Physician shortages putting squeeze on quality local healthcare

“The elephant in the room”

On Tuesday, August 16, the Gunnison Valley Health (GVH) board of trustees and the Board of County Commissioners met face to face for the first time since the commissioners denied an $11.3 million senior care center a place on the 2011 ballot.

The GVH board of trustees wants to see the project on the 2012 ballot, but they broadened the conversation to include a myriad of challenges that threaten the Gunnison Valley health care system. Low profit margins, a shortage of family physicians and the cost of implementing medical records technology are all putting the squeeze on quality healthcare.
“We have come to a crossroads as far as the ability of the hospital or the healthcare system to continue to provide healthcare service to the entire community,” said board of trustees chairman Bob Brickman. “We recently lost two primary care physicians, and part of our role is to provide access to health care, and we have reached a point where financially, primary care physicians can barely survive in this environment.”
GVH CEO Randy Phelps confirmed that Gunnison County is short at least two full-time primary care doctors: in recent weeks, two doctors have retired or left the community, and one doctor has reduced hours to one day per week. Primary care clinics in Gunnison have closed their doors to new patients. Historically, family practice clinics have recruited replacement practitioners. But according to Phelps, that trend has changed.
“Over the course of the last decade hospitals have had to shoulder the responsibility for recruitment and replacement because the poor reimbursement from insurance companies and from Medicare and Medicaid have made it economically impossible for the clinics in rural areas to surmount the minimum income required to recruit somebody,” Phelps said.
The compensation for a family practice doctor can range from $200,000 to $250,000 per year. According to Phelps, GVH augments about $100,000 of that cost per doctor because there isn’t enough revenue in a family medical practice here to cover that. Dr. Jay Wolcov of Gunnison Family Medical Center concurred.
“My office has been subsidized by my working in the ER. Given the amount of profit in the family medical center, without the money I was making by working in the ER—that I personally put into my office pot—my office could not have existed,” Dr. Wolcov said.
“I would reiterate everything Jay has said,” added family medicine physician Dr. Lauretta Garren. “The thing that would tend to push things over more than in the past is all the government mandates requiring electronic medical records. The expense of that and of maintaining that… it’s a good idea but it is going to cost us individually, as a practice, a tremendous amount of money.”
Garren added that on top of these financial burdens, medical school graduates are leaving school with so much debt they are unwilling and unable to buy into family practices.
“The new paradigm of how we’re going to stay in business and provide care for everybody is going to take some work,” Garren said.
Phelps confirmed that the estimated cost of implementing medical records technology for the hospital, required by the Affordable Healthcare Act, is about $3 million—and noncompliance is not an option. Hospitals that do not implement medical records technology will see a $14,000 annual drop in Medicare dollars.
Solutions discussed at Tuesday’s meeting included rethinking the local healthcare system, and possibly creating a family clinic under the auspices of GVH. That clinic could contract with local physicians and create financial efficiencies that would benefit everyone. But the groups collectively agreed that is a long-term solution. GVH needs to begin addressing these challenges now.
According to interim treasurer Paul Zuidema, year to date, Gunnison Valley Hospital is operating about $20,000 in the black. That’s just over a 2 percent profit margin.
“Generally hospitals that produce margins of 1 percent to 3 percent are going to underperform, get into trouble and require some sort of intervention,” Zuidema said. “Even small hospitals need to produce a 5 percent to 7 percent bottom line to keep buildings in good condition and to keep primary care accesses open and to keep up with the technology that hospitals have to have.”
He went on to say that a 5 percent to 7 percent bottom line is a benchmark, and many small rural hospitals like GVH need more. According to Phelps, GVH absorbs substantial operating losses every year, including $260,000 for emergency room coverage, $540,000 for emergency call coverage by an orthopedic surgeon and $620,000 for ambulance coverage, which is typically part of a taxing entity like fire protection, but not in Gunnison County.
It was in light of all these challenges that GVH sought to correct operating losses at The Willows, the county’s assisted living facility managed by GVH.
“When you have a nonmedical residential program that has a history of losing probably $100,000 a year, can we realistically continue over the course of the next 10 years to absorb $100,000 loss per year when we could take that money and use it to fulfill our mission?” Phelps asked.
This year has brought a brief reprieve from those operating losses, attributed by senior care center administrator Wade Baker to an increase in the population and a reduction in expenses. But a projected loss of $11,418 is still a loss. The board of trustees believes that current facilities are inadequate for the seniors living in them, and that a new senior center and an expanded assisted living facility would solve both problems. Connecting the two would create a positive cash flow that would allow GVH to assume ownership and operation of The Willows. It was the funding of that $11.3 million project they hoped to take to voters this fall.
“Our objective still remains to complete the facility improvement project,” Wade Baker said. The board of trustees would like to pursue the 2012 ballot. But first, Baker said, he and the board were willing to commit to reengaging experts to confirm population trends, community support and the cost of such a project after waiting for an additional year. He also said they would engage in an education campaign to gain community support for improvements and to meet with county commissioners quarterly to keep them apprised of progress.
Commissioners Paula Swenson and Hap Channell encouraged that community outreach and open communication.
“I’d like to see this outreach and conversation happen before we lock into ‘This is the plan and this is the building we need.’ [The commissioners] made some decisions we thought we had collectively talked to the community about,” Swenson said in reference to the new jail. “We thought we had the best plan out there. We ran it once and then twice and we failed. It was a big learning experience for me that I’m not always right. The more outreach, the more we ask the community for help, collectively we can come up better plan than in isolation.”
The board of trustees is planning a board retreat in September to collectively discuss the issues raised at Tuesday’s meeting, and a November meeting with the county commissioners. But no firm support was given by the commissioners for the 2012 ballot initiative, and other than encouraging open communication, no concrete next steps were defined with the commissioners.
“I’m gong to have to spend a little time digesting,” Channell said. He also urged the board to communicate directly with the commissioners rather than airing grievances in the newspapers, emphasizing the importance of the boards communicating face to face.
“I think one elephant we’re not looking at is the hospital itself—with the new regulations coming down it’s going to have a hard time operating in the black,” said commissioner Phil Chamberland. “I’m wondering if you should go to the public with that in mind. I’ve got some strong feelings the hospital is going to have a harder and harder time maintaining the 2 percent profit margin. I think we need to start thinking collectively about how we’re going to address that. It’s coming down the pike and it’s coming faster than any of us want.”