San Jose Mercury News: New health care law: Hospitals pressured to slash costs, improve quality of care

By Tracy Seipel

The new federal health care law is giving millions of uninsured Americans health coverage — and many of them are expected to get long-delayed surgeries and seek other crucial medical care.

So why are some hospitals up for sale or desperately seeking to align with others?

One reason is that the health law pressures hospitals to reduce costs and offer better value through new rules that reward them more for the quality of care they deliver than for the number of patients they treat.

“If hospitals cannot adapt and play under the new rules,” said Maribeth Shannon, a director at the California HealthCare Foundation, “it will be a challenge for them to survive.”

Just this month in the Bay Area, the financially strapped nonprofit Daughters of Charity Health System, based in Los Altos Hills, announced it will sell its six hospitals — four in the Bay Area and two in Los Angeles. And last week, UCSF Benioff Children’s Hospital and Children’s Hospital in Oakland formally linked arms to help broaden their services and cut costs. In October, Sutter Health transferred ownership of the beleaguered San Leandro Hospital to the Alameda Health System.


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