U of California health system faces 'existential threat' if it doesn't adapt, health officials say

University of California healthcare officials said the organization's health network may be in jeopardy if it doesn't adapt to the industry's shifting landscape, the Los Angeles Times reports.

Officials with UC Health, the medical arm of the university system, told regents during a meeting Sept. 27 that the health system needs to be more independent of the UC president's office to adapt to the rapidly changing healthcare industry, the report states.

"Standing still, doing nothing, is an existential threat to the UC Health and its components," John Stobo, MD, executive vice president of UC Health, said.

An audit of the university system last year questioned the institution's budget practices and levels of executive pay, and stepped up oversight of the UC president's office. The new constraints have reportedly hampered UC Health's abilities to recruit talented employees and enter into timely contracts, according to a report Dr. Stobo and other healthcare executives presented to regents Sept. 27.

University officials rejected a proposal earlier this year that would have made UC Health, which comprises five academic medical centers and 18 health professional schools, an independent entity. Instead, officials recommended the health system be split into two subdivisions, one of which would be funded by revenue from payments for patient care. The other would be funded by state general funds and fees charged to self-funded health plans. The second subdivision would also be subject to budget constraints and limits on growth imposed by the UC president.

Both subdivisions would still report to the president's office.

To access the full report, click here.

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