Officials with French Hospital Medical Center and San Luis Diagnostic Center celebrated their new collaboration on Monday with a new sign and mock ribbon-cutting at the San Luis Obispo imaging center.
Dignity Health, which owns French Hospital, purchased San Luis Diagnostic for an undisclosed sum on Friday. The center, at 1100 Monterey St., is now an outpatient department of French Hospital.
The center will continue to provide the same services with the same staff, and its founder, Dr. Fred Vernacchia, will serve as its medical director, French Hospital chief executive Alan Iftiniuk said.
Iftiniuk said the purchase allows French Hospital to expand the imaging services it can provide patients in an office setting.
“The technology here is unsurpassed, and French Hospital will now be able to provide that for our patients,” he said. “This partnership will help us to continue to ensure our patients receive the very best quality care, service and safety.”
Under California law, hospitals can’t employ physicians directly, so physicians at the center now contract their services to French Hospital. San Luis Diagnostic patients will now receive two bills: one from the physician and one from French Hospital.
Both Iftiniuk and Vernacchia said the two entities had been discussing the purchase for about five years, with the final negotiations proceeding over the last several months. Vernacchia said the increasing costs and administrative demands required under federal health-care reform had been a prime motivator for the sale.
Individual medical practices across the country have made similar decisions since the rollout of the federal Affordable Care Act, which offers financial incentives for providers to consolidate into larger medical networks. Requirements to move to electronic health records and increase reporting of patient outcomes, as well as changing Medicare fee structures, have also contributed to the trend.
“There are so many more administrative demands put on health-care deliverers that are too difficult for individual providers to keep up with,” Vernacchia said. “What attracted me to Dignity Health as a partner is their management style, which is bottom-up instead of top-down. It’s a management style that distinguishes Dignity Health.”
San Luis Diagnostic provides an array of imaging and related services, including CT scans, MRIs, ultrasound, digital mammography, bone density analysis, virtual colonoscopy, MRI-guided biopsy, needle biopsies and total body and heart screenings. It had about 38,000 patient visits last year, Vernacchia said.
Dignity Health owns three hospitals in the region — French Hospital in San Luis Obispo, Arroyo Grande Community Hospital and Marian Regional Medical Center in Santa Maria. It also has been adding outpatient imaging centers and now owns four in Santa Maria, one in Pismo Beach and San Luis Diagnostic.
The U.S. Food and Drug Administration issued an advisory last week that the Pismo Beach center, Coastal Diagnostic Center, lost its certification to legally provide mammograms after an investigation found that center failed to meet some quality standards. Officials at that center said Thursday they are working with federal regulators to resolve the problem and regain certification. In the meantime, the center may still perform ultrasounds.