Entrepreneurs Want Business and Medicine Separate for Rural Clinics

Currently, clinics must be owned by doctors to operate in Oregon, which creates a barrier for rural areas, where small-staffed doctor’s offices and clinics require doctors to divide too much time between practicing medicine and running a successful business.

Rural Oregon faces a healthcare shortage, which despite numerous attempts at a governmental fix with loan repayments, rural scholarship programs and a controversial and generous tax credit to rural providers, just seems to becoming worse.

Two young entrepreneurs think they have a partial solution. Currently, a country doctor not only practices medicine, but he or she has to run a business. To protect business people from interfering with medical decisions, nearly all Oregon clinics must be majority-owned by physicians.

The owners of Oakridge’s new Orchid Health Clinic, Oliver Alexander and Orion Falvey, want to separate the two -- leave medical decisions at rural clinics and doctor’s offices to medical providers, but leave the business side of running a clinic, and the mountains of insurance paperwork and government red-tape to be managed by business people, like themselves.

Alexander and Falvey asked the Senate Health Committee to pass Senate Bill 880, which they drafted with Sen. Floyd Prozanski, D-Eugene. It would allow rural health clinics, governed by federal law, and overseen by the Oregon Office of Rural Health, to be exempt from the law requiring physician ownership.

They came to Salem on Wednesday without the aid of a lobbyist, but their concept quickly took a shine from Sen. Laurie Monnes Anderson, D-Gresham: “I like a model that increases access. They are in an area where physicians don’t want to go. I would really love to move this bill.”

Last legislative session, the mountain town of Oakridge, 45 miles from its county seat, Eugene, was down to just one primary care provider, and no dentists, despite a population of 3,320.

Since then, Alexander and Falvey opened the Orchid Health Clinic as a pilot project in a former clinic, with a medical director, a part-time doctor, a nurse practitioner, a nurse and two mental health therapists. Their business is set up to have no influence on their providers’ decisions about patient care.

They met as business students at the University of Oregon, and conceived of their rural health clinic model as part of a contest at the university. They run their clinic according to many of the progressive payment structures that the Oregon Health Policy Board has promoted, based on quality care outcomes and a global capitated, per-member budget, rather than getting paid by the number of services they provide. Many of their patients receive Medicaid through Trillium Community Health Plan, which welcomes their service.

The city of Oakridge also assisted with start-up funding. The town has been trying to attract new industry to replace its shuttered sawmills, but without sufficient medical facilities, it’s been at a disadvantage.

Dental care is still not offered in Oakridge on a regular basis, but Alexander told The Lund Report that Rep. Cedric Hayden, R-Cottage Grove, a dentist, has run a free mobile dental clinic outside their clinic on several occasions. Orchid is working on a way to support and recruit a full-time dentist.

Additionally, Alexander and Falvey have found 22 rural Oregon towns that could use a clinic like Orchid, but it would be much easier if they could own their clinics outright. A Eugene doctor signed on as the silent partner to the Oakridge clinic to get them off the ground, but isn’t interested in taking on the added liability of two dozen clinics across the state.

The Oregon law that requires rural doctors to not only practice medicine but run a business puts rural areas at a distinct disadvantage compared to urban areas, where larger clinics can hire more staff and delegate responsibilities. Sharp business skills and skilled medical training don’t always coincide, and a medical business is particularly hard to run, given the hours spent on complicated business arrangements working with insurance companies.

Falvey told the committee that Orchid had taken full advantage of some programs offered by the Office of Rural Health to get assistance for its providers, but other clinics they had spoken to were less likely to participate because they were already swamped with work.

SB 880 did attract some concerns from the Oregon Medical Association about removing the inherent protections that are assumed when a clinic is run by a licensed physician, but after talking with their lobbyists, Alexander believe OMA’s concerns could be addressed, and the medical association is supportive of attempts to expand access -- particularly in rural areas where most providers are hard-pressed to work.

The Oregon Nurses Association’s Jenn Baker also testified, but her organization merely wanted a policy to be added to the legislation so nurse practitioners would count as physicians to meet the physician-ownership requirements in both urban and rural areas.

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