San Diego and Imperial Counties — Regional Market Report 2026

AUTHOR: Caroline Davis, MPP, see all

Read the Full Report

Introduction

San Diego and Imperial Counties stretch along California’s southern border with Mexico, home to almost 3.5 million people. The two counties cover roughly equal land area, about 4,200 square miles each. Their similarities end there. San Diego’s nearly 3.3 million residents cluster along a 50-mile Pacific coastline, with rural desert stretching east toward Imperial County, where fewer than 200,000 people live. Because of Imperial’s remote location, residents often travel two or more hours to San Diego, Riverside County, or Arizona for specialty care.

Their health care markets diverge just as sharply. Imperial County’s two hospitals have stayed afloat with state loans for distressed facilities. Meanwhile, San Diego’s four large health systems, Sharp HealthCare, Scripps Health, UC San Diego Health, and Kaiser Permanente, have expanded inpatient and outpatient capacity, especially in the growing and more affluent northern part of the county.

This report marks the first time Imperial County has been included in the ongoing Regional Markets Study alongside San Diego.

San Diego/Imperial County Health Care Market: Key Takeaways

After years of stability, consolidation has returned to San Diego’s hospital sector. Large health systems continue expanding their regional footprints despite rising costs, while district and independent hospitals struggle financially. Several have been absorbed by larger systems, with academic and nonprofit systems taking on operations of distressed facilities. The physician sector remains relatively stable, though private practice keeps eroding as younger physicians opt for employment with larger organizations. National physician organizations have entered the market, though observers question their long-term investor appeal.

Five Key Developments Shaping Health Care in San Diego / Imperial Counties

1. Two counties, two very different health care markets. 

San Diego and Imperial Counties share a border and roughly equal land area, but little else. San Diego’s nearly 3.3 million residents are served by four large systems adding inpatient and outpatient capacity. Imperial’s fewer than 200,000 residents rely on two hospitals that have stayed open with state loans. Imperial residents can travel two or more hours to San Diego, Riverside County, or Arizona for specialty care, including labor and delivery.

2. Consolidation has returned to San Diego’s hospital sector after years of stability. 

Large systems are expanding while district and independent hospitals struggle. UCSD Health acquired Alvarado Hospital Medical Center and entered a joint powers agreement with Palomar Health that effectively doubles the system’s size. Sharp HealthCare will lease and operate Tri-City Medical Center after district voters approved the partnership in June 2026. Scripps Health is building a new hospital in San Marcos, part of a broader race for market share in the North County area, which has higher rates of commercial insurance.

3. Imperial County is consolidating into a single countywide health system. 

A 2023 state law created the Imperial Valley Healthcare District, dissolving the county’s two prior districts and setting up the acquisition of city-owned El Centro Regional Medical Center. UCSD Health will run day-to-day operations for the consolidated health system under a joint powers agreement. Local leaders hope the structure will resolve years of financial instability and fragmented care, though some worry about cost and consolidated control.

4. Private practice keeps eroding as national players enter the market. 

Younger physicians increasingly choose employment with larger organizations over opening their own practices. Optum acquired San Diego Physicians Medical Group in 2025, and Astrana Health entered through its purchase of Prospect Health. Market observers are split on whether San Diego’s already-consolidated physician sector will sustain outside investor interest, given how few independent practices remain.

5. Community health centers anchor a safety net with no public hospital behind it. 

Neither county operates a public hospital or government-run community health centers. Nineteen CHCs across more than 90 sites serve San Diego, drawing 86% of net patient revenue from Medi-Cal. Innercare is the sole FQHC in Imperial County. Rising labor costs and pending Medi-Cal reductions have pushed CHCs to diversify their payer mix through Medicare accountable care and commercial contracting.

6. Behavioral health investment is expanding infrastructure, but challenges persist.

San Diego County has opened four crisis stabilization units and grown from two mobile crisis teams to 44, cutting monthly emergency psychiatric admissions to the San Diego County Psychiatric Hospital by 38%. A new 16-bed psychiatric facility opened in Oceanside in late 2025. In Imperial, the county received over $22 million in BHCIP grant funds to expand an existing facility to provide outpatient substance use disorder treatment services; however, the project has faced community opposition.

Key Data on San Diego/Imperial Counties

Health Insurance Coverage

Where do San Diego/Imperial County residents get their health coverage?

Sources: “MA State/County Penetration (July 2023),” US Centers for Medicare & Medicaid Services “Selected Characteristics of Health Insurance Coverage in the United States, American Community Survey, 1-Year and 5 Year Estimates,” US Census Bureau “By Medicare Dual Status, Certified Eligibles,” California Department of Health Care Services Katherine Wilson, “California Health Insurers, Enrollment Almanac — 2025 Edition,” California Health Care Foundation

Population and Economic Context

How do San Diego/Imperial Counties compare to California overall?

Sources: “Annual Estimates of the Resident Population for Counties in the United States: April 1, 2020 to July 1, 2024 (CO-EST2024-POP),” US Census Bureau “Annual Estimates of the Resident Population for Counties in the United States: April 1, 2010 to July 1, 2019 (CO-EST2019-ANNRES-06),” US Census Bureau “American Community Survey 5-Year Estimates Subject Tables, S1901, Income in the Past 12 Months (in 2023 Inflation-Adjusted Dollars), 2023,” US Census Bureau “Current Industry Employment and Unemployment Rates for Counties,” California Employment Development Department “Housing Affordability Index – Traditional (Q2 2024),” California Association of Realtors “Healthcare Payments Data Measures Data (2018–2023),” California Department of Health Care Access and Information “Infant Mortality,” California Department of Public Health “California Overdose Surveillance Dashboard,” CDPH, last updated May 19, 2025 “American Community Survey, 2023 5-Year Estimates, S1810, Disability Characteristics,” US Census Bureau

Hospital Landscape

What are the largest hospital systems serving San Diego County?

Source: “2023 Pivot Table – Hospital Annual Selected File,” California Department of Health Care Access and Information

Community Health Centers

What are the largest community health center (CHC) systems in San Diego County?

Source: “2023 Primary Care Clinic Annual Utilization Data (November 2024),” California Department of Health Care Access and Information, last updated October 31, 2024

Health Care Workforce

How do San Diego and Imperial Counties compare to California?

Source: “2024 License Renewal Survey Data, Representing Active Licenses as of December 3, 2024,” custom data request, HCAI, received April 14, 2025.

Authors and Contributors