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1st appeared 30 July 1999 Mount Zion Supporters Breathe Sigh of Relief
"We're very pleased that the board has listened to our concerns," said Jeffrey Pearl, Mount Zion chief of staff. "This is the best outcome we could have hoped for given the circumstances." Pearl said he and other Mount Zion faculty and staff would make themselves available to discuss a long-term strategy for preserving Mount Zion's stellar patient care, teaching and research endeavors. The board had considered three options, two of which involve closing Mount Zion's inpatient units and the emergency department and expanding those services at UCSF Medical Center, to stem financial losses at the two UCSF hospitals. (See "UCSF Stanford Explains Pros and Cons of Options for Mount Zion" for details. "This was an extremely useful day for the board, and it gave us some issues to think about that we want to explore further,'' said board chair Isaac Stein at a press conference to announce the decision. Reading from a statement, he said, "We want to ensure that we are thorough in our deliberations." Stein said the board would hold a special meeting to discuss Mount Zion's future in about three weeks with the exact date to be set later. Meanwhile, a state audit of UCSF Stanford's finances is due to be completed at the end of August. UCSF Stanford ended June with a $5 million operating loss, bringing the total year-to-date deficit to $56.5 million, reported Larry Furnstahl, chief financial officer. Together, the UCSF Medical Center and Mount Zion account for $58 million of the projected $60 million total deficit this fiscal year. Despite $170 million in ongoing cost reductions across the UCSF Stanford organization to balance its $1.5 billion budget, the two UCSF hospitals will not eliminate their deficits over the next two years without major changes in programs or the reconfiguration of services, administrators say. UCSF Stanford must find another $100 million in savings or revenue gains to achieve a small operating margin by 2001 to allow for minimal improvements and investments, such as buying new medical equipment. Consolidating services at Mount Zion and UCSF Medical Center offers the best single opportunity to save money and to preserve the health of the entire organization, administrators say. The UCSF Medical Center is facing the same fiscal challenges as all hospitals in an era of dramatic changes in health care financing. Mounting Support The board's decision to further review options came after about 30 health care workers, union representatives, patients, and community members spoke in favor of preserving services at Mount Zion. Patients praised Mount Zion for saving their lives and commended its staff for providing compassionate care. Faculty and staff spoke of the popularity and quality of its teaching and research programs, which would be limited if Mount Zion were to operate only outpatient services. Others voiced concern about access to health care, especially among the low-income and indigent populations. Many urged the board to work in cooperation with the community and elected representatives to find a solution or at least postpone action until after the state audit reviews UCSF Stanford's finances. "Please do not cut off this lifeline to the San Francisco Bay Area. Do what is right and wait for the audit. Please use your wisdom and do what is right for the great Mount Zion community," said Ruben Chafee, who described himself as a public and religious educator and representative of the NAACP. He said his family has benefited from the "sweet and beautiful care" at Mount Zion for three generations.
"We are unanimous in our belief that Mount Zion needs to develop long-term solutions to current problems," said Melnick, who submitted a report citing his concerns and urging the board to give Mount Zion more time to turn things around. For example, he suggested, UCSF Stanford could apply for one joint operating license for UCSF Medical Center and Mount Zion to reduce expenses for the hospital accreditation process. Melnick pledged a $5 million contribution from the Mount Zion Health Fund, a nonprofit community endowment, as an enticement to help keep the hospital's emergency room and inpatient services open for 18 months until construction of the new $40 million outpatient cancer center, located adjacent to Mount Zion, is completed. Melnick and others said they are skeptical about the accuracy of the financial losses attributed to Mount Zion. He questioned a $5.5 million loss associated with radiation oncology, a service not currently offered at Mount Zion. The loss is attributed to Mount Zion because Mount Zion pays the UCSF Medical Center for providing those services, administrators explained after the meeting. Such "intra-company transfers" occur when patients in one hospital receive services from another, they say. Mount Zion's own radiation oncology services were combined at UCSF Medical Center as an interim measure until the cancer center at Mount Zion opens in April, when it will offer radiation therapy services in a modern facility. Laurel Hodgson, director of the Mount Zion emergency room, was critical of the management of the merger and also urged the board to work with the Mount Zion staff, who have demonstrated their "commitment, dedication, energy and family spirit." "Given the time and a well thought-out plan, we can and we will make Mount Zion economically viable," she said.
