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1st appeared 23 July 1999
(updated July 23, 4:20 p.m.)
Board Postpones Decision on Fate of Mount Zion
 The UCSF Stanford Health Care Board of Directors decided
today (Friday) to postpone for three weeks its decision on the fate of Mount Zion Medical
Center. The decision was made after hearing extensive public discussion on three possible
options to reshape services and after two hours of discussion in closed session.
Board chair Isaac Stein said, "The board found the presentations by the public and
UCSF/Mount Zion leadership constructive and thoughtful. After discussing the many issues
raised, we agreed to defer a decision for three weeks so we can explore some of the
suggestions made as well as other alternatives in consultation with all parties involved.
We want to ensure that we are thorough in our deliberations."
Board member Haile Debas, dean of the UCSF School of Medicine, returned to San Francisco
from England, where he is on sabbatical, to attend the meeting. "We spent a great
deal of time discussing the many complex issues involved and we agreed that we should
explore these issues further, given the importance of the decision," Debas said.
Clinicians, academic leaders, community members and state legislators had urged the Board
to take more time in deliberating the restructuring of services at this 113-year old
hospital, which became part of UCSF in 1990. One of four acute care hospitals united
during the November 1997 UCSF Stanford merger, Mount Zion faces losses of up to $56
million this year, UCSF Stanford officials say.
Administrators say changes are necessary as part of an overall plan to restore fiscal
stability to the entire clinical enterprise, which includes Mount Zion, UCSF Medical
Center, Stanford Hospital and Clinics and Lucile Packard Children's Hospital, and is
projected to end 1999 with a $60 million shortfall. UCSF Stanford is now in the midst of
cutting $170 million from its $1.5 billion budget to break even in 2000.
As part of UCSF Stanford's plan to find $100 million more in cost savings or revenue gains
to achieve a 3- to 4-percent operating margin in 2001, administrators are considering
several options for Mount Zion, which has been experiencing deficits due to a number of
factors.
First, it is difficult to support all of the services involved in running an acute care,
365-bed hospital with a patient census of only 100, says Peter Van Etten, CEO of UCSF
Stanford. Second, revenues from government and private payers are not keeping pace with
escalating costs for drugs, supplies and wages at the hospital. Third, due to a
complicated federal formula for Medicare funding, Mount Zion gets reimbursed significantly
less than the UCSF Medical Center on Parnassus for caring for Medicare patients.
Mount Zion has been losing money for years, UCSF Stanford officials say. Mount Zion's
losses have totaled $159 million in the last six years. But since its integration with
UCSF nine years ago, the medical center has been able to offset its losses with operating
gains earned two miles away on Parnassus. Now that the medical center also faces its own
financial deficit, UCSF Stanford officials say they need to find a way to deliver more
cost-efficient services across both sites.
Earlier this month, Van Etten outlined the options being considered for Mount Zion and
their projected financial consequences for UCSF Stanford:
The option to operate only those functions that
relate to outpatient physician practices and the outpatient clinical cancer center at
Mount Zion and transfer inpatient and emergency care to the UCSF Medical Center would save
about $20 million annually with one-time capital costs of about $11 million;
an option to operate all outpatient services and a
72-hour short-stay unit and move inpatient and emergency care to the UCSF Medical Center
would save about $10 million a year with one-time capital costs estimated at $35 million;
another option to move some clinical programs and
their hospitalized patients from UCSF Medical Center to Mount Zion and fill vacated
services on Parnassus with new programs would initially result in annual losses of about
$3 million to $10 million, depending on the size of the programs transferred. Over several
years, growth at UCSF could restore the loss and generate up to a $13 million annual gain.
One-time capital costs of $36 million to $60 million would be needed under this option.
However services are reorganized, Van Etten says, Mount
Zion will still operate clinics for adults and children, full-service outpatient cancer
services and ambulatory surgery. Both UCSF and UCSF Stanford have significant commitments
in the Western Addition neighborhood, where an outpatient cancer center is under
construction and two medical office buildings and a cancer research facility have been
built in recent years.
All the options are being evaluated in terms of their financial and operational benefits,
impact on the community and employees and effect on academic programs, UCSF Stanford
officials say. Particular care, they add, is being taken to discuss the impacts
of moving the Mount Zion emergency services to UCSF. Mount Zion receives 6 percent of San
Francisco's ambulance calls.
Links:
UCSF Stanford
Health Care
UCSF Stanford Agrees to
Audit, Regents Allow Recovery Plan to Continue
UCSF Stanford Health Care
Weighs Options for UCSF/Mount Zion
Daybreak UCSF Stanford Health
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