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Hospital Merger
Many historical and cultural differences complicated the merger. As a
private institution, Stanford Hospital was an outgrowth of the
university's medical school. As part of a private, well-endowed
institution, its faculty has enjoyed a long history of research and
teaching in an aesthetically pleasing and academically stimulating
atmosphere. Employees were not unionized.
While UCSF shares a similar reputation as one of the nation's leading
medical schools and research centers, its location within a metropolitan
area and its definition as a public facility have shaped it into an
institution that simultaneously had to answer to budget-conscious state
officials while responding to the needs of the community. Unlike
Stanford, its buildings were paid for by tax dollars, and most health
care employees belonged to a union.
Some critics thought it would be impossible to merge the centers in a
way that would benefit both universities and the patients - as well
as the insurers who paid the bills. But merger supporters insisted there
was no choice: Come together, or die apart.
As hard as it is to understand how two world-class medical institutions
were under such dire threat, both had been slammed by the rapid
consolidation of health care systems in California. With the creation of
ever bigger health care plans and HMOs, all refusing to pay top dollar
for care that could be provided cheaper elsewhere, both Stanford and
UCSF found their hospital use declining.
In recent years, occupancy rates had fallen to around 60 percent. Both
hospitals also realized they were often competing for the same patients.
Financially, it became apparent that many millions of dollars could be
saved annually through an integration of administrative duties such as
purchasing, laundry, billing, marketing and computer systems and that a
more efficient operation would make the two medical centers more
attractive to HMOs.
But for two years, a series of sticky issues central to the differences
between the two centers were raised by critics, members of both boards,
the California legislature and the general public: What information
about the new facility would be public? Who would own UCSF's buildings,
all built with public money? How would the hospitals continue to conduct
research while reaching out to the underinsured and the uninsured?
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