Sharp Healthcare has formed a joint venture with nearby University of California at San Diego to create a single program for liver transplants.
The collaboration will allow the larger health system to more seamlessly send its end-stage liver disease patients to UCSD for transplantation, and keep more liver transplant patients in its network.
Sharp, which has five hospitals in the San Diego area, has nearly 30% of the market share in the region, and already treats a large number of patients before and after their transplants, said Dan Gross, Sharp's executive vice president of hospital operations.
The system had initially considered starting its own transplant program but chose to partner instead. Larger volume centers tend to have higher quality, Gross said, and there are only so many donor livers available to transplant.
San Diego currently has two hospitals that perform liver transplants: UCSD and Scripps Green Hospital in La Jolla.
UCSD had 69 people on its waiting list as of July 1, 2014, and during the next year, performed 37 transplants, including three living donor transplants, according to the Scientific Registry of Transplant Recipients. Scripps had 108 people on its waiting list and performed 44 transplants during that timeframe.
The size of the program can often determine how fast a waiting list moves because transplant centers with longer waiting lists typically receive more organs for consideration, said Laura Aguiar, principal at consulting firm Transplant Solutions. In turn, more patients are then attracted to the larger program.
The collaboration will allow Sharp and UCSD to streamline the pre-transplant evaluation process for Sharp's patients, and reduce the duplication that would occur when patients transferred from one program to the other. “The theory is that we'll be able to move our patients through the pre-transplantation evaluation phase more efficiently,” Gross said.
UCSD will continue to perform the liver transplants at its hospital. The two organizations have had a similar partnership in place for bone marrow transplants since 1999.
Successful transplant programs can create a halo effect for an institution because of the social good of turning tragedies into lifesaving events. Patients who receive transplants also need medical management for the rest of their lives.
“Looking at the halo effect, it could be viewed as lucrative for the institution,” Aguiar said.
In its most recent financial statements for the year ended Sept. 30, Sharp reported an operating surplus of $351.7 million on total revenue of $3.4 billion. That was an improvement from its $234.4 million operating surplus on $2.9 billion in total revenue during fiscal 2014.
Net patient service revenue increased 18.8% while premium revenue grew 12.9%. Although inpatient admissions dropped about 1.1%, the system saw an 8.4% increase in outpatient visits and a 6.6% uptick in emergency room volume.
Its payer mix also shifted as more patients gained insurance coverage. Self-pay patients accounted for 1.4% of its gross revenue mix compared with 2.9% in fiscal 2014. Its share of patients with Medicaid increased to 23.9%, a 1.5 percentage point bump year over year.
Sharp also saw a significant benefit from the return of California's provider fee program, which helps supplement Medicaid payments but had been on hold in 2014 while waiting for the CMS to approve its extension.
The net benefit for the system was $99.8 million in fiscal 2015 compared with just $7.5 million in the previous fiscal year.