Issue link: https://beckershealthcare.uberflip.com/i/1546376
10 QUALITY IMPROVEMENT & MEASUREMENT How UC San Diego Health created a new health system to solve its capacity crunch By Alan Condon W hen University of California San Diego Health leaders looked ahead, they saw a problem that couldn't be solved simply by adding more patients or expanding existing programs. "We don't have any more capacity," UC San Diego Health CEO Patty Maysent told Becker's. e academic health system's flagship campuses in La Jolla and Hillcrest, Calif., are effectively full, even as demand for complex services such as cancer care, cardiovascular surgery and neurosurgery continues to climb. Meanwhile, public community health systems across the country are grappling with mounting financial pressures, workforce shortages and the need for greater specialty care access. ose two realities helped shape an uncommon solution. On July 1, University of California San Diego Health and Escondido, Calif.-based Palomar Health finalized a joint powers authority, creating a new health system called Palomar UC San Diego Health. Rather than pursuing a traditional acquisition or merger, the health systems established a new public entity designed to combine Palomar Health's community hospitals with UC San Diego Health's academic expertise while allowing both organizations to maintain separate licenses and medical staff. "Palomar UC San Diego Health creates a new blueprint for healthcare in California," Ms. Maysent said. "is new system, focused on North San Diego County, will grow and enhance healthcare services while offering increased access to advanced specialty care, close to home." Why a JPA, and not a straight acquisition JPAs are relatively rare in healthcare but are commonly used by California public agencies to jointly operate services. Unlike a traditional acquisition, the JPA creates an entirely new legal entity jointly governed by both organizations. Palomar Health's assets and liabilities will move in two phases into the authority, while UC San Diego Health and Palomar Health each appoint three members to a six-person governing board. e structure also preserves characteristics unique to public health districts that could be lost under a conventional acquisition. "e JPA is primarily a public-to-public vehicle," Ms. Maysent said. "Part of what we're trying to solve is how a public university can partner with community public health systems that are struggling to support and sustain them without losing the unique value that the community health system brings." at includes preserving the district's tax base, local governance and flexibility while leveraging the clinical, operational and financial capabilities of an academic medical center. "All of the assets and debt from Palomar Health in this regard will move into this JPA, and then we govern it together," she said. "e JPA allows us to bring the benefits that we have as a public university to this public health district to create a synergy that makes them more sustainable in the long term." e partnership also follows years of collaboration between the organizations. In March 2025, Palomar Health borrowed $20 million from UC San Diego Health to continue providing patient care. Later that year, the health systems entered exclusive discussions to create the JPA. Under the new arrangement, former Palomar Health CEO Diane Hansen now serves as CEO of the JPA alongside oversight from Ms. Maysent and the joint governing board. Cancer, cardiovascular care and access closer to home e partnership addresses two different challenges with one strategy. For Palomar Health, it brings expanded specialty care, operational support and financial expertise. For UC San Diego Health, it creates room to grow. "e problem that UC San Diego Health was trying to solve is that we don't have any more capacity," Ms. Maysent said. "We're really capacity constrained." She said demand for destination services continues to outpace available space across the health system's existing campuses. "e more we try to grow our destination services — whether it's cancer, cardiothoracic surgery, neurosurgery, trauma or maternal- fetal medicine — we're kind of landlocked in La Jolla." Rather than constructing entirely new hospitals, which Ms. Maysent described as difficult and expensive in California, the partnership enables UC San Diego Health to expand advanced clinical programs through Palomar Health's existing facilities. Image Credit: UC San Diego Health