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1st appeared
14
December
2000
UCSF Stanford Releases Final Financial Results The board of directors of UCSF Stanford Health Care yesterday (Dec. 13) reported a loss of $127 million incurred during the merger's last seven months, a period that ended on March 31. Net operating revenue for both UCSF Medical Center and Stanford Medical Center was about $900 million for that period. During the previous two years of the merger, UCSF Stanford lost an estimated $49 million, bringing its total loss to about $176 million, an amount split by UC and Stanford. William H. Gurtner, vice president of clinical services development at UC's Office of the President in Oakland and a member of the UCSF Stanford board, said, "The financial results for UCSF Stanford Health Care reflect many of the challenges we face, together or separately, in this health care market." The losses were attributed to a number of factors including declining reimbursements from the federal government and large HMOs, the high cost of labor and services in the Bay Area, the relatively low price of fee-for-service health care in the region, and the lack of adequate cost controls in the merged operation. In the last several months of the merger, costs were also incurred to separate systems, such as financial and computer systems, that had been combined under UCSF Stanford. UCSF Medical Center and Stanford Medical Center, which merged their health care operations on Nov. 1, 1997, dissolved their joint operations at the end of March. The goal of the merger was to provide cost-effective health services, improve community access to the latest advances in medical science and maintain strong medical training programs in a challenging healthcare environment. The UCSF Stanford losses had the effect of decreasing the net assets returned to each partner. Financial statements, prepared by UCSF Stanford management, were audited by the accounting firm of Arthur Andersen, LLP. Mark Laret, CEO of UCSF Medical Center, said the loss reported yesterday will not change the medical center's fundamental financial situation or its plan for financial recovery. The audit by Arthur Andersen is a formal reconciliation or accounting of assets and liabilities that have already been split and taken into consideration, he said. Laret added that the medical center is on track to rebuild systems and improve efficiency to meet the high demand for patient services it is experiencing this year. With the conclusion of this audit, "we can now close the door on this difficult chapter in our organization's history and move forward to revitalize UCSF Medical Center," Laret said. |
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