         
|
|
|
|
1st appeared 14 September 1999 UCSF Officials Respond to Concerns at Legislative Hearing Chancellor Mike Bishop and Lee Goldman, recently appointed acting vice chancellor for medical affairs, appeared September 2 at the state legislative hearing to answer questions about UCSF Stanford Health Care’s fiscal troubles. By virtue of their UCSF positions, both men also are members of the UCSF Stanford board of directors. "It is imperative for me and my colleagues at UCSF and Stanford that the hospitals of the merger thrive," Bishop said. "They are essential to our missions of education, discovery, health care and public service. They are part of our academic family and we care greatly about them. It follows that we are eager to work with public officials such as yourselves to assure the survival and health of our hospitals." Senator Jackie Speier, D-San Francisco/San Mateo, who chaired the hearing of the state Senate Committee on Government Oversight, said she would support a legislative solution to fix the ailing health care system if the plan includes saving Mount Zion Medical Center. At the end of the hearing, however, legislators did not say what their next step would be. David Hunter, head of the Florida-based hospital management firm the Hunter Group, also testified before legislators. Hunter, interim chief executive officer of UCSF Stanford, said the 22-month-old merger should be given a chance. "We will be able to return to profitability in a reasonable timeframe," he said. In other developments:
UCSF Stanford attributes most of its $66 million operating deficit this fiscal year to losses incurred at Mount Zion. To balance its $1.5 billion budget, UCSF Stanford had considered closing the emergency department and inpatient units at the 113-year-old hospital located in the Western Addition. The proposals prompted outcries by employees, the public and local officials. More than 100 supporters of Mount Zion gathered outside its emergency department during an Aug. 26 candlelight vigil to raise awareness for preserving services at the embattled hospital. In response to UCSF Stanford’s financial crisis, UC President Richard Atkinson and Stanford University President Gerhard Casper asked their respective staffs to review the organizational structure of the entire merger. Teams led by William Gurtner, systemwide vice president for clinical services development at UC, and Mariann Byerwalter, vice president for business affairs and chief financial officer at Stanford, are expected to complete their review by October 1. The university presidents also asked Haile Debas, dean of the UCSF School of Medicine, who is on sabbatical in Oxford, England, to recommend what to do with Mount Zion. Debas is expected to make that recommendation to the UCSF Stanford board sometime soon. "As we grapple with these losses -- in or out of the merger -- we hope we can keep both hospitals open and would love to keep both as close to their current configurations as possible," Goldman told legislators. "But it doesn’t take a computer to add up the numbers we’ve been presented by the hospital financial people, the Hunter Group, and even the state auditor. It appears that our hospitals in San Francisco will need to be restructured substantially unless we receive significant outside support." Said Bishop, "Academic health centers have routinely provided diverse and crucial social services without adequate compensation for those services. In the past, we have dealt with this shortfall by generating budget surpluses in the profitable parts of our institutions. Those days are over. Someone else must now pay." Audit highlights Despite the current financial difficulties, the state audit report released last week indicated that UCSF Stanford "may generate $140 million in profits in the next two years if portions of the $270 million in revenue enhancements and costs savings" are achieved. UCSF Stanford is in the midst of cutting $170 million, including eliminating 2,000 jobs, and must find another $100 million in savings or additional revenues to return to profitability by August 2001. Cost reductions will be necessary regardless of whether the medical centers remain together or separate, the report states. In contrast, the report projected a collective loss of up to $93 million if the hospitals had remained independent. UCSF and UCSF Stanford officials, who generally agreed with the audit conclusions, were heartened that the auditor cited potential benefits of the merger if given time and flexibility to succeed. "The auditor’s conclusion that UCSF Stanford Health Care may realize $140 million of financial benefits from the merger in the next two years is testimony to the merger’s promise," said Isaac Stein and Howard Leach, chair and vice chair, respectively, of UCSF Stanford’s board of directors in a joint statement. "At the same time, the loss projected absent the merger demonstrates that the underlying health care environment in which we operate has deteriorated markedly due to further reductions in government support, a highly competitive market for private health insurance and rapidly rising costs for new drugs, medical technologies and skilled staff. This confirms the original reasons for the merger." While the 80-page state audit outlines the external health care financing challenges facing UCSF Stanford and other academic medical centers nationally, it also identifies internal problems of the merger. "One of the greatest disappointments of the merger may be [its] failure to achieve the level of integration and cooperation between the two medical schools anticipated at the outset," the audit states. "Without such integration, the likelihood of achieving the long-term academic and financial benefits of the merger is greatly reduced." And, as such, the future of UCSF Stanford remains unknown, it stated. Goldman told the legislators that many of UCSF’s faculty members have tried to make the hospital merger work. "Children’s Services, which represent about one-third of our clinical programs, have been increasingly well-coordinated between UCSF and Stanford. Other collaborative efforts between the schools of medicine were moving forward, for example, in adult cardiac services and in 17 other joint projects, until they ceased or even regressed when the hospital’s acute financial bleeding diverted its attention." The state audit also reported:
The audit also acknowledges UCSF Stanford's commitment to patient access to health care, quality of health care and support of community programs. UCSF Stanford spends more than 7 percent of its revenue ($110 million annually) on charity care and other community benefits, compared to an average of 1.3 percent at other California hospitals. "Based on several indicators, patients in the Bay Area appear to have more access to care since the merger," the report states. "Furthermore, a survey of 25,000 patients and referring physicians conducted by the hospitals indicates that patient satisfaction with the quality of care appears just as high as it was before the merger. In concert with its emphasis on access and quality of care, [UCSF Stanford] continues to furnish services to the low-income and vulnerable populations in the community." The report cautioned however, that "to the extent that [UCSF Stanford] cannot turn around its medical and financial outlook, patient access to quality care, as well as continued community benefits, may be affected in the future." The auditor’s report concludes that the merger led to a loss that’s greater than the loss that would have been incurred if the hospitals had operated separately during the first two years -- $27 million separately, versus $46 million merged. Under the auditor’s calculations, the merger resulted in an additional $19 million loss. However, the report includes in its analysis the merger-related expense of $17 million a year of new pension costs due to the move of UCSF hospital staff out of the University of California's fully funded pension plan. If that expense were not included, the merger would have performed better in the first 22 months than the hospitals separately, according to the auditor's estimates. The report, which includes a UCSF Stanford response to the audit, is available on the web at www.bsa.ca.gov/bsa/summaries/99128sum.html. Links: UCSF Stanford statement in response to auditor's report Audit Reveals Benefits and Challenges of UCSF Stanford Merger Previous Daybreak stories on UCSF Stanford Source: Lisa Cisneros, Newsbreak editor |
||
DAYBREAK | ARCHIVES | CALENDAR
| CAMPUS NOTES Copyright ©1999 Regents of the
University of California. All rights reserved. |
||
