As a five-member management team begins the process of dissolving the merger of UCSF Stanford Health Care, the two universities behind the four-hospital system are also considering whether to salvage any shared services from the failed union.
The system announced late last month that it was pulling the plug on its ill-fated merger after posting an estimated $43 million loss over two years (Nov. 1, p. 2).
In anticipation of the separation process, two bond-rating firms have placed the system on their watch lists with negative outlooks. Moody's Investors Service placed the system's rating under review for a possible downgrade, and Standard & Poor's said the system's bonds would remain on its CreditWatch with negative implications.
The two systems are weighing the possibility of trying to continue joint programs for children's services and obstetrics, and also may consider sharing home care, information technology, laboratory services and purchasing, according to an internal newsletter called Transition Times, which delivers news about the merger to UCSF Stanford employees.
Decisions are expected within the next few weeks, and if the two systems opt not to share, all services will be separated within four to six months, the newsletter reported.
The 1,350-bed UCSF Stanford system is made up of Lucile Salter Packard Children's Hospital at Stanford in Palo Alto, Calif.; Stanford (Calif.) University Hospital and Clinics; and the University of California San Francisco Medical Center and UCSF/Mount Zion Medical Center, both in San Francisco. It was created two years ago when Stanford University and the University of California San Francisco decided to meld their healthcare systems.
Before the Oct. 28 announcement that the merger was to be abandoned, UCSF Stanford had announced that Mount Zion Medical Center would be turned into a comprehensive cancer and outpatient center and that its inpatient services would be transferred to UCSF Medical Center. Those plans will not change, said UCSF Chancellor J. Michael Bishop.
The management group overseeing the process includes three members of the Hunter Group, a turnaround firm that has been in charge of the system in recent months, as well as Malinda Mitchell, chief operating officer of Stanford Hospital and Christopher Dawes, COO of Lucile Salter Packard.