A few rural clinics are resolved to stay open

Last summer, the leadership of Anderson Valley Health Center received alarming news. Under the new state budget, they were to lose $350,000 – nearly a third of their revenue. After 33 years, they were confronted with a question: How would they stay open?

"We immediately decided, 'We're going to make this work,' " said Dr. Mark Apfel, the clinic's longtime medical director. "Closing wasn't an option. It would be a devastating blow to the community."

If there are solutions available to clinics grappling with burgeoning need and dwindling finances, they may resemble the efforts taken by this clinic in rural Mendocino County last year.

Every member of the staff took a 10 percent pay cut, which means they are earning less than they were eight years ago. They launched a fundraising campaign, netting $125,000 from individual donors and proceeds from a pinot noir festival sponsored by local wineries. They landed a two-year, $150,000-a-year grant from the Kresge Foundation.

A year later, the clinic remains open.

In an effort to consolidate costs, Apfel said, they're looking at merging some administrative responsibilities with other regional clinics. That plan may give them an added boost: increasing the likelihood they can gain Federally Qualified Health Center status, which would give them access to hundreds of thousands of dollars in additional grants. They previously were denied that status because of their small size, Apfel said.

Rural clinics around the state have been experimenting with other ways to cut costs while maintaining care.

Merging with other clinics is an option many are exploring, said Steve Rousso, of HFS Consultants. In addition, some clinics are staying open on a part-time basis; sharing providers, technology and infrastructure; and using mobile clinics-on-wheels and telemedicine.

In the northeastern corner of the state, Mountain Valleys Health Centers lost $1.2 million of its $7 million budget after last year's state cuts, according to CEO Dave Jones. Mountain Valleys, which has six clinics scattered in Shasta, Lassen and Siskiyou counties, laid off 15 people. It eliminated the position of chief financial officer, contracted out some administrative duties, and has one dentist splitting time between two clinics.

Why didn't the clinic close?

"Not that we didn't consider it; we just didn't do it," Jones said. "We feel an obligation to keep services in all these small towns because it's so difficult to get services anywhere else."

That said, many clinics say they can't absorb more financial hits. Of the clinics that closed last summer, most depended heavily on adult Denti-Cal, a state funding stream that was eliminated.

"Right now, we're on a two-legged stool," said Herrmann Spetzler, CEO of Open Door Community Health Centers in Humboldt. Last year, Open Door closed a dental clinic that had served Arcata since the 1970s.

Until the state budget impasse ends, the government is issuing IOUs to clinics for the Medi-Cal dollars they are owed. Spetzler predicts this will lead to other cutbacks and closures.

"By early October, you will see a major decrease in access to the safety net, because we will no longer be able to make payroll," he said.

Carmela Castellano-Garcia, president and CEO of the California Primary Care Association, said two loan funds are helping some clinics stay open during the impasse. In June, a number of private sector funders and foundations offered $23 million in loans.

On Thursday, the state treasurer's office announced an additional $9 million in loans. Castellano-Garcia said clinics are grateful, but the loan fund is still "a Band-Aid on a huge, gaping hole."

"We feel an obligation to keep services in all these small towns because it's so difficult to get services anywhere else."


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