By Tim Hunt
John Muir-San Ramon hospitals invade ValleyCare's home turfUploaded: Feb 6, 2014
The announcement this week that the John Muir Medical Systems-San Ramon Regional Hospital joint venture has purchased an office building in Pleasanton further roils an already challenging health care market.
ValleyCare Medical System has served the Livermore Valley for more than 50 years, existing side-by-side with the Kaiser system throughout its history. ValleyCare operates its hospital in Pleasanton as well as urgent care and outpatient surgery centers on the original campus in Livermore. Kaiser has physician offices in Pleasanton and Livermore and opened a new center in San Ramon last week.
In recent years, ValleyCare opened its second urgent care center in Dublin. It shares a building with the Palo Alto Medical foundation.
The Palo Alto group, the physician affiliate of the Sutter Health System, has offices in building owned by the Eden Township Healthcare District on Tassajara Road. Sutter has operated the Eden Medical Center in Castro Valley since 1997, taking over the district hospital that was built in 1948.
The John Muir-San Ramon Regional partnership spent about $19 million for the vacant building at 5860 Owens Drive. Spokesmen said the partnership plans to have an urgent care center there as well as offices for primary care physicians and some specialists. The non-profit John Muir bought a 49 percent stake in San Ramon Regional, owned by for-profit Tenet Health Care, in 2013 for $100 million.
When the building is opened next year, it will mean two urgent care centers (ValleyCare's in Dublin and the Muir-San Ramon Regional) less than a mile apart with the main ValleyCare hospital between them.
Its part of the scramble by hospitals to develop vertically integrated systems similar to what Kaiser has offered for years to cope with the demands of Obama Care, which will reduce reimbursements to hospitals.
ValleyCare CEO Marcy Feit saw the trend coming five years ago and started to set up the hospital's own physicians' group to partner with the hospital. The foundation now has some of the best physicians in the valley in its network.
Feit also has reached out and built excellent partnerships with the University of California San Francisco's Medical Center for specialty care for infants and children; and with UC Davis for cancer treatment. Cancer patients who once had to leave the valley for chemo and radiation treatments can now be treated locally.
USCF provides the clinical staff for the neonatal intensive care unit at ValleyCare that allows infants needing that level of care to remain here. That partnership potentially got even better last month when the Benioff Children's Hospital (UCSF) and Children's Hospital & Research Center Oakland (Children's Oakland) formalized their partnership.
The latest move by Muir-San Ramon demonstrates just how competitive it will be for medical care providers as everyone strives to adjust to the demands of ObamaCare.
Here's hoping that a much better solution comes out of changes in Congress and the White House over the next three years.