UCSF Health, in collaboration with California Attorney General Rob Bonta, has announced a cooperative settlement agreement that preserves vital health services and promotes health equity in San Francisco. The agreement addresses UCSF Health’s acquisition of Dignity Health’s San Francisco hospitals, including Saint Francis Memorial Hospital (SFMH) and St. Mary’s Medical Center (SMMC). Collectively, the institutions play a crucial role in serving a diverse population, including elderly, unhoused, and publicly insured patients who depend on Medi-Cal, Medicare, or charity care for essential healthcare services.

The agreement, which received judicial approval today, codifies commitments UCSF Health originally made when the acquisition was approved by The Regents of the University of California and later as part of its definitive agreement with Dignity Health. It reflects the health system’s efforts to expand access to high-quality health care for all San Franciscans, regardless of their ability to pay.

“We want to ensure that Saint Francis and St. Mary’s are places our communities can continue to rely on for excellent care. This agreement underscores our commitment to the community and our responsibility to maintain and enhance healthcare services at both hospitals,” said Suresh Gunasekaran, president and chief executive officer of UCSF Health. “We are grateful that Attorney General Bonta shares our dedication to safeguarding the health of San Franciscans and appreciate his partnership in reaching this cooperative agreement.”

In February of this year, UCSF Health affirmed its intention to maintain Saint Francis and St. Mary’s existing services, ensuring patients have convenient local access for their primary and specialty care needs. As part of that, the organization intends to make immediate and significant capital investments and infrastructure improvements. The organization also committed to retaining the employees of both hospitals and preserving their open medical staffs, ensuring local doctors can continue to practice at each location and preserve longstanding patient-provider relationships.

Reflecting those commitments, under the cooperative agreement UCSF Health will:

  • Continue to operate SFMH and SMMC as licensed general acute care hospitals, maintaining or expanding current service levels and staffing.
  • Continue to participate in Medi-Cal and Medicare.
  • Provide an annual amount of charity care at SFMH equal to or greater than $6.5 million and at SMMC equal to or greater than $3.5 million with an annual increase of 2.4% at both hospitals.
  • Provide an annual amount of community benefit spending for community healthcare needs at SFMH equal to or greater than $1.6 million and at SMMC equal to or greater than $10.7 million to increase yearly by 2.4% at both hospitals.
  • Invest at least $430 million, including at least $80 million for electronic medical record systems and related technologies, and at least $350 million in deferred maintenance and physical infrastructure improvements at both hospitals.
  • Maintain existing service contracts with the City and County of San Francisco unless terminated for cause.
  • Not condition medical staff privileges or contracts on affiliation with UCSF Health and ensure that hospital medical staff can maintain relationships with providers outside the UC Health system.
  • Maintain independent negotiation of payor contracts for SFMH and SMMC, with a price growth cap for five years to limit year-over-year charge increases.

A copy of the complaint and settlement agreement can be found here and here.