UCSF-STANFORD: Chronicle Conducts a Pre-Mortem

      The San Francisco Chronicle features an analysis of the troubled merger between the University of California-San Francisco and Stanford University hospitals, reporting that as UCSF-Stanford Health Care approaches a "financial reckoning," the "current crisis was shaped by a combination of bad luck and management blunders." The system, which expects to lose $60 million this year and lay of 2,000 workers, negotiated "money-losing contracts" with health plans, saw attempts at consolidation foiled by "resistance from rival faculty chiefs," became a "dumping ground" for expensive patients, added staff and raised its average salary base, the Chronicle reports. The system's bleak outlook has many regents questioning whether the merger should be dissolved. UC Regent and Lieutenant Gov. Cruz Bustamante (D) said, "I don't think they made the case for continuing the merger. I'm still waiting for them to make the case why we should continue throwing good money after bad."

The First to Go
      Regardless of the fate of the marriage, first on the chopping block may be UCSF's Mount Zion Hospital, which "appears destined to be downgraded to a daytime clinic" after sustaining $24 million in losses during the first six months of this fiscal year -- 80% of the system's $31 million overall losses in that period. But the loss may have been more acceptable if Mount Zion's sister hospital, UCSF Medical Center, had not been dragged into the red by the 1997 Balanced Budget Act. With both Stanford and UCSF faculty unhappy with the deal, "[l]ike a page out of Civil War history, people speak of the merger in terms of conflict, North and South" (Russell/Schevitz, 6/17). The Chronicle devotes additional coverage to exactly how the 1997 BBA affected the hospital system by slashing Medicare subsidies to teaching hospitals (Abate, 6/17).