UCSF Health and California Attorney General Rob Bonta have signed a cooperative settlement agreement to preserve key services and clear the way for the health system's $100 million acquisition of two San Francisco hospitals.
The agreement, which received judicial approval July 2, outlines UCSF's commitments to maintain vital services and promote health equity once it acquires two Dignity Health hospitals: Saint Francis Memorial Hospital and St. Mary's Medical Center, both of which are in the city.
The hospitals play a key role in serving a diverse population, including elderly, unhoused and publicly insured patients who depend on Medi-Cal, Medicare or charity care for essential healthcare services, the health system said in a news release shared with Becker's.
Under the cooperative agreement, UCSF Health will:
- Continue to operate the two hospitals as licensed general acute care facilities, and maintain or expand current service levels and staffing.
- Continue to participate in Medi-Cal and Medicare.
- Provide at least $6.5 million in annual charity care at Saint Francis and at least $3.5 million St. Mary's, with an annual increase of 2.4% at both hospitals.
- Provide at least $1.6 million a year for community healthcare needs at Saint Francis and at least $10.7 million at St. Mary's. These figures will increase by 2.4% a year at both hospitals.
- Invest at least $430 million: About $80 million for EHR systems and related technologies $350 million in maintenance and infrastructure improvements at both hospitals.
- Maintain existing service contracts with the City and County of San Francisco unless terminated for cause.
- Not condition medical staff privileges or contracts on affiliation with UCSF Health and ensure that hospital staff can maintain relationships with providers outside the UC Health system.
- Maintain independent negotiation of payer contracts for both hospitals, with a price growth cap for five years to limit year-over-year charge increases.
"We want to ensure that Saint Francis and St. Mary's are places our communities can continue to rely on for excellent care," UCSF Health President and CEO Suresh Gunasekaran said. "This agreement underscores our commitment to the community and our responsibility to maintain and enhance healthcare services at both hospitals."
Dignity Health, part of Chicago-based CommonSpirit, signed a definitive agreement to sell the hospitals to UCSF Health in February.
The transaction is expected to close Aug. 1.