Two major academic medical centers in the San Francisco Bay area are exploring a consolidation of their hospital operations.
University of California San Francisco Medical Center and Stanford (Calif.) University Hospital confirmed that they have been talking for the last six months but aren't ready to disclose the depth or scope of their discussions. A spokesman said a more definitive announcement about their plans will come in the next two to three months.
"The discussion will explore the feasibility or economies of scale and reduced duplication of investment in new facilities and state-of-the-art equipment," the two academic medical centers said in a joint statement.
Like other academic medical centers located in competitive markets, UCSF and Stanford said the proposed "collaboration" would provide more cost-effective patient care. The medical schools would remain independent, and both institutions would continue providing patient care at their hospital campuses and related clinics.
Combined, the two have $1 billion in assets and nearly 1,200 beds (See chart).
UCSF, owned by the state of California, had net income of $50.6 million on net revenues of $401.6 million in 1994, according to HCIA, a Baltimore-based healthcare research firm. Stanford, a stand-alone facility operated by the university, lost $14.7 million on $416.7 million in net revenues, HCIA said.
"We seek to assure that the education and research of these two premier academic medical centers continue to thrive in a dramatically changing healthcare environment," Stanford University President Gerhard Casper said.
The hospitals haven't said whether it would be a full-asset merger. At least one analyst also downplayed that notion, saying many academic medical centers across the country are simply looking at their options.
"I have not talked to an institution that isn't talking to another," said Robert Dickler, senior vice president of healthcare affairs at the Association of American Medical Colleges.
"We are seeing seminal changes, and people are willing to look at a range of possibilities. There's a tendency to assume that they have reached a conclusion when they haven't."