The University of California Health is bullish on its future even as the state's five medical centers will be challenged by a payer mix that's shifting rapidly to Medicaid.
The system is projecting growth as it comes off a building campaign and, like most health systems, continues to transition to value-based care.
At an investor presentation at the JPMorgan Healthcare Conference, executives Monday outlined efforts to increase collaboration among their hospitals in order to increase their purchasing power, cut costs and manage care for special populations.
UC Health recently completed a seven-year, $1.6 billion capital campaign that supported a new campus for the University of California at San Francisco in the city's Mission Bay neighborhood. The campus includes a women's hospital, children's hospital, cancer center and outpatient services.
But while the public health system is in building mode, it is also facing the reality of operating in a state where one-third of the population is now covered by Medicaid.
Although California is no longer facing the deficit from earlier this decade, Gov. Jerry Brown's proposed fiscal 2017 budget came under fire last week for not rolling back the recession-era rate cuts that were implemented in 2011. California's Medicaid rates are among the lowest in the country relative to Medicare rates, according to data from the Kaiser Family Foundation.
UC Health's medical centers are working more closely together and jointly developing strategies for cost reductions, clinical service lines and managing care for special populations, including a systemwide Medicaid strategy.
Managed-care contracting is another joint focus. “That doesn't mean we all get the same rates,” said Dr. Jack Stobo, UC Health's executive vice president. But “it's either all in or all out.”
The system aims to save at least $150 million per year over the next five years, with savings coming from places like supply chain and revenue-cycle management.
In fiscal 2015, net revenue at UC Health increased to nearly $9 billion compared with $8.1 billion during its previous fiscal year, mostly due to higher patient volume, according to a financial statement.