Two San Diego health systems are joining forces. Palomar Health and UC San Diego Health have officially completed an agreement to form a joint powers authority (JPA), creating a new regional health system called Palomar UC San Diego Health. The new system will serve nearly one million people in North San Diego County, combining community-based and academic healthcare under one unified governance structure.
Two San Diego health systems are joining forces. Palomar Health and UC San Diego Health have officially completed an agreement to form a joint powers authority (JPA), launching a new regional health system called Palomar UC San Diego Health. The system will serve nearly one million residents across North San Diego County, blending the strengths of a community-based health system with those of a major academic medical center under a single governance structure.
The move comes after Palomar Health faced serious financial headwinds, including a $165 million operating loss in fiscal year 2024 and a forbearance agreement with lenders tied to over $700 million in revenue bonds. UC San Diego Health has already loaned Palomar $40 million and will contribute an additional $160 million to the JPA for improvements. Both systems will maintain separate licenses and independent medical staffs.
By the Numbers:
Why it matters: This merger offers a potential blueprint for how financially struggling community health systems can stabilize by partnering with academic medical centers — expanding access to specialized care while preserving local services.
