California system approves 'novel' leadership structure

The board of directors for Escondido, Calif.-based Palomar Health has approved a management services agreement under which health system executives are employed by a nonprofit, outside management organization rather than a public entity. 

The board approved a 15-year management services agreement with Mesa Rock Healthcare Management in a 5-2 vote on Feb. 29, according to a March 1 news release shared with Becker's.

As part of the agreement, the existing board for the public healthcare district — which is accountable for oversight and implementation of policies, including financial policies, and monitoring of Palomar's performance — will remain in place, Palomar President and CEO Diane Hansen told Becker's during a phone interview last month. A nonprofit, private board will be responsible for the management of the hospital operations, and Mesa Rock would hire Palomar's executive team, though the Palomar board could veto a CEO hire. The same team would then manage the operations of the public healthcare district but will not own the assets. No hospitals or equipment will be transferred to outside ownership. 

"This novel structure will ensure that Palomar Health can continue to meet the healthcare needs of North [San Diego] County, now and in the future," the release stated. 

More specifically, with Mesa Rock as a partner, "Palomar Health will improve its ability to compete against private and for-profit hospital systems and strengthen its financial future, ensuring its public mission of providing healthcare without regard for ability to pay," the organization said. 

Palomar also said the agreement will allow it to affiliate with regional healthcare partners and hospitals systems to drive primary medical care growth and integration; expand medical and surgical oncology care; bring top-quality pediatric care to the area; stabilize relationships with hospital-based physician groups; expand access to laboratory medicine; and improve the health system's ability to negotiate rates with payers.

Palomar is the largest public healthcare district in California, operating hospitals in Escondido and Poway.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars