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St. Joe's prescription for HumCo's shrinking doc pop

One day in the not-too-distant future, Humboldt County's anemic medical community might be on the operating table, with the area's few remaining doctors trying to figure out how to revive it. According to Dr. Ellen Mahoney, former president of the Humboldt-Del Norte Medical Society, the county will have 40 fewer physicians within the next five to 10 years — that is, unless something is done soon.

In 2006, Mahoney gathered together about 70 health providers, mostly physicians, to brainstorm. That group's recommendations, summarized in a 2006 report by Mahoney, focused on integrating doctors' practices into a large group that would stand on an equal footing with the hospitals, while remaining separate from them. But the project fell through for lack of money.

Now St. Joseph Hospital has proposed a similar course of action. It wants to create a multi-specialty group practice in Humboldt County that will eventually include 40 physicians representing 10 different medical specialties. The proposed practice, which would be run by a nonprofit foundation, combines the expertise of hospital administrators, who handle the financial side of things, with specialists, who, unencumbered by running their own practice, can focus on patients.

But because of St. Joe's track record — a fateful mix of bad business decisions and a sometimes combative attitude toward local physicians — some doctors are wary of letting the hospital take the reins on a project of this magnitude.

On Monday the Journal sat down with Joe Mark, CEO of St. Joseph Hospital. Mark, a solidly built Midwesterner with cleanly trimmed silver hair and a dark suit, explained the multi-specialty group as "primarily a recruitment and retention strategy to keep good doctors here and bring new ones in."

Mark originally moved to Eureka in 2005 from Ohio on what he called "a six month consulting arrangement." He was brought in to clean up St. Joe's mess. The hospital was hemorrhaging money and already heavily in debt as a result of a string of bad business decisions, like buying up doctor's clinics and starting its own radiology center in competition with the already-existing team of local radiologists. Mark is credited with saving the hospital, one of 14 in the state run by the Catholic Sisters of Orange. Now, Mark has no plans to leave. He loves it here, and there's a lot of work to be done.

For the moment, setting up the multi-specialty group is high on Mark's list of priorities. There are a lot of small practices in the county, he said, and that means that each of them carries a lot of overhead. That's why, according to him, "there's really no economy of scale." Which is where the hospital-affiliated foundation can help. It will effectively buy up doctors' assets and subsidize their practices. Once a part of the group, the doctors will run it, 50-50, with the foundation.

As for recruiting, the multi-specialty group can offer trainees, who typically leave residency with $100,000-$200,000 in debt, what they're looking for in a competitive market: a steady stream of income, someone to do their billing for them and reasonable hours.

Mark hopes some nascent form of the multi-specialty group will be up and running as early as next summer.

"The devil is in the details," said neurosurgeon John Aryanpur, who joined the hospital as a contracting doctor two months ago after almost 14 years in private practice. If it hadn't been for St. Joe's, Aryanpur probably would have ended up leaving the area and that would have been a real headache for county residents.

"The potential drawbacks [of the multi-specialty group] would be twofold," he said on Monday. "If it's not done carefully it could be competitive with local doctors. Also, physicians who are part of the foundation may not be perceived to be independent."

Mark insists that the multi-specialty group won't present any more competition than what already exists among specialists here. As for doctor independence, he assured that it will be a "a medically-led type clinic."

Aryanpur is a believer, but he recognizes that the hospital has given people reason to be wary in the past. "I believe that the current administration and the current leadership team is a highly ethical and highly conscientious team," he said.

Other doctors are less sanguine in their appraisal of St. Joe's intentions.

Cardiologist David Ploss believes that the hospital is out to "control their market." In short, their proposed multi-specialty group will end up competing with those local doctors who choose not to join. "For the hospital to go out and proactively compete with its referral base is counter-productive," he said on Sunday.

What he would rather see is for St. Joe's to move more slowly, to retain doctors one by one, like they did with Aryanpur, rather than doing it in a "controlling" or "somewhat predatory" way. Ploss believes that the multi-specialty group model is a good one, just not at the expense of the doctors that are already here. Moreover, he thinks that the specialists already practicing in the county are, for the most part, doing just fine without the hospital's help.

"I think that most of us look at this proposal as one where the hospital says, ‘Look, I know you have your own business but we have this great deal for you — you can work for me for less or I'll hire and subsidize people to compete with you,'" Ploss said. "Virtually all of the sub-specialty groups and most of the primary care practices are eager to recruit additional doctors, and I believe can do it more effectively with better quality control than the hospital hiring doctors randomly to the community."

Ploss, who's had a practice in Humboldt for 11 years, doesn't easily forget the past. "My ability to trust St. Joe's motives is low," he said.

In his well-lit office, Mark is more optimistic. "I don't have a historical perspective 'cause I don't know what happened before and why things fell apart," he said. "But what I am confident in is that we're working with people who aren't inventing the wheel."

Mark is referring to C.R. Burke, who runs the foundation model clinics affiliated with St. Jude Medical Center in Fullerton and St. Joseph Hospital in Orange. Until the Humboldt multi-specialty group has 40 doctors, it will piggyback on the Southern California group. "They've done this for 13 years and they've debugged it," he said confidently.

But Dr. David Gans, an internist at Mad River Hospital, doesn't think anything's a sure bet when it comes to St. Joe's. "So far their track record on managing things ... has not been tremendous," he said on Monday. "I don't see St Joe's ultimately behaving differently than it has over the past 10 years."

And that's not Gans' only concern. He sounded disheartened as he explained how dramatically the face of medicine has changed over the past quarter-century. Doctors' salaries have decreased. New doctors leave residency saddled with huge debts. They also consider themselves to be employees, he said, which makes them "less fierce about defending their independence."

Gans feels that the North Coast naturally attracts doctors who want to be seen as "part of this community" rather than yes-men for a hospital.

Still, Ellen Mahoney worries that the problem will not solve itself. And for the sake of the county's health care system, she's putting her faith in St. Joe's — in part because there are no other options at the moment, but also because she believes that the hospital's current administration is interested in a collaborative approach to running the multi-specialty group.

"We have to get past the old competitive mode and suspicions," Mahoney said. "We have to assume the best of everyone. If we go back to the old turf models we're all going to sink together."

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Japhet Weeks

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