UCSF Health, John Muir Join Forces
Two potent hospital players in the Bay Area and East Bay have joined forces to create a new healthcare network in the region.
UCSF Medical Center, the predominant teaching and research hospital in San Francisco, and John Muir Health, a two-hospital system in the East Bay, signed a letter of intent on Wednesday to form a new company that would focus on improving care and cutting costs for the region's residents. A deal is expected to be finalized later this year.
Combined, the three hospitals treat tens of thousands of patients in the Bay Area and the East Bay annually.
“We looked at a number of affiliation options that would allow us to grow without compromising our mission...we found the right fit with UCSF,” said Cal Knight, John Muir's chief executive officer.
Officials released few details Wednesday regarding the joint venture, including its name, its governance and financial details of the alliance.
John Muir and UCSF did say that their preliminary focus would be to create an accountable care organization, as well as jointly roll out an electronic medical records system that operates on the Epic platform. The company also intended to create enhanced physician practice management services for physicians within the Bay Area.
“UCSF Medical Center and John Muir Health recognize that health care delivery changes brought about by health care reform are here to stay,” said UCSF CEO Mark Laret. “Both organizations have a demonstrated track record of delivering high-quality care at an affordable cost through ACOs. This experience will be used to provide the value that Bay Area and Northern California residents, patients, employers and payers are looking for from trusted healthcare providers.”
Peter Boland, a Berkeley-based healthcare consultant, said the joint use of the Epic system was the bigger of the two developments.
“That's the strongest part of the affiliation. A shared platform for communications within a common infrastructure is a big step,” Boland said. “It shows a strong potential for better coordinated care.”
However, he was far less sanguine about the formation of an ACO. Although some Northern California ACOs – such as Blue Shield's collaboration with Hill Physicians Group and Catholic Healthcare West – have reaped millions of dollars in savings for patients and their payers, the savings remain relatively small.
“Most ACOs have only been able to accomplish marginal cost savings at best,” he observed. Boland added that most employer groups are now looking for significant cost cuts – 20% or more – in order to buy into the ethos of an ACO.
John Muir spokesperson Ben Drew said both parties were exploring health plans to work with on the ACO, but that nothing has been finalized as of yet. ACO enrollment projections were also unavailable.
