Greenlick Kills Rural Medical Clinic Bill over Concerns with For-Profit Model

Rep. Mitch Greenlick, D-Portland, has spiked Senate Bill 880, which would have cleared the way for more rural medical clinics owned by non-physicians, telling The Lund Report he was worried about opening a new outlet for profit-making ventures.

“I know some of my colleagues are not happy with me. It’s symbolically a huge step forward,” Greenlick said. “They want to create an entrepreneurship out of rural medicine. I think that’s the problem.”

SB 880 was put forward by two recent graduates of the University of Oregon Business School who have opened Orchid Health in Oakridge, a mountain town that’s 45 miles southeast of Eugene and a case study in poor access in a rural area.

Two osteopathic physician’s offices closed in the past decade in Oakridge, leaving just one physician assistant to attend to a town of 3,500 people.

Orion Falvey and Oliver Alexander opened their clinic, quickly achieving full capacity, but had to find a Eugene physician to sign on as the silent owner because Oregon requires for-profit corporations to have a majority physician ownership.

SB 880 would have eliminated that provision for rural medical clinics, if the clinic’s medical director had total control over decision-making.

As a scholar, Greenlick wrote an academic paper in the 1980s on the very subject of for-profit versus non-profit health facilities, offering a sociological perspective. It concluded that while nonprofits can have their shortcomings, for-profit models have shown inherent conflicts of interest that do not align with good patient care. He has a doctorate in medical care organization from the University of Michigan and has retained a position as professor emeritus at the Oregon Health & Science University.

In the paper, which was compiled in the book “In Sickness and In Health: The Mission of Voluntary Health Care Institutions,” Greenlick pointed to examples of interference in best medical practices at for-profit hospitals. While much of the country has gone to a profit-based model for delivering healthcare, Oregon is among 25 states that require physician ownership of for-profit clinics, and has only two for-profit hospitals.

That hasn’t meant Oregon’s non-profit hospitals have been beyond reproach. The top executives at Oregon’s major hospitals draw multimillion-dollar salaries and several Portland-area hospitals, including OHSU, have been accused of pressuring doctors to refer only to physical therapists and radiologists inside their systems, where their hospitals have a financial interest.

“Nonprofits often act badly, but the inherent structure isn’t about the immediate stock value,” he added. “We can at least take a look at their non-profit status.” Greenlick said that Orchid could find a way to work within the current law as they did in Oakridge -- establish a physician as owner of the clinic, and act as owners of the management company.

Maintaining a Firewall

Falvey reiterated that he and his business partner have no say in the medical decisions at their clinic, and a medical director has complete autonomy, a firewall that they intended to retain in SB 880. He said the payment structure Orchid had worked out with Trillium Community Health Plan and other health insurers aligned their profits with patient care by rewarding them for quality of care.

Orchid plans to open clinics in two dozen communities, but the hurdles made the Oakridge clinic burdensome to open, and they were unsure how easily it would be to find physician partners further afield.

Robert Duehmig of the Office of Rural Health said there are currently 77 certified rural health clinics, and a mix of for-profit and non-profit setups. Falvey estimated about half were for-profit.

Falvey said non-profit and for-profit clinics had their tradeoffs. A for-profit clinic attracts investors while non-profit clinics are eligible for grants. Communities can receive federal start-up funding for federally qualified health centers, but Falvey told The Lund Report those clinics were barely viable in the remote areas that interested them. “In my mind, it would be slightly less sustainable,” he said.

Entrepreneurial ownership over doctor-ownership had a particular advantage in these marginal areas by allowing a physician or nurse practitioner to spend all their time practicing medicine, while the business owners took care of the increasingly complicated medical management. “[Country doctors] don’t have the time to stay current with new technology and ideas,” he said.

NP Ownership of Clinics

The issue of physician ownership of professional corporations practicing medicine is likely to return in 2016. The Oregon Nurses Association considered an amendment in SB 880 to allow nurse practitioners to be the equivalent a physicians at the ownership table, but ultimately withdrew their request because of technical parliamentary difficulties.

Nurse practitioners can run medical offices, but in response to a complaint to the Oregon Medical Board, Attorney General John Kroger opined in 2010 that nurse practitioners could not count as doctors in professional medical corporations because they practice nursing, not medicine.

Falvey said that if Orchid had the ability to partner with a nurse practitioner, it would increase their options but such a professional might not be any easier to find than a physician.

Sarah Baessler, a lobbyist for the nurses association, said the Oregon Medical Association, which expressed concerns with SB 880, would negotiate potential legislation for the 2016 session with her union, as well as other potential stakeholders such as Orchid Health.

“It’s too complicated to fix in that bill,” Baessler said. “We want to make sure it’s right without problems for anyone.”