A clinical diagnosis

When a business has burned through nearly half a million dollars and is still not on track, it is normally time to rethink that particular business model.

This is the case the with the Platte Valley Medical Clinic (Clinic).

Since August 2017 the Clinic has gone through $499,228 in subsidies and more has been requested.

Most of those costs are normal business costs for a clinic. A $5,000 moving allowance and a $10,000 signing bonus are normal in recruiting a new doctor.

Some costs do not make for a sustainable business, however.

Bleeding money

Salary and retention checks that are aimed at maintaining an on-call situation and help subsidize a full-time physician have been distributed. In August of last year a pro-rated salary/retention check was written in the amount of $77,892. In January of 2018 another was written for $102,000.

In July the Corbett Medical Foundation (Foundation) decided to divide these costs into monthly payments of $17,112. Three of these payments have been made.

A $250,000 line of credit, which was fully repaid by the last provider, has now been maxed out. The line of credit has now been pushed to $253,000 and is accruing interest daily. This note will come due in October.

While these developments have been alarming to the Foundation, who raises money to back the Clinic financially, more money has been requested. At the end of August, the Clinic stated they would need an additional $14,388 monthly because revenues have not covered expenses.

Due to these concerns, a significant employee turnover and customer service complaints received, the Saratoga Town Council began discussions about using the only corrective measure available to them—control of the lease to the building the clinic is housed in.

While the council has no further control over what is a private business, given the concerns that had arisen at the Clinic, the council decided a more sustainable business model was a necessity and that discussions to renew their lease with Dr. Kaiser would not be an option.

To highlight the current state of affairs, Will Faust, Saratoga Town Councilman and the town’s Foundation liaison, has recently been contacted by employees at the Clinic who were concerned their paychecks would not be able to be cashed.

In summing up the situation, Faust commented, “From the council’s perspective we have been increasingly nervous about how the business is being run. When we started adding this all up together—this is why we took steps to start looking for fallback options eight months ago.”

While pointing out the Clinic is a private business that can be run however the doctor sees fit, Faust added, “Our responsibility as owners of that building and leaders of town is to make sure that whoever’s occupying that building is going to be able to provide the service that we expect.”

Fallback Plan

Part of the fallback plan the council devised was to contact Ivinson Memorial Hospital in Laramie, Carbon County Memorial Hospital in Rawlins and Health Management Services, LLC (HMS) to see if a partnership with one of these entities could help create a sustainable business.

After vetting and discussions, HMS, who currently operates the Saratoga Care Center, was selected for further negotiations.

HMS also has experience in running nursing homes, clinics and critical access hospitals in rural areas in Wyoming, Montana and North Dakota.

Of the circumstance, Faust said, “If we had not started vetting and doing the background checks and looking at other options as a fallback, we would be starting from square one right now—and that scares me.”

Faust continued explaining the vetting process for HMS, “We are prepared for a change. We have somebody we are comfortable with, that we have had vetted by people in the healthcare industry on the inside—people that we know know the industry, know the landscape in Wyoming, know the business of rural healthcare. We have got advisors in several different capacities who are experts in the healthcare field.”

While lease negotiations between the town and HMS are ongoing, and thus are still not open to public purview, Faust and fellow councilman Richard Raymer have commented that the old lease contains flaws that need to be corrected. Incentives and performance measures, including a provision for a full-time doctor, are also being discussed for addition to the lease to help get the town where it needs to be as far as a workable and sustainable healthcare system.

In a conversation about the clinic, local businessman Joe Glode said, “What people forget is that it took 10 years to find a doctor that fit the Valley between Dr. Corbett and Dr. Lunt.”

The problem has been that it is increasingly hard for doctors to both run a business and provide care.

Faust said, “The model we are moving to will put the business side of the clinic under experienced professional management while freeing up the providers to focus solely on the patient.”

A brighter future

While the Clinic will hopefully be running efficiently in the near-term, HMS is also looking even farther into the future. Mark Pesognelli, administrator at the Saratoga Care Center, informed the Sun that a meeting to discuss a Critical Access Hospital (CAH) was to be held September 10 at the Hotel Wolf. The current steering committee was to discuss forming a board and steps for making the CAH a 501(c)(3) corporation.

According to Pesognelli a CAH is up to a 25-bed hospital of which as many as 20 beds may be designated as swing beds. This type of hospital is required to have an emergency room that is open 24-hours a day and is fully staffed.

Pesognelli said the timeline for completion of the CAH is set for two-and-a-half years.

After Monday’s closed meeting a press release stated:

For the last decade the people of the North Platte Valley have utilized a healthcare system that reflects a model of healthcare that is no longer sustainable. During that time, we have seen several community physicians come and go, the rapid emergency closure by Deseret of the nursing home and re-opening with Health Management Services, the loss and return of physical and occupational therapy services, and a growing strain caused by the lack of reasonable access to emergency room services. These concerns have worn heavily on our minds and have been present in our community conversations. Under that strain this year we have begun conversations geared toward a new and permanent solution to these problems.

A growing group of community members have gathered from the far reaches of our county. Parents, patients, government officials, healthcare professionals and the like have met for many months. The result of this series of meetings has culminated today September 10th, 2018 to partner together to create a new community Non-Profit that will build in Saratoga, a Critical Access Hospital, that will serve the town and its neighbors at Riverside and Encampment, as well as all of the outlying ranches and families for generations to come.

Will Faust, Board Vice President

Further Issues

Conversations dealing with the Clinic are complicated and include several different entities and individuals. The Saratoga Sun will strive to keep you informed as other issues and topics arise.