Stanford (Calif.) University Medical Center last week announced an affiliation that will put the business operations of the 607-bed teaching hospital and Stanford's faculty practice plan in the same corporation.
Industry experts said Stanford's move will benefit payers because they'll be able to negotiate inpatient stays and physician fees simultaneously. That type of approach could help academic medical centers become more competitive with their non-teaching hospital counterparts under healthcare reform and in hot markets such as Stanford's in the San Francisco Bay area.
Stanford University trustees and the board of directors at Stanford University Hospital on Feb. 8 endorsed the creation of Stanford Health Services. Financial details of the arrangement weren't final.
"This plan will help Stanford Medical Center create the type of effective, integrated healthcare delivery system that healthcare reform, no matter what direction it ultimately takes, will require," said Stanford University President Gerhard Casper.
"What they are basically saying is that the physician practice plan and the hospital practice plan will be one business unit rather than two independently linked businesses," said Christine Malcolm, vice president for managed care at the University Hospital Consortium, an Oak Brook, Ill.-based alliance.
With the new relationship, physicians on the Stanford medical school faculty and those at the Menlo Medical Clinic, a wholly owned subsidiary of Stanford University Medical Center, and Redwood Medical Group, a partially owned subsidiary, will become a new organization called the Stanford Physicians Group.
"This strengthened Stanford Medical Center will assure the population of the Bay area and Northern California (will have) access to a medical center able to provide cost-effective care that is also state-of-the-art," said Kenneth Bloem, Stanford Hospital's president and chief executive officer.
After financial and strategic plans are reviewed, the university will vote in June on the final approval of Stanford Health Services. The new corporation, which would be tax-exempt, is expected to be operational by September.