Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Colleen Chawla, Chief, San Mateo County Health
Chester J. Kunnappilly, MD, Chief Executive Officer, San Mateo Medical Center
Subject: Agreement with Galen Inpatient Physicians, PC dba Vituity for Hospitalist Services
RECOMMENDATION:
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Adopt a resolution authorizing an agreement with Galen Inpatient Physicians, PC dba Vituity to provide hospitalist and medical director services, for the term of June 1, 2026 through May 31, 2029, in an amount not to exceed $13,379,636.
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BACKGROUND:
Under 22 Cal. Code Regs § 70205, San Mateo Medical Center (SMMC) requires professional inpatient medical services under the supervision of a physician certified or eligible for certification in the specialty of internal medicine to meet California’s “Title 22” general acute care hospital licensing requirements. SMMC meets these regulatory and patient-care requirements by contracting for “hospitalist” physicians who are certified or eligible for certification in the specialty of internal medicine to provide and supervise medical services to SMMC patients day and night until the patient is discharged.
In 2014, SMMC recognized the need to modernize its inpatient hospitalist service and issued a Request for Proposals (RFP) to evaluate the market’s ability to provide a dedicated group of full-time hospitalist physicians to improve quality of care. That RFP resulted in the selection of a large multi-state physician group to provide hospitalist services.
In 2017, consistent with existing County procurement rules, SMMC conducted an informal solicitation for provider groups to take over the incumbent group’s contract when the latter contractor could not successfully resolve contractual service requirements. The informal solicitation consisted of reaching out to several of the vendors that responded to the 2014 RFP. Of those vendors, Galen Inpatient Physicians, PC dba Vituity (Vituity) demonstrated an ability to take over the service within a short three-month window. Vituity already had an established track record for providing high quality care in SMMC’s Emergency Department under the group’s CEP America California (and preceding California Emergency Physicians, Inc.) arm. With the support of Vituity, SMMC was able to seamlessly switch to Galen Inpatient Physicians, PC. Vituity successfully recruited a highly talented team of predominantly local physicians. Since that time, vendor performance has been constantly monitored by SMMC medical leadership, and this contractual relationship has been reevaluated every three years to ensure the group is meeting the terms of the agreement aligned with SMMC goals and that rates are consistent with market rates. Vituity continues to meet or exceed all SMMC goals, and it is SMMC’s assessment that this group remains the best market option for San Mateo County and SMMC. Therefore, SMMC requests authorization of this new three-year contract.
DISCUSSION:
Vituity will continue to provide hospitalist physicians and medical director services covering medical management of SMMC’s 2AB (medical/surgical) unit, critical care unit (CCU), 3AB (inpatient psychiatric) unit, and 1A (skilled nursing facility or SNF) unit. The quantity of services will remain unchanged compared to the previous contract. The group provides 10 full-time physician equivalents (10 FTEs) for physician coverage. Coverage consists of two physicians covering 2AB and the CCU during the day and one physician at night - with these specific physicians covering 1AB (SNF) overnight; one physician providing a ten-hour shift covering 3AB (psych); and one physician covering the 1A (SNF) unit during business hours. During the day the Medical Director will additionally administratively cover 2AB (medical/surgical), CCU, and 1A (SNF).
The rates in the new contract are, as required by law, within fair market value according to VMG Health, a nationally recognized medical services valuation firm that relies upon multiple industry-standard provider compensation surveys and aggregates that data.
The County Attorney has reviewed and approved the resolution and agreement as to form.
The resolution contains the County’s standard provisions allowing amendment of the County fiscal obligations by a maximum of $25,000 (in aggregate).
It is anticipated that the hospitalist medication reconciliation workflow and documentation will be complete upon patient discharge 100% of the time.
PERFORMANCE MEASURE:
|
Measure |
FY 2026-27 Projected |
FY 2027-28 Projected |
|
Percentage of time that hospitalist medication reconciliation workflow and documentation will be complete upon patient discharge |
100% |
100% |
COMMUNITY IMPACT:
Vituity’s hospitalist coverage will positively impact equitable health outcomes because delivery of medical services at SMMC, a public safety net hospital, addresses community need. SMMC’s patients span a wide spectrum of races, ethnicities, gender, and gender-identities. Since November 1, 2024, half of SMMC’s patients were male and half were female, with the largest cohort of patients being Hispanic or Latino (58%), and primarily Spanish-speaking (48%). SMMC strives to eliminate bias in the medical profession by providing culturally competent training to its physicians and by following up with patients to ensure that they continue to have access to specialized care. SMMC specifically tracks physician satisfaction survey results and requires Vituity’s physicians to meet with SMMC and discuss patient feedback to improve patient satisfaction and remove potential barriers to care.
FISCAL IMPACT:
The term of the agreement is June 1, 2026 through May 31, 2029. The amount of the agreement is not to exceed $13,379,636 for the three-year term. Funds in the amount of $371,657 are included in the SMMC FY 2025-26 Adopted Budget. Funds in the amount of $4,459,879 are included in the SMMC FY 2026-27 Adopted Budget. Similar arrangements are made for future years.
Compared to the current annual cost of hospitalist coverage under the expiring agreement, the proposed agreement’s cost will increase stepwise each year by 2% during the three-year term. As referenced above, this compensation level is well within market rates as determined by fair market value analysis.
Expenses at SMMC are covered by fees for services or third-party payors whenever possible. The portion of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full costs of care is covered by the County’s General Fund contribution to SMMC and is within the existing annual appropriation.