UCSF STANFORD HEALTH CARE: ‘A Troubled Experiment’
Although administrators at the University of Califonria-San Francisco and Stanford University medical systems insisted in 1997 that they would be stronger as a merged entity than they would be apart, a Fresno Bee editorial notes that evidence now "suggests that merging alone doesn't resolve the underlying financial problems facing academic medical centers in California's cutthroat health care marketplace." Former UCSF Stanford President Peter Van Etten "crowed" in Health Affairs this March about the "logic" of the merger, boasting that it saved $20 million in administrative costs. But as health care forecaster Jeff Goldsmith pointed out, "$20 million in one-time administrative savings on a revenue base of $1.3 billion is budget dust." He said the merger amounted to a "prestige cartel." The Bee also asks why the system was adding 968 full-time positions and increasing subsidies of the two universities' medical schools "when it was facing a projected budget deficit of $170 [million] over the next two years?" The editorial concludes: "It took a small army of lawyers and consultants to construct this marriage. It now faces its first severe test. If this experiment ultimately fails, one shudders at the prospect, and the cost, of devising a divorce" (8/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.