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Plans for Alta Bates-Summit Affiliation Move Forward.

BERKELEY, Calif.--(BW HealthWire)--July 2, 1999--

Representatives of Summit Medical Center in Oakland, Alta Bates Medical Center in Berkeley and Northern California-based Sutter Health are moving ahead with final plans to bring the two East Bay hospitals together.

This follows an announcement today by the Federal Trade Commission (FTC) that the agency will not go to court to try to stop the affiliation. The affiliation is still subject to review by the California Attorney General's office.

"We are pleased to be able to now move forward in the affiliation process," said Summit Medical Center President and CEO Irwin Hansen. "The affiliation of Alta Bates and Summit into a single not-for-profit medical center will preserve emergency, maternity and acute care hospital services in both Berkeley and Oakland," Hansen added.

"Nobody is more pleased with this announcement than the thousands of patients and local residents who carried and signed petitions supporting this affiliation," said James D. Falaschi, Chairperson, Summit Medical Center Board of Directors and a long time East Bay resident. "This is all about combining our strengths and skills to provide the best possible medical services for our community," Falaschi added.

The FTC's decision comes just days after officials from Summit and Alta Bates released audited financial results from their most recent fiscal years. The two medical centers lost a combined $19.1 million from hospital operations. The losses are the result of the cuts in Medicare reimbursement due to the Federal Balanced Budget Amendment, lost private insurance revenue because of patients leaving the area for care at other hospitals, and uncovered costs to provide emergency and acute care for medically indigent patients. Last year the two medical centers provided more than $50 million of health care services and benefits for MediCal patients, the medically indigent and community outreach activities.

Summit's affiliation with Sutter and partnership with Alta Bates would fix Summit's financial problems. Sutter would take over the hospital's debts and provide immediate cash to cover operating losses until it can achieve the planned economies with Alta Bates. Sutter has committed $450 million in capital over ten years for Summit and Alta Bates to rebuild facilities to meet new seismic standards, provide new equipment, and continue the hospitals' mission to provide charity care and service to the community.

"It's rewarding to know that the Sutter Health network has been able to play a role in a partnership that will preserve and grow local health care services, especially during a time when providers like Alta Bates and Summit are under such financial strain," said Sutter Health President and CEO Van R. Johnson. "This three-way partnership is a clear demonstration of what can be accomplished by working together."

"We are now free to begin planning specific details of the affiliation including administrative and management consolidations and how to bring together certain highly specialized clinical programs," said Warren Kirk, President and CAO of Alta Bates. "Staff and physicians want to combine designated specialty care services in either Berkeley or Oakland in order to increase patient volumes, which studies have shown can improve patient outcomes," he concluded.

Centralizing specialty services, which supporters of the affiliation have long pointed to as a key benefit of the affiliation, will also pool the expertise of Alta Bates and Summit physicians and create much-needed operating efficiencies.
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Publication:Business Wire
Date:Jul 2, 1999
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