UCSF STANFORD: Posts $11 Million Q1 Loss, Layoffs Likely
A first-quarter loss of $11 million has ended the honeymoon following the marriage of UC-San Francisco and Stanford hospitals. UCSF Stanford Health Care President Peter Van Etten said the losses stem from low Medi-Cal, Medicare, and private insurance payments and a $125 million expenditure for Y2K compliance. Moreover, he "said administrators may have been preoccupied by the mechanics of melding and reacted too slowly to a changing environment." The merger "was a much larger, more laborious, more difficult job then we thought it would be, and there were increased costs over and above what we projected," he said. The system has hired the Hunter Group to pull it out of the red, and has a financial recovery plan that includes a 15% staff cut, mostly in administration and support staff. Van Etten said the hospital system has a staff-to-patient ratio of 7.9, compared to 6.5 for other teaching hospitals. Officials hope the recovery plan will put the hospital system on track to "break even in 2000 and post a 3% profit in 2001" (Locke, AP/Contra Costa Times, 3/18).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.