Giving Away the Hospital

University of California regents are set to vote next week on finalizing a merger of the UCSF Medical Center with Stanford University's health service. Supporters claim the merger -- a transfer of $380 million in public assets to the private sector -- is

(Almost as an afterthought, the bill also exempts directors and officers of the merged medical center from liability under the state's chief conflict-of-interest statute, the Political Reform Act.)

Advocates of the merger are so focused on maintaining privacy for USHC that they have officially contradicted their own previous public assertions in an attempt to avoid coming under the regulation of the Fair Political Practices Commission, which requires government officials to file disclosures of their personal financial interests. In a July letter to the commission, UCSF-Stanford Health Care lawyers argued that the nonprofit's officials are exempt from state financial reporting requirements because the new medical entity is entirely separate from the government. Among other things, the lawyers asserted that:

* "USHC has not and will not receive any appropriations, nor will it receive any tax revenues from the state."

* "UC retains no control over USHC's daily operations or long-term planning."

* "USHC is not obligated to provide the public with opportunity to inspect or copy records."

These statements may persuade the commission to find that USHC has no significant connection to the government and that its directors and executives are therefore exempt from financial disclosure requirements. But the statements in the letter are diametrically opposed to assertions that supporters have made in regard to a UCSF-Stanford merger. And some of the assertions made to the FPPC seem to be, quite simply, false.

In claiming that USHC will be entirely a private affair, the letter suggests the nonprofit will get no state support. Yet preliminary merger agreements call for UC to lease the buildings that compose its medical center to the new corporation for $1. The new corporation will also lease some employees from the University of California -- so that they may remain in California's Public Employee Retirement System. And although the state cannot legally fund USHC directly, there is a plan to pass $12 million in state clinical teaching funding through UCSF and to the hospitals that will be controlled by the new merged medical center.

If USHC is attempting to be both public and private in regard to financial reporting laws, it also has a multiple personality problem as relates to the educational and health care services that are now considered primary missions of both the UCSF and Stanford medical centers.

Merger supporters have repeatedly said that the combination of UCSF and Stanford medical centers will not affect the academic quality of, or the indigent health care provided by, either institution. But that July letter to the Fair Political Practices Commission suggests that USHC's lack of focus on the general public interest is at least as troubling as the manifold conflicts of interest that surround the proposed merger.

In recent years, UCSF has provided some $66 million a year in free medical care to those who cannot afford to pay for it; Stanford provides another $22 million a year of such indigent care.

The July letter to the Fair Political Practices Commission offers a look at the cold, harsh reality of the future -- a future in which the mission of the University of California, San Francisco Medical Center will simply disappear:

"USHC is not taking on those aspects of the provision of health care services which are arguably suffused with public interest concerns," the letter asserts. "USHC is not responsible for operating the med-ical schools. USHC is not obligated to provide medical care for the indigent. USHC is not responsible for carrying on public health research ...."

Later, the authors of the letter spell out the point more clearly, saying that the new, merged UCSF-Stanford Health Care nonprofit corporation "has no general public service mission."

And, those authors are precisely correct. As proposed, the merger of the UCSF and Stanford medical centers will create an institution that includes $380 million in public assets, but the institution will be run by directors and executives who are entirely unaccountable to the public, who are under no legal requirement to serve the public interest -- and who will nonetheless have the power and the financial authority to dictate the level of support that public medical education and public health care will -- or will not -- receive in San Francisco.

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