With its bottom line continuing to disintegrate, Northern California's largest academic medical center, UCSF Stanford Health Care, may close one of its hospitals.
The struggling 1,350-bed system lost $31 million on revenues of $762.2 million through the six-month period ended Feb. 28. It lost an additional $6.7 million in March.
Officials at San Francisco-based UCSF Stanford acknowledge the future of the 19-month-old system, created by a controversial merger of four academic medical centers in November 1997, could be at stake.
Frank Clark, a member of the University of California Board of Regents and a merger opponent, used a May 20 meeting of the regents to call for the merger to be dissolved. So far, none of the other 26 regents have joined Clark in that stance, but the heat is on.
In response to its financial and political woes, the system is considering closing acute-care services at its UCSF/Mount Zion Medical Center in San Francisco.
The other three hospitals in the system include the University of California San Francisco Medical Center and two other facilities: Lucile Salter Packard Children's Hospital at Stanford, in Palo Alto, and Stanford (Calif.) Hospital and Clinics.
UCSF Stanford spokesman Mike Lassiter said operations at both San Francisco campuses are under intense review, "which opens up all kinds of possibilities." But it will be "two or three months before the fate of Mount Zion is known," he said.
Of the system's $31 million loss through February, $23.7 million, or 77%, was attributed to Mount Zion. The facility has a higher percentage of Medicare and Medi-Cal patients than the system's other hospitals and has been hit harder by the 1997 Balanced Budget Act.
In late March, UCSF Stanford announced plans to slash 2,000 full-time-equivalent jobs from its 12,500-member work force to help offset its growing budget deficit (April 5, p. 22). Officials say the deficit will hit $170 million over the next two years unless drastic cuts are made.
The staffing cuts were recommended by consulting firm and turnaround specialist the Hunter Group, of St. Petersburg, Fla. The cuts represent 16% of the work force and are expected to save $112 million. About 780 people will be laid off, with attrition accounting for the remainder, Lassiter said. About half of those layoffs have already occurred.
An additional $58 million will be cut in pharmaceutical and supply costs, and through other, unspecified measures.