Friday, September 26, 1997
UC Regents merge UCSF and Stanford
HOSPITAL: Proponents claim center will improve care, but
legality of decision questioned
By Hala Ali
Daily Bruin Senior Staff
Last Wednesday, the University of California Regents made the
highly controversial decision to merge the UCSF and Stanford
hospitals, creating an economic healthcare giant.
After two and a half years of meetings, committees and lengthy
debates, the board voted seven to one, with Regent Frank Clark
dissenting, to combine the two institutions. Full operation as one
entity will begin Nov. 1.
Concerns surrounding the legality and the financial affects of
the merger are abundant. Many argue that this deal is privatizing a
public asset.
"Now we will create the premiere academic healthcare center that
can emphasize superb translation of research and patient care,"
said Haile Debas, UCSF Chancellor.
With the increasingly threatening and demanding healthcare
market, proponents of the merger say it will increase revenues and
patients for medical research, as well as provide new training
opportunities. It is also supposed to bring forth a diverse and
talented pool of faculty and an adequate population of
patients.
The merger will allow the faculty to link with community-based
groups and physicians in outlying areas, and expand their outreach
efforts, according to Dr. Larry Shapiro, chairman of the department
of pediatrics at the UCSF School of Medicine.
The new entity will also enable the use of new, but expensive
technologies and possibly engage the support of several major
medical foundations.
"First, it will create the nation’s foremost academic health
center in Northern California," Debas said.
"Second, the merger sets the stage to create a revolution in the
way academic health care is both organized and delivered."
By creating one giant healthcare provider, the hospitals hope to
become more powerful in their bargainings with managed-care
firms.
However, privatizing a public resource is a violation of the
constitution of California. Because UCSF is a governmental entity,
its assets belong to the people.
Included in the deal, are the UCSF Medical Center, UCSF/Mount
Zion, Stanford University Hospital, Lucile Salter Packard
Children’s Hospital at Stanford, and the clinical practices of the
medical school facilities.
The two universities have also agreed to transfer specific
assets to the new entity, such as equipment, leasehold rights,
cash, medical center accounts receivable, investments, contract
rights, and books and records.
Not included in the merger, however, are the two medical schools
and their undergraduate medical education, biomedical research, and
fund raising.
The faculty members, residents, and postdoctoral fellows will
also remain at their respective institutions. Opponents of the
merger are also concerned with its repercussions on indigent care.
Warren Gold, UCSF professor of medicine stated that there were
serious financial and legal concerns, especially with delivery of
medical care to the poor.
"If UCSF and Stanford aren’t going to take of the poor, then who
is?" he asked.
However, proponents argue that care for the indigent and the
needy will still remain a priority of the new enterprise.
Richard Atkinson, UC President, along with several other
proponents, included the preservation of the financial and
strategic viability of the UCSF clinical enterprise in the
(argument) for the deal.
Atkinson called the merger "a realistic and innovative response
to the new world in which academic medical centers now find
themselves."
Last year, the two schools together had 1,038,904 patients,
1,748 full-time clinical faculty and 6,981 community physicians.
The number of contracts with vendors between the two medical
centers was 12,500, representing $130 million in goods and
services.
However, many point to the statistics and earnings of UCSF
alone, showing that it has been financially successful on its own
over the past few years.
According to Clark, UCSF ended last year with $26 million,
beating its projected gain of $3.6 million by $17.6 million.
Although he voted for the merger, Regent Ward Connerly also
expressed his concerns regarding the financial aspects.
"I’m troubled by the fact that the financial rationale is still
in conflict with the research rationale. There is a $40-50 million
difference in performance."
Calling the merger, a "non-objective propaganda campaign," Clark
said that the regents had the duty to examine all facts on a
totally objective basis.
"The regents are proposing to enter a billion dollar merger for
which there is no financial precedence."
Campus leaders involved in the formation and development of the
merger claim that 80 percent of UCSF faculty are in favor of the
deal.
Earlier this year, UCSF Stanford Health Care committed to offer
employment to no fewer than 95 percent of all current employees.
Peter Van Etten, chief executive of UCSF Stanford Health Care, now
says that around 98 percent will be offered employment.
There are other benefits to employees of UCSF as well. UCSF
Stanford Health Care will offer a base wage salary equal to what an
employee previously earned. Employees at least 40 years old with at
least 10 years of retirement service or at least age 50 with at
least five years of retirement service will be offered the
opportunity to remain employed by UC and "leased" to UCSF Stanford
Health Care. This will enable them to stay in the UC retirement
system.
UCSF Stanford Health Care has also met with unions that
represent UCSF and Stanford employees.
Speakers at the meeting claimed that the merger was is based on
money and that the institution will become just another healthcare
business. Many feel that the regents are giving away one of
California’s top institutions.
"How long the public will tolerate this financial disaster is
for anyone to guess," said Clark.
The new institution will be, however, subjected to open-records
and open-meeting laws as outlined in a bill passed in September by
state lawmakers. This does not include collective bargaining or
other contract negotiations, sale of a certain property, pending
lawsuits, or the terms of health care contracts.
University leaders claim that these exceptions were made in
order to allow the hospitals to be competitive in the
marketplace.
"Privatization of any branch of the University of California is
a clear and outright violation of the constitution of California,"
said Clark. The legality of the merger is now pending in the
courts.