The city of San Francisco is considering enlarging its public health and hospitals system by creating an alliance with two private hospitals.
Those two hospitals, Davies Medical Center and St. Luke's Hospital, are examining strategic alternatives to their independent status.
Rich Cordova, chief executive officer of San Francisco General Hospital Medical Center, one of two public hospitals in the city, said the goal is "a safety-net publicly operated integrated delivery system."
With city-owned San Francisco General and Laguna Honda Hospital, plus 10 community clinics, and public-health, substance-abuse and mental-health services integrated into one delivery system, "we have something unique going on here in San Francisco," Cordova said. "When you add together the notion of a St. Luke's or Davies into that formula, imagine the opportunities it creates. We're trying to do the same kind of model in the public sector that they do in the private sector," he said.
Cordova stressed that the idea is "in its infancy stage. A lot of discussion has to take place." Labor unions would play an integral part in any such public-private partnership, Cordova said.
St. Luke's lost $1 million last year on $70 million in revenues. Some 400 union workers granted wage concessions this month to ease its financial problems.
Ginger Ayala, senior vice president of St. Luke's, said: "We are getting ready to send out a request-for-proposals for affiliation. We're looking for a strategic partner." San Francisco General would be considered, she said, as would "the usual hospital groups in Northern California: Catholic Healthcare West, Sutter-CHS, and the for-profits, Columbia/HCA or Tenet."
St. Luke's has 252 operational beds and runs a census of 130 to 150. It's sponsored by the Episcopal Church.
Davies runs a census of 90 to 100 on 200 staffed beds, said Dave McGrew, its chief financial officer. "We feel we need to align ourselves, either in a full merger with a local institution or one of the for-profit organizations, such as Tenet or Columbia," he said.
Davies runs about a 1% loss on operations but overall had a net profit of $2.7 million on revenues of $57 million in 1995, he said.