD already loaned Palomar $40 million and will contribute an additional $160 million for improvements, according to the Union-Tribune's July reporting on the agreement. Palomar contributed its Poway campus and 15% of its Escondido assets to the JPA.

Mental health beds eyed for Poway

The behavioral health plan carries the most direct weight for Poway residents. Maysent said the vision includes inpatient beds for mental health patients and those with eating disorders at Palomar UCSD Medical Center Poway, along with beds at UCSD's East Campus Medical Center in San Diego.

That replaces a previously proposed 120-bed standalone mental health hospital on Palomar's Escondido campus. Palomar had won a $50 million state grant toward that $104 million facility, but the project did not survive the UCSD collaboration, the Union-Tribune reported in May. UCSD instead proposed about a dozen mental health beds at the Poway hospital and 20 at East Campus, plus a partial hospitalization program with 40 treatment slots in Escondido.

The state has not signed off. Palomar and UCSD submitted a revised proposal to the California Department of Health Care Services (DHCS) in May, and the agency has said more information may be available Nov. 2.

"That has not been approved by the state yet," Maysent said at Monday's meeting. "We're holding our breath; we're waiting every single day for that to get approved."

Finances improving but covenants unmet

A financial report from the Palomar Health District board shows patient volume rose in July. Total discharges hit 2,449, about 3.8% above budget and 5.4% above the prior year. But financial covenants specifying minimum days of cash on hand and debt service ratios have not yet been met, the Union-Tribune reported. Palomar entered forbearance agreements with its lenders in early 2025.

Diane Hansen, Palomar's CEO and now head of the JPA, told the town hall audience that plans to open additional floors in Escondido should ease emergency department crowding. New UCSD specialists in cancer care and cardiac surgery have also begun practicing at Palomar facilities, officials said.

The next public chance for Poway-area residents to ask questions is Wednesday's 4 p.m. town hall at 15611 Pomerado Road.