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When Coastside Family Medical Center in Half Moon Bay suddenly closed its doors, both the insured and the uninsured members of the comunity suffered. The insured had no idea that they were part of the “cause” of the problem; the CFMC was unable to get legal recognition as a clinic for the poor because we, the insured, “ruined it” for our uninsured neighbors by being too prosperous.
I look at this as a microcosm of what could happen in any community any day, so I’m sharing the information below about the economics of running a family practice under today’s health laws. The information was provided by the Half Moon Bay Chamber to its members. It shows where we are as an industrialized nation in making health care accessible to our citizens. Remember, this clinic is 30 miles from a major city.
*The Board of CFMC would like to take this opportunity to clear up som misconceptions.*
The Board of CFMC greatly regrets having to close the clinic and wishes thatwe could have done more to make the transition less painful for both the patients and staff. We are very grateful to the staff that has worked so hard over the years and in this difficult time to provide the best health care possible to Coastside residents. We’re also very appreciative of community members who jumped in and tried to provide positive assistance for those who needed immediate help.
*Why did you have to close the clinic?*
One reason: no more money to fund the shortfall. The financial history is
well known to most. The clinic was founded when Stanford University, after
experiencing a $1.5m annual loss, abruptly closed the doors in 2001. A group of us rallied and formed a non-profit 50( c)3 to run the clinic as it always had been designed serving the insured, uninsured, and underinsured. We experienced a $600,000 loss the first year and had a loss of at least $400,000 each year thereafter.
*How did you keep it open so long?*
We relied on our fundraisers, grants, foundations, and personal
contributions. All of the board were contributors to the clinic. Stanford
Hospital and Mills Peninsula were generous. A small number of individual
donors were extraordinarily generous. The lobby displayed a giving tree and donation box for all those who could contribute and be recognized. Numerous articles were run over the years in the Review pertaining to CFMC’s non-profit status and the challenges of contributions. Every year we sent an appeal to our entire list of past donors and new prospects. Our last annual appeal in November only brought in $18,000 and grant and foundation funding all but dried up in this economy. The clinic ran a $50,000 monthly loss, $70,000 if we had paid the county our rent. The board has always worked on a volunteer basis and the dollar equivalent of the professional work contributed by the board was immense. This was money we did not have to spend.
*Why was it operating at a loss?*
The clinic was a ‘hybrid’ model serving insured and uninsured equally. This was very unique. As a struggling non-profit for eight years trying to meet the needs of all at an equal level of service, the CFMC board grappled with major demographic shifts that changed the mix of patients. More underinsured than insured were now being served which was not reimbursed at the rate of Federally Qualified Health Clinics enjoyed by some facilities. For example, FQHC clinics receive $386 per patient visit and non FQHC clinics (like CFMC) received, between $66 and $77. This does not cover costs. This is why every possible affiliation to try and obtain an FQHC status was explored. FQHC status was not available to the clinic because the community as a whole was too prosperous. The Coastside Family Medical Center hybrid illustrates the inequality of our health system.
*Why did you not give notice?*
The clinic was caught in a ‘perfect storm’ between March 5 and March 11. We had worked with the county to have it either merge with or operate the
clinic to use its FQHC status. We told the county we could only keep the
doors open until mid March and a slight possibility of April 1st. The county concluded on March 5 that application of county pay and benefit scales to the clinic made county status for the clinic unprofitable. At that point the clinic asked for a bridge loan of $300,000. We found out that was not a possibility on Wednesday night, March 11th. Simultaneously a $54,000 check from a major medical organization that was agreed to arrive that week (and unquestionably due and owing) did not come in, and we therefore did not have the funds available to make payroll for Thursday and Friday. Staff had been paid thru Wednesday. We consulted an attorney and determined it would be irresponsible at a minimum and possibly fraudulent conduct for us to keep the doors open knowing we did not have the funds to pay staff and creditors.
*Why did you not let the community know?*
Rumor, panic and disorder are the mortal enemies of negotiations. This was
occurring in 2001 with a much more ‘insured’ patient base when community
volunteers stepped in and Stanford swiftly agreed to hand the clinic over to the community. We had to be careful what we said while negotiating with
other clinics in order to continue to be perceived as a viable partner. We
had survived close calls like this at other times in the clinic’s life. We
were also negotiating to hire three more doctors so the county could have a full staff when they took over. These set of circumstances are regrettable, but cannot be fairly judged in hindsight.
*Why didn’t you ask the community to chip in?*
The community was repeatedly asked through the fundraising. Unless the
community could donate $70,000 per month, the closure was inevitable without the FQHC status. The community in general has been a helpful but frankly small part of our fundraising. The assertion that the community would have done much more this time than it historically did is without foundation in experience. The fundraising histories of Coastside nonprofits, and their results from the community at large, are well known and are entirely consistent with our decision to close.
*Why were the locks changed?*
We were told by counsel the locks must be changed. We are responsible for
everything in the clinic to remain intact as an asset of the court (so
salaries and creditors could be paid) and also to secure the patient
records. Prescription medications were another concern and there could have been legal liability had they not been secured.
*Can we get our records?*
Your records are secure and will be mailed to the requesting doctor when you make your appointment despite the legal debate of protocol going on amongst the attorneys. Further contact information will be relayed via this paper following the appointee of a trustee.
*What next?*
The facility is there. The county could come in and set up a clinic for the uninsured when they realize the impact this will have on San Mateo Medical Center. And, a private practice could use a portion of the space to set up practice for the insured. Hopefully, some of our doctors would remain should that happen. The clinic had to close to make either of these a possibility.
The directors want the community to fully understand how hard and how
emotional this was and how hard we worked to keep the clinic open. We
realize the closing was less than smooth and that many of you are angry.
Please know that all of us deeply regret the ‘perfect storm’ that derailed a timely notification and closure. Please also understand that we did not
cause those events to occur, whether the questionable conclusion of the
county or the unpardonable ethical lapse of the payor that held the check.
We are devastated at the loss of the clinic that we have patronized for up to 30 years and that we worked so hard to keep alive for eight years. We
hope the community will join us in trying to change the health laws thatended our vision after eight productive years.
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