UCSF-STANFORD: Mt. Zion’s Acute Care Existence Severely Threatened
"The bleak picture of the UCSF-Stanford Health Care merger became even grimmer yesterday with a report that operating losses in May were double those expected," the San Francisco Chronicle reports. The news couldn't be worse for Mt. Zion Hospital's future as an acute care facility. San Francisco-based Mt. Zion has accounted for the lion's share of UCSF-Stanford's losses since the 1997 merger -- $56 million out of $60 million -- according to hospital officials. And yesterday's report projects the hospital will need $30 million in seismic upgrades by 2008 -- $5 million more than expected -- and a total of $300 million by 2030 in order to meet state codes for full-service hospitals. As a result, the UCSF-Stanford board may decide as early as next week to move forward with plans to cut some of the hospital's services.
The report was released yesterday to the University of California Board of Regents, which will take up the issue when it meets tomorrow. The report shows that May's operating losses rolled in at $10.3 million, more than twice the previous months' average losses. The losses stem from "a puzzling decrease in the number of patients admitted to UCSF-Stanford's four hospitals." System spokesperson Mike Lassiter urged patience while savings from recent layoffs take effect. "We are still projecting the same pattern. It was one month. We have not started to really feel the impact of the cuts," he said. At the rate the system is going, losses are expected to reach $170 million across the next two years. But even if it can cut enough to eliminate those losses, the report noted, it will need to generate $96 million more "in either increased revenues or additional cuts just to reach a 3% margin and allow the hospital[s] to update and build" programs. Warren Hellman, an investment banker on the UCSF- Stanford board, also "counseled patience," saying "Hyperbole is not the answer here." The Chronicle article contains a rundown of recent expenditures contributing to the losses and a timeline showing "milestones of the merger" (Schevitz, 7/13).