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It is anticipated that population growth within the county and a promotional solicitation to neighboring counties will net the clinic 439 new patients over the next 12 to 18 months. An aggressive follow up program to encourage existing patients to better monitor their medical conditions will result in an increase of 1650 patient visits per year. The revenue expected from the marketing elements of the plan is an additional $252,000 per year. A proforma operating statement reflecting this marketing effort can be found in Appendix 4.
By achieving the near term goals and economic efficiencies, the clinic will be positioned for the next step in the evolution of health care in Wahkiakum County.
Physical Limitations
The current clinic is a single story building of 3,100 square feet. It contains the front office, two clinician offices, a lab, x-ray, waiting room and six exam rooms. The building, as it exists, is inadequate for execution of our strategic plan for the clinic. Our plan calls for the clinic to generate increased revenues to achieve financial stability. The proforma illustrates the need for the use of four clinicians to reach the revenue goals that will bring profitability to the clinic.
To maximize their productivity, each clinician needs the use of three exam rooms. The current clinic with its six exam rooms will only effectively support the work of two clinicians at any given time. A two clinician model, even with extended clinic hours, will not produce sufficient revenue nor will it satisfactorily serve the needs of the current patient base.
Additional exam room capacity must be secured if our strategy for the clinic is to be successful. There are no suitable buildings in proximity to the clinic that would serve to increase the number of exam rooms. There are also no existing buildings in either Cathlamet or the County that could accommodate a clinic of sufficient size to execute the plan.
The Clinic Advisory Board believes the simplest solution to the space problem is to increase the size of the existing building by adding a 1,500 square foot addition. There is sufficient space on the present lot to build a structure that would house the relocated waiting room, reception and clinician offices. The addition would permit the conversion of the present offices and waiting room into five additional exam rooms. This would bring the total number of exam rooms to eleven and would fully support the productivity and revenue goal of the strategic plan. A floor plan of the proposed changes is presented in Appendix 5.
It is estimated that an addition of 1,500 square feet to the existing structure and the modification of the interior space to create the new exam rooms would cost $250,000.
This amount is not available from the County, so a source of funds must be found elsewhere.
The Clinic requires a Governing Body that has the expertise and background to help oversee the Clinic’s performance, help the Clinic with external relationships, and report to the Board of County Commissioners.
After founding in the 1950’s, the Clinic was governed by its’ owner-doctors who made all decisions regarding operation of the business including how much to charge for services provided to clients.
As the Federal Government expanded Medicare and Medicaid, the Clinic and all health care providers received mandates regarding the amount to be charged for each service and product provided to clients of the government and were required to sign binding contracts with the government in order to serve these clients.
Soon the payments allowed began to fall short of the cost of providing the services and private insurance companies copied the government practice of specifying dollar amounts paid for each service or be faced with paying the shortfalls in cost from the government program.
The clinic was faced with inventing a new business model for profitable operation within the squeeze or with going out of business. Our clinic opted to become part of PeaceHealth Group in an attempt to merge into a sustainable operation within a larger business. This lasted until 2005 when PeaceHealth withdrew support due to lack of sustainability. The County government stepped in as a buyer of last resort to keep the clinic open.
After the clinic was acquired by the County in 2005, it was governed by the three members Board of County Commissioners jointly with the doctors at the clinic. The clinic continued to operate at a loss receiving significant subsidies from the county.
In August of 2007, the Commissioners appointed a Clinic Advisory Board to analyze the structure, strategies, and finances of the Clinic and present recommendations to the Commissioners regarding identified improvement opportunities.
The Advisory Board currently is composed of nine independent voting members selected from the community, one non-voting County Commissioner, and three non-voting subject matter experts who are also Clinic employees.
Recommendation
The Clinic Advisory Board has collected facts and data regarding the Clinic and healthcare issues plus a survey of local residents to form the basis for its recommendation.
It is recommended:
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That the current Advisory Board be superseded by a new Board consisting of three independent voting members, the Clinic Medical Director as a voting member and the Business Manager and Clinicians from the Clinic as non-voting members
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That the Clinic be managed by the Clinicians and Business Manager plus other key employees of the Clinic as appropriate, and that they be responsible for all operating decisions of the Clinic.
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That Dr. Janice McClean serve as the leader of the management team
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That the new advisory board focus on business strategies, the business model, business plan, financing, employment decisions, interface with the county government, management support, and other strategic issues.
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That the County Commissioners be responsible for retaining, selling or otherwise disposing of the county interest in the Clinic, and for funding or not funding of the Clinic
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Since the County acquired the Clinic as a temporary action to prevent closure, and desires to privatize the Clinic again, future governance decisions should follow private industry practices more so than standard governmental practices. As an example, operating decisions should be weighted more toward future margin opportunity rather than to budget cost compliance only.
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