Four primary care residents, among the 30 working at Mount Zion, also asked the board to maintain Mount Zion's status as a full-service teaching hospital. "Loss of an acute medical care facility would undo UCSF's many years of effort to establish itself as an institution with close ties with the community," said one resident. Mounting Losses UCSF Stanford administrators first began looking at how to restructure services at Mount Zion in May. But the hospital has had a history of operating at a deficit both before and after it integrated with UCSF in 1990, said Kerr. In subsequent years, UCSF has invested heavily in developing new patient programs at Mount Zion, including expanding primary care clinics and creating a multidisciplinary cancer center that is expected to receive designation as a National Cancer Center in the near future. Two new medical office buildings and a cancer research building have been built nearby. The outpatient cancer treatment center will open in April. Yet despite more than $130 million in capital improvements in the area, Mount Zion continues to lose money, Kerr said. Losses totaled $159 million between 1992 and 1998. Prior to this year, the UCSF Medical Center generated enough money to be able to offset Mount Zion's losses. In addition to changes in health care financing, the delivery of care has been transformed as developments in research and technology allow health care professionals to give complex care that requires very short hospital stays or no overnight stay at all. Developments in minimally invasive surgery, cancer chemotherapy and drug therapies for HIV, to name a few, once required hospitalization but are now done on an outpatient basis. Mount Zion's acute care census has declined from about 150 patients per day to about 100 since 1989. None of the options offered by administrators would close Mount Zion, Kerr said. Under all options, Mount Zion would maintain the outpatient cancer center and the faculty physicians' practices in the medical office buildings, including active primary care practices in general internal medicine, general pediatrics and obstetrics-gynecology. By consolidating services at UCSF and Mount Zion, UCSF Stanford could achieve savings by eliminating the high, duplicative fixed costs of running two general acute care hospitals and could secure certain reimbursement benefits under Medicare rules, administrators say. Due to a complicated federal formula for Medicare funding, UCSF Stanford is reimbursed less for Medicare patients served at Mount Zion than at the UCSF Medical Center. Following a decision by the UCSF Stanford board, administrators will give appropriate notice to the San Francisco Health Commission and the Emergency Medical Services Section of the Department of Public Health of San Francisco as well as to licensing authorities, following all review procedures, administrators say. The UCSF Medical Center is using temporary workers to help save jobs for Mount Zion employees, should they be displaced, Kerr said. Links: UCSF Stanford Explains Pros and Cons of Options for Mount Zion Board Postpones Decision on Fate of Mount Zion UCSF Stanford Agrees to Audit, Regents Allow Recovery Plan to Continue UCSF Stanford Health Care Works Toward Financial Recovery Complete Daybreak archives on UCSF Stanford Source: Lisa Cisneros, Newsbreak editor |
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Members
of the UCSF community breathed a sigh of relief last Friday when the
UCSF Stanford Health Care board of directors decided to defer its decision
on the fate of Mount Zion for three weeks so it can explore alternatives.
The
most comprehensive defense of Mount Zion came from its leaders, David
Melnick, chair of the Mount Zion board of trustees which serves as an
advisory group to administration, and Pearl, a surgeon for 21 years.
Pearl is chief of a medical staff that includes 100 full-time faculty
and 80 residents. 
Supervisor
Amos Brown addressed the emotional and symbolic significance of Mount
Zion, saying the hospital has contributed to the "health and happiness
of this community." He and others testified that Mount Zion is considered
a haven serving diverse, low-income patients and offering health care
and employment to African-Americans once shunned elsewhere.