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About this blog: I am a native of Alameda County, grew up in Pleasanton and currently live in the house I grew up in that is more than 100 years old. I spent 39 years in the daily newspaper business and wrote a column for more than 25 years in add...  (More)

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Decision time for ValleyCare members

Uploaded: Oct 9, 2014

Ballots are now in the corporate members' hands after the ValleyCare Health System board announced that it has finalized its agreement to affiliate with the Stanford Health Care.
The 2,200 members of the non-profit health care corporation must approve the deal. It is a no-brainer given the homework that the board and senior executive have done in a very short period of time.
Earlier, they sought proposals from potential partners. ValleyCare operates in an area with excellent demographics from a health care standpoint (lots of employed people covered by insurance) so it is a desirable partner and clearly could not stand alone in the brave new world of ObamaCare. It also has a quality employee group and an excellent group of affiliated doctors.
Just how important ValleyCare can be in the Stanford strategy can be seen by the capital it is willing to put into the system. It has committed to covering $85 million in existing ValleyCare debt plus agreeing to invest another $50 million over the next three years.
Earlier this year, the system was in danger of missing its bond covenants when the board dismissed long-time CEO Marcy Feit and installed Scott Gregerson as interim and then permanent CEO. With the system losing money each of the last five years, there has not been money to invest.
Board Chair John Sensiba pointed out that transitioning the system to electronic health records is a $1 million investment alone, one that competing systems such as Kaiser have completed over the last number of years. As a Kaiser member, I have been impressed with the capabilities of the electronic records—they were very helpful when I was hospitalized to deal with a persistent infection in my finger and the hospital doctor could see exactly what medications I was taking. My experience with hospitalized relatives demonstrated that it is not necessarily always the case.
If the members approve, the ValleyCare corporation will have one member—Stanford Health. It will be governed by an 11-member board, eight appointed by Stanford and three appointed by the ValleyCare board. Sensiba emphasized that the ValleyCare members will have veto power on some potential decisions.
The ValleyCare leadership decided to move ahead with Stanford after seeking proposals and receiving six from well-qualified organizations. Confidentiality agreements forbid Sensiba and other ValleyCare officials from identifying the other organizations, but, looking at the Bay Area health care situation, it's likely that the University of California San Francisco and Sutter Health were among the corporations submitting proposals. ValleyCare has had partnerships with UCSF for a number of years in pediatric and neonatal medicine and Sutter already operates Eden and Alta Bates/Summit in Alameda County.
For the fledgling ValleyCare physicians' foundation, its contract with the hospital system will be assumed for the time being. Whether the physicians will affiliate with Stanford will be up to the two entities and the individuals involved to sort out as time passes.
Current ValleyCare corporate members have the opportunity to join a new charitable foundation that will be seeded with $3 million from Stanford. Long-time Pleasanton community leaders, Bob and Joyce Shapiro, have taken over leadership of the ValleyCare Foundation board and injected new energy into it—the foundation has an upcoming fundraiser with a custom bottling from Rubino winery.

What is it worth to you?


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