Allows hospitals to cooperate on doctors, insurers, other functions

GREENBRAE AND SONOMA – Marin General Hospital and Sonoma Valley Hospital have finalized a management services and affiliation agreement, a move both administrations say will help reduce costs while keeping two independent health care districts viable in a land of corporate giants.

The Marin Healthcare District put forth a proposal for a shared management services agreement, which the Sonoma Valley Health Care District approved last Thursday.

“This will just enhance our ability to develop an integrated model of care between what we can do in Marin and what they can do in Sonoma,” Marin General CEO Lee Domanico said. “It’s more cost effective.”

Talks between the two health care districts began last September as each hospital was charting its course through rough financial and transitional periods.

Marin General, the North Bay’s largest independent hospital with 235 beds, parted ways with Sutter Health nine months ago after a longstanding battle for control of the hospital. Sonoma Valley, meanwhile, struggled to remain financially sound, posting an $850,000 loss in 2009.

Since then, both districts have strengthened bottom lines and the affiliation agreement will help further stability, officials said.

The agreement “will further the mutual goals of both entities and will serve their respective districts by enabling them to fulfill their missions and to secure for their communities better and more cost effective care,” said Sonoma Valley Finance Committee Chairman Dick Fogg.

Mr. Domanico said Marin General, as a larger health care district, offered to assist Sonoma Valley and possibly other health care districts in the future, lending all parties involved economies of scale while increasing services for patients.

“There are a lot of things we can do with patient care and strengthen ourselves if we work together,” he said. “We’re both districts, and if we can help out smaller districts we will.”

A partnership will enable both administrations to share more physicians – both are supporters of the Prima Medical Group – negotiate better reimbursement rates, and possibly reduce IT, billing and marketing services, officials said.

“Our management teams will work together to look for opportunities where we can share services, consolidate some of our service and share expertise,” Mr. Domancio said.

Sonoma Valley said the agreement will establish a “seamless network of all levels of clinical care” and will enable the 83-bed hospital “to deliver more cost effective health care.”

The agreement between Marin and Sonoma is not the first such arrangement in the North Bay. Late last year, Healdsburg District Hospital and Santa Rosa Memorial, which is operated by St. Joseph Health System, entered into an alliance, citing similar clinical benefits and shared physicians.

Mr. Domanico said Marin General would continue to seek other partnerships, particularly as it continues its transition.

“Now that we are a free-standing hospital, I believe there will be opportunity in the future to work with other free standing hospitals to the north for our mutual benefit,” he said. “We are a potential ally for some of those smaller hospitals.”