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Health commission recommends Board of Supervisors accept Vizient shares resulting from UHC merger
Summary
The commission unanimously voted to recommend that the Board of Supervisors accept shares distributed to the citys public hospitals under the University Health Consortiums merger into Vizient; staff said the shares are closely held, not currently tradable, and would be held in trust by the treasurer.
Greg Wagner, chief financial officer, explained a resolution asking the commission to recommend the Board of Supervisors accept shares distributed to former University Health Consortium members after UHCs merger into Vizient. Wagner said the city uses a group purchasing organization for medical supplies and that the merger changed the corporate structure, resulting in an ownership-distribution model under a new private company, Vizient.
City Attorneys Office representative Arnolfo Medina told commissioners par value is "basically a dollar per share" and that the shares have no current cash value to the city unless the Vizient board votes to redeem them; he offered a current estimated notional value of about $320 per share. Wagner and the city attorney said the shares would be held in trust by the treasurer and that they have been vetted by the treasurer-tax-collector and city attorneys offices.
A commissioner moved to accept the recommendation to send the resolution to the Board of Supervisors; the motion was seconded and the commission voted to pass the recommendation unanimously.
Staff noted the action is procedural (a recommendation to the Board of Supervisors) and that any future budget implications (for example, membership fee changes under Vizients model) would be handled through appropriation and budget modification processes.
