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 Sutter Bay Medical Foundation, a California Nonprofit Public Benefit Corporation dba Palo Alto Medical Foundation for Health Care, Research, and Education to Provide Vascular Surgery Services
RECOMMENDATION:
title
Adopt a resolution authorizing an agreement with Sutter Bay Medical Foundation, a California Nonprofit Public Benefit Corporation dba Palo Alto Medical Foundation for Health Care, Research, and Education (PAMF) to provide vascular surgery services, for the term of December 1, 2025 through November 30, 2028, in an amount not to exceed $1,737,000.
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BACKGROUND:
San Mateo County is responsible for providing necessary medical care to its medically indigent population. This care includes vascular surgery and the management and supervision of the service. Sutter Bay Medical Foundation, a California Nonprofit Public Benefit Corporation dba Palo Alto Medical Foundation for Health Care, Research, and Education (PAMF) has provided vascular surgery coverage to San Mateo Medical Center (SMMC) since 2018 to meet community need.
DISCUSSION:
The previous three-year PAMF contract was originally estimated to require 500 hours of physician coverage of outpatient clinics, the operating room, and medical director time in exchange for a flat monthly payment of $36,378 at a total amount not to exceed $1,350,000 based on a .25 full-time provider equivalent. In January 2025, the parties amended the agreement with this Board’s approval, adding $200,000 to the not-to-exceed amount because extra surgical and clinic services were being provided, triggering add-on services payments under the terms of the contract. To meet community demand for services, SMMC is currently accruing $44,822 per month in its outpatient clinics and the operating room. Based on the current spending rate, SMMC estimates the annual cost of the previous contract to be $537,861.
The proposed agreement replaces the lump-sum payment structure of the previous contract with discrete services categories paid at a negotiated hourly rate for outpatient clinic coverage, surgery blocks in the operating room, unrestricted on-call coverage, and medical director support. Going forward, PAMF will provide up to 52 four-hour blocks of coverage in SMMC’s outpatient clinics at a rate of $288 per hour, 52 four-hour blocks of operating room coverage at $288 per hour, 24/7 unrestricted on-call coverage at $49 per hour, and ten hours of medical director services at $288 per hour. The proposed contract would provide for up to 536 hours of vascular surgery coverage annually, excluding unrestricted on-call coverage time, at an estimated annual cost of $579,000.
The rates in the new contract are 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 80% of patients who are positive for tobacco use will receive smoking cessation counseling.
PERFORMANCE MEASURE:
|
Measure |
FY 2025-26 Estimated |
FY 2026-27 Projected |
|
Percentage of patients who are positive for tobacco use will receive smoking cessation counseling. |
80% |
80% |
COMMUNITY IMPACT:
PAMF’s continued vascular surgery coverage at SMMC will positively impact health outcomes because delivery of vascular surgery 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. Within the past 18 months the largest cohorts of specialty care patients at SMMC were female (52%), Hispanic or Latino (63%), and primarily Spanish-speaking (55%). SMMC strives to eliminate bias in the medical profession by providing 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 PAMF providers 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 December 1, 2025 through November 30, 2028. The amount of the agreement is not to exceed $1,737,000 for the three-year term. Funds in the amount of $579,000 are included in the SMMC FY 2025-26 Adopted Budget. Similar arrangements will be made for future years.
Based on the annual spending rates in the expiring contract and the proposed agreement, the proposed contract would represent an 8% increase in cost. However, it does offer more clarity regarding specific hours of coverage.
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.