UCSF, Dignity Health Call Off Plans to Expand Hospital Affiliation

May 30, 2019 - The University of California San Francisco (UCSF) Health is no longer pursuing a more integrated hospital affiliation with Dignity Health, one of the nation’s largest health systems that operates 24 Catholic hospitals, UCSF leaders recently announced.

Sam Hawgood, MBBS, UCSF Chancellor, and Mark Laret, UCSF Health president and CEO, decided to end talks to deepen the collaboration between the two provider organizations after students, providers, and other stakeholders expressed concerns about the organization teaming up with a faith-based organization.

“Many of you have expressed strong concerns about a significantly expanded UCSF relationship with a healthcare system that has certain limits on women’s reproductive services, LGBTQ care, and end-of-life options,” Hawgood and Laret wrote in the letter posted on the UCSF website.

Hawgood and Laret emphasized that the organization is “particularly sensitive to addressing the unique needs of women, LGBTQ patients, and those facing end-of-life decisions, as well as expanding access to welcoming and respectful healthcare.”

In an emailed response to RevCycleIntelligence.com, Dignity Health agreed that the provider organizations “cannot move forward with the partnership as originally planned.”

Dignity Health’s Catholic hospitals must abide by the Ethical and Religious Directives for Catholic Health Care Services promulgated by the United States Conference of Catholic Bishops, the health system explains in its mission statement.

According to the June 2018 update of the directives, Catholic healthcare facilities cannot provide or condone contraception practices except natural family planning counseling for married heterosexual couples, perform in-vitro fertilization or any other services that result in conception outside of a female’s body, use sperm or ovum donors, perform abortions, or assist in hastening a patient’s death.

The directives only apply to Dignity Health’s 24 Catholic hospitals. But through its mission, the health system extends certain care restrictions, such as the ban on in-vitro fertilization and abortions, to all its hospitals.

UCSF Health would have remained independent under the proposed affiliation, which would have broadened the collaboration to Dignity Health’s Dominican Hospital in Santa Cruz and expanded primary care, surgical, and specialty services UCSF providers could perform in Dignity Health hospitals.

However, UCSF providers would have had to follow Dignity Health’s mission and rules when practicing within a hospital owned by Dignity Health.

Faculty and providers expressed concerns about aligning their medical center with a faith-based organization that restricts care for certain patient populations, including the LGBTQ community and women.

But the more integrated affiliation with Dignity Health would have allowed UCSF Health to open more beds to patients.

UCSF has experienced capacity issues in the last couple of years. Their hospitals had to turn away 855 patient transfers in 2018 because the facilities did not have beds available, USCF Health reported when announcing the proposed affiliation with Dignity Health.

Additionally, as many as 70 patients per month are currently transferred to St. Mary’s Medical Center, one of the three Dignity Health hospitals part of the original hospital affiliation agreement from 2017.

Despite the end of a more integrated hospital affiliation, Dignity Health and UCSF Health plan to continue working together to improve care access to the community.

“We remain committed to our existing partnership with UCSF Health, which includes many important services, such as mental health, robotic surgery, neurology, vascular podiatry, adolescent psychiatry, and several others,” Dignity Health stated. “Going forward we will explore ways to work together to meet all patient needs and increase access to critical health services.”

Strategic hospital affiliations, as well as more formal mergers and acquisitions, are popular strategies for provider organizations to expand care access within certain communities.

Provider organizations announced 90 merger and acquisitions (M&A) deals in 2018, consulting firm Kaufman Hall reported. But even as healthcare M&A remains hot, providers are also pursuing looser affiliations to leverage the same economies of scale and other capabilities as a more formal arrangement without the pomp and circumstance.

Provider organizations must deal with regulatory approvals and state and federal scrutiny before merging or acquiring another organization. Looser affiliations do not have to go through the same regulatory processes.

However, provider organizations may want to start considering the ethical or cultural implications of aligning themselves with another organization. As the UCSF Health-Dignity Health case shows, leaders may need to start thinking beyond the financial and legal issues before deciding to affiliate themselves with other local providers.