August 16, 1999

Presidents ask staffs for reassessment of medical center merger

By Chuck McFadden,
UC Office of the President

Stanford University president Gerhard Casper and UC president Richard C. Atkinson announced earlier this month they will ask their staffs to reassess the structure of the two universities' merged health care organization.

"We believe that the current structure has not given us the flexibility to deal with the complexities unique to our respective institutions," Casper and Atkinson said in a letter to Isaac Stein, chairman of the board of UCSF Stanford Health Care, the not-for-profit public benefit corporation formed in 1997 with the consolidation of two medical centers operated by UC San Francisco and two operated by Stanford.

The two university presidents said Haile Debas, dean of the UCSF School of Medicine, would make a recommendation on the future of UCSF/Mount Zion Medical Center to the UCSF Stanford Board of Directors at the board's regular Aug. 27 meeting. UCSF/Mt. Zion, part of the merged organization, is experiencing severe financial losses.

"We also recognize that any decision about the future of the Mount Zion site will primarily affect the long-term viability of the University of California, San Francisco, School of Medicine and the community it serves. Given the severity of the current financial situation at Mount Zion, we believe that the University of California must, together with the state legislature and the community, determine, and be responsible for the future of Mount Zion" the letter said. "Mount Zion has always been an asset to the community it serves and should continue to be regardless of its ultimate use and configuration.

"Stanford supports UCSF's right to make this decision," the letter added.

The reassessment will be completed and a decision made by Oct. 1. Mariann Byerwalter, vice president for business affairs and chief financial officer at Stanford, and William H. Gurtner, systemwide vice president for clinical services development at UC, will lead the staff work.

"Since November 1997 UCSF Stanford Health Care has made significant progress in consolidating financial services and purchasing, in correcting deficiencies in information technology, and in pursuing joint contracting," the two presidents said in their letter to Stein.

"More importantly, we have made progress in bringing academic clinical services together. This is especially true for Children's Services, where the leaders have developed a shared vision of how our two schools of medicine could, and should, collaborate both to strengthen their academic enterprises and to improve the health of the children of Northern California. We do not wish to lose these successes," they said.

The letter added: "The financial pressures on university hospitals are even greater today than they were when UCSF Stanford Health Care was established in 1997. For this reason we remain convinced of the value of the consolidations of many functions central to both UCSF and Stanford. These include financial information technology, shared purchasing, joint contracting, and other operations. Further, the consolidation, especially of Children's Services, but also of gynecologic oncology, laboratory services, and other areas of teaching and research, offers significant programmatic and operational opportunities that we still wish our schools of medicine to pursue aggressively."

Stein said he and the UCSF Stanford Health Care board welcomed the Casper-Atkinson letter.

"We share the concerns expressed by Presidents Casper and Atkinson, and we will do everything possible to assist in the reassessment," he said.

Stein said the board would appoint a committee to work with the Stanford and UC staffs.

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