Dear UCSF Community,

We are excited to announce that UCSF Health is in preliminary discussions with Dignity Health to acquire their clinical presence in San Francisco, including St. Mary’s Medical Center (SMMC), Saint Francis Memorial Hospital (SFMH) and associated outpatient and urgent care clinics. We continue to experience record demand for our services, and space constraints limit our ability to care for the community. This acquisition will provide capacity to decant our existing facilities, see more patients, and enhance critical health care services in our city by broadening access to UCSF Health’s world-class, research-driven care.

What this means for San Francisco

This is an important opportunity to build on our long history of caring for San Francisco. We know that the wellbeing of our city depends on preserving and expanding community-based resources to support behavioral and women’s health, as well as surgical services. SMMC and SFMH are vital to their neighborhoods, and the unique services they provide—some of which are the only ones of their kind in San Francisco—are valuable to the entire community. We plan to retain and strengthen those services. In addition, the acquisition will allow us to increase our investment in the health of San Francisco at a time when major cities—including our own—face economic and infrastructure challenges.

The acquisition will also help UCSF Health meet the health needs of more people in our community who are underserved. Dignity Health is currently the largest provider of Medi-Cal services in California. As we transition the ownership of these facilities, we will continue to honor our shared commitment to improve the health of vulnerable populations, regardless of their ability to pay.

What this means for UCSF Health and UCSF

Over the last year, I have rounded in various departments and units at UCSF Health, and the request I hear most from our teams is for more space: more inpatient beds, more surgical time, more clinic rooms—more capacity to meet the needs of our community. This acquisition is an opportunity to directly address those concerns. The additional beds will also help us manage patient demand during the nine-year construction timeline of the new hospital at our Parnassus Heights campus.

As with any acquisition of this size, there are still many details to still be worked out, but a few key items are assured:

• SMMC and SFMH will become UCSF Health facilities when the acquisition is complete.
• As part of the integration, the hospitals will no longer have any religious affiliation and will not be subject to Ethical Religious Directives or Statement of Common Values.
• Our plan is to substantially maintain the existing workforce of the two hospitals. Organizational integration takes time, and many aspects of the acquisition are still to be determined. Ultimately, we envision having all employees be a part of UCSF Health.
• A collaborative process that supports the continuity and quality of patient care is UCSF Health’s top priority. In partnership with the UCSF School of Medicine, we expect to engage with existing members of the SMMC and SFMH medical staff to develop long-term plans for staffing and services.
• As always, our PRIDE Values will guide our actions throughout this process.

The ongoing financial stresses facing UCSF Health remain a reality, but we have made substantial progress over the last six months that has put us on firmer financial ground. Importantly, this acquisition will allow us to sustain that financial stability by alleviating our top economic challenge: limited capacity to serve patients who seek our care.

Next steps

The University of California Board of Regents is meeting in San Francisco from July 18–20 and their agenda includes a request to approve UCSF Health’s starting the process of negotiating definitive agreements with Dignity Health. Over the next several months we will engage in robust stakeholder discussion, customary due diligence, and research.

We are in the preliminary stages of this process, which means we do not have more information to share at this time. As we work with Dignity Health and our many stakeholders to develop terms and determine our path forward, we will continue to keep you informed.

These are exciting times for UCSF Health and our city. While the work ahead of us is significant and not without risk, the opportunity to advance the health of San Francisco and positively impact our community is far greater.

Thank you for all that you do for our community and one another.

Suresh Gunasekaran
President and Chief Executive Officer
UCSF Health