WALNUT CREEK -- UC San Francisco Medical Center and John Muir Health are teaming up to form a regional health care network, with the goal of providing "better health care, at lower costs," the agencies announced Tuesday.

In a joint news release, the two health care providers said they would remain independent but would equally own and operate a new company, which would serve as a funding vehicle for joint initiatives, including the health care network. The new network, or "accountable care organization (ACO)," would lower health care benefit premiums by providing "the right care at the right time and in the most appropriate setting, whether that is the primary care physician's office, an outpatient center or a hospital," according to the news release.

John Muir operates two of the largest medical centers in Contra Costa County, in Walnut Creek and Concord, and has 900 physicians in its network.

According to experts, ACOs are growing in popularity throughout the nation and the Bay Area.

"This is not a surprising development," said Stephen Shortell, a professor at UC Berkeley's School of Public Health, and an expert on health-delivery systems.

"The idea behind accountable care organizations is to be collectively accountable for cost and quality of care for a group of patients," he said, adding that he found the development promising because, when implemented well, these systems foster quality care.


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George Sauter, chief strategy officer at John Muir Health, said there are still a number of steps to take, including approval of a contract and business plan, before the joint venture is finalized. But, he said, should all go as planned, other health care providers may be involved.

"We've been planning for the last several months with a number of other entities that are likely to participate," said Sauter, who would not elaborate on which providers at this time.

In part, Sauter said, the impetus behind the collaboration is competition. "You're seeing other competitors creating regional networks," he said. "Kaiser (Permanente) has had one for a long time, and Sutter is getting increasingly active in this area."

If formed, this ACO would be the largest such collaboration for John Muir Health, and would allow more employers to offer its services, Sauter said.

Both John Muir Health and UCSF Medical Center are currently operating ACOs in the area, but Sauter said those, like the ones offered to teachers in Walnut Creek or employees in San Francisco, tend to be localized.

"We think the first thing you'll see is we'll get organized to deliver better care, more consistent care, and when we reduce our costs, we're going to be able to reflect that in terms of lower premiums to our customers," Sauter said.

UCSF Medical Center is a self-supported, academic medical center at UC San Francisco. John Muir Health is a not-for-profit organization serving residents in Contra Costa, eastern Alameda and southern Solano counties.

A final agreement is expected by the end of this year.

Contact Jennifer Baires at 925-943-8378. Follow her at Twitter.com/@JenniferBaires.