UCSF/STANFORD MERGER: HOSPITALS CONSIDER LEASE OPTION
University of California-San Francisco (UCSF) and StanfordThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
University medical centers "are considering leasing, rather than
transferring, their soon-to-be-merged hospitals and even some
employees to a new private entity," SAN FRANCISCO EXAMINER
reports. The decision follows recent hearings on the
controversial deal that focused on the transfer of public assets
to a private concern (see AHL 3/11). In testimony before the
state Senate Judiciary Committee, UCSF administrators said Friday
that the "assignment of [the] leases could be completed July 1,
when the deal becomes final." The new entity, called UCSF
Stanford Health Care Corp. (USHC), would remain a private,
nonprofit corporation, but because it "would be leasing the
hospitals," it would not receive a "gift of public assets" from
UCSF, according to university general counsel James Holst.
REAX: State Sen. John Burton (D) was skeptical of the deal,
saying that the UC property should be "leased out at fair market
value." He said, "I don't want some sweetheart deal." UC
officials said, however, that the universities would "retain
ownership of the land and buildings and would lease the hospitals
to the new entity on an unspecified 'long-term basis.'"
According to the EXAMINER, "If the merged entity dissolves, all
assets would be transferred back to the UC regents and Stanford
trustees." William Kerr, director of the UCSF Medical Center,
and soon to be COO of USHC, said, "Failure to pursue this merger
will not only place UCSF in greater financial jeopardy, but ...
if UCSF and Stanford remain separate, we must expect the academic
medical center arms race to continue" (Krieger, 3/15).