by JUDY HODGSON
Short question, long answer
You printed a correction in the Aug. 3 issue stating the correct number served by Arcata Family Health Center was 12,000.
I inquired at the Arcata City Hall as to the current population of Arcata and was told it was 17,000. Since Arcata Family Health Center serves approximately 70 percent of the population of Arcata, I find it hard to understand how they could not be financially viable.
Karen Aronson, Arcata
In 1996 St. Joseph Health System-Humboldt County began buying local physician groups throughout the county hoping to improve services and to achieve a cost savings from vertical integration of health care. Although patients still had a choice of hospitals when it came time to have a baby (or gall bladder surgery), the fact is that the physicians in these newly purchased practices began to routinely refer patients to St. Joseph Hospital in Eureka -- not to its two competitors, General Hospital in Eureka and Mad River Community Hospital in Arcata -- if they were not doing so already. (The only other hospital in the county, Redwood Memorial in Fortuna, is part of the St. Joseph system.)
Some of these private physician groups were profitable at the time of purchase; others were not, and St. Joseph officials had hoped the purchase would result in actually saving a practice.
Since that time, according to St. Joseph CEO Mike Purvis in an interview earlier this year, "It is fair to say we have not met our financial goals" with any of the physician groups. (You may recall after acquiring Humboldt Home Health Care, the largest and oldest home health care provider in the county, St. Joseph eventually overhauled that service resulting in layoffs, early retirements and personnel transfers. It was the subject of the Journal cover story, "Home health care in transition," June 24, 1999.) Purvis also confirmed that the health system as a whole operated in the red last year, tracing its financial troubles to cutbacks in federal Medicare reimbursement.
It's important to note that this is a crisis in health care everywhere, especially throughout California, a bellwether state. Sen. Dianne Feinstein, who is visiting Eureka this week to address a group of business leaders, often quotes the following statistic: Since 1996 more than 600 physician practices in California have gone bankrupt or have closed. Several large physician groups in Sonoma County have gone out of business in the last two years. I have heard another statistic (source unknown) that the average income of primary care physicians in California has dropped more than $20,000 per year.
As we reported in March, St. Joseph officials began to divest of some of the practices -- essentially by not renewing contracts at contract renewal time. Eureka Family Practice resumed ownership from St. Joseph earlier this year. Health Care Medical Associates in Eureka and McKinleyville followed suit on Aug. 1. The Center for Women's Health Care in Eureka has another 18 months before its contract with St. Joseph expires.
In terms of large primary care practices, that leaves Arcata Family Health Center. As we reported Aug. 22, Purvis said both the hospital system and the physicians have agreed that "as it is currently structured it is not feasible" to continue the practice.
None of the physicians is willing to comment until more decisions have been made. We have learned from a reliable source that some of the five physicians in the group wanted to "buy back" the practice from St. Joseph, but a unanimous agreement could not be reached. At this time each physician is negotiating separately with other practices in the region -- not necessarily in Arcata. Announcements will likely be made soon. There is an Oct. 15 deadline.
I apologize that this is a long answer to a short question, but it is a very complex issue. The health care crisis has obviously resulted in a financial squeeze on primary care physicians, individuals who are not necessarily entrepreneurs by nature.
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