After 18 years of operating her northeast Portland primary care clinic, Shelda Holmes decided it would be better to close Hands on Medicine than prop up what she calls the “medical industrial health complex.”
Her story shows the predicament faced by independent primary care clinics, and sheds light on why so many are shutting down or selling out to hospital systems or private equity owned chains — even passionate, devoted providers like Holmes.
“You hear the anthem: ‘We need more primary care providers,’” Holmes, a nurse practitioner, told The Lund Report. “You feel it in your heart. But the obstacles are nearly unsurmountable. We can’t answer the call.”
Research shows that robust primary care can reduce health care spending by treating patients' medical problems before they become more expensive. Holmes’ story spotlights what critics say are worrying trends that are eroding providers’ independence and clinical decision-making while increasingly putting primary care —a service that policymakers want more of — out of reach.
Democratic state Sen. Lew Frederick, whose district includes the clinic, told The Lund Report he was saddened to hear of Hands On Medicine's closure and that Holmes has “done a lot of good work for a lot of folks.”
“It’s not an industrial kind of approach she has had to health care,” Frederick said of Holmes’ clinic. “But she has been struggling because of the way we pay for medical care.”
Hard to fix a shattered model, owner says
Earlier this month, Holmes closed the door on her vision of a clinic where patients were recognized by the receptionist at the front desk, could get a same-day appointment for urgent matters and whose provider was not pressured to rush through discussions of multiple chronic health issues in a matter of minutes. Patients wouldn’t need to lie about how many drinks they had that week, and “people of size” would be free of the shame they might have experienced in other medical settings.
Holmes had broken even with a mix of patients covered by private insurance and the low-income Oregon Health Plan. But Holmes said staying afloat in the post-pandemic health care landscape has become more challenging as wages and other costs soared, reimbursement rates haven’t kept up and insurance companies added administrative hurdles.
“I’m going to be down the road and still not able to see my patients.”
She said she had conversations with investors about selling them her clinic. The prospect of selling out was “shiny” with the possibility of staff getting better pay as well as financial stability for the clinic. But she said the prevailing business model means patients would no longer receive the same care. And that seemed impossible to change.
“How do you fix a glass vase you dropped from the third floor?” she said.
Investors and large health care conglomerates, like UnitedHealth Group, have been rapidly purchasing other independent clinics in Oregon and elsewhere. Oregon lawmakers tried unsuccessfully earlier this year to limit these arrangements and are preparing for another attempt. Holmes spoke up at a recent panel discussion urging action
A look back
On the day before its final closing, the walls at Hands On Medicine were nearly bare. Employees boxed up local artists’ work that had hung from the walls depicting children, abstract images and nature scenes.
Rooms once used for exams or offices were filled with metal exam tables, stools and other supplies waiting to be sold. Other rooms held cardboard boxes filled with printers, books on toddler development and other medical texts and toys that once kept children occupied during visits. Colorful flags the clinic once flew at the front entrance to signal its LGBTQ friendliness and to celebrate Juneteenth were rolled up and tucked in a corner.
Bespectacled and with blue hair highlights, Holmes, 51, recalled what led her to open the clinic in 2006.
At the time, she was married to then-state lawmaker Chip Shields, and had settled in northeast Portland — then still the heart of Portland’s Black community.
She’d been splitting her time working as a nurse practitioner at primary care and reproductive health clinics. She was seeing more than 20 patients a day and found herself frustrated by having to rush through appointments. If providers had more time to develop relationships with patients, she felt, it could lead to better efficiency and improved care.
Holmes frequently rode her bike past an empty building on Vancouver Avenue that had previously been home to a a clinic founded by Mariah Taylor, a Black nurse practitioner celebrated for her commitment to the area’s needy.
Using her own money, Holmes opened Hands On Medicine in the same building in 2006. Holmes and clinic employees were still assembling furniture, she recalled, when someone approached the building with a broken clavicle from a bike accident. The clinic hadn’t even unlocked its doors, but she opened up to help the patient.
Vision came to life
The early years were exhausting, Holmes said. It amounted to being on call for seven years straight, she said, and the new business at first did not make money as she learned how to secure contracts and credentialing with insurance companies.
But the highpoints included patients bringing their diabetes under control, seeing remissions of inflammatory bowel disease, as well as guiding patients through pregnancies then caring for the children, she recalled.
“I couldn’t make soup with stone without changing the model completely.”
Once, the clinic treated a single mother who was acting so erratically that child protective workers were going to take custody of her children because they believed she had a severe mental illness. But providers at the clinic recognized her behavior was caused by an easily treatable thyroid condition, Holmes said.
“It was because she had a relationship with this clinic that we were able to say, ‘We need to look at this right,’” she said.
One grateful patient from the clinic’s early days was Mary Duncan. She told The Lund Report that she had been a patient of Holmes before she started Hands On Medicine.
In 2005, Duncan injured her back while breaking up a dog fight. She told her then-primary care doctor she felt that “something was very, very, very wrong” with her back.
Her doctor, she said, told her to take some ibuprofen and she would be "fine." After months of chiropractic work, her chiropractor sent her in for an x-ray, showing she had two ruptured discs in her neck.
Duncan dropped her doctor and went to a clinic where Holmes was working at the time.
“When I met her, I knew I couldn’t live without her,” Duncan said, describing why she went to Hands On Medicine after it opened. She described Holmes as one of the first providers who made her feel like a “real human being and not just cattle.”
Another patient, Jamie Barnes-Hoyt, told The Lund Report that the clinic’s approach of compassionate listening took the anxiety out of visits, which she said can be a particular problem for “someone who lives in a larger body.”
She said her nurse practitioner there showed a kindness “you don’t always find at a busy clinic.”
Tough to even break even
Hands On Medicine grew as Holmes got a better handle on the business side of the clinic. At its pre-pandemic peak, it had 16 staff that included four nurse practitioners, a naturopath, three mental health providers and the rest working in billing or other support functions.
Before closing, the clinic’s primary care providers would typically see 12 to 14 patients each day, with appointments lasting up to 30 or 45 minutes to give providers enough time, according to Holmes. By contrast, some studies indicate primary care physicians see 20 patients a day on average.
But providing care was the easy part of starting the clinic, Holmes said. The hard part, she said, was breaking even.
That would happen if every patient would show up for their appointment, Holmes said. Due to the precarious finances, some years she paid herself at the end of the year, and she owns a vacation rental and triplex to supplement her income.
“All primary care practices are running on the margin at this point.”
A central problem, explained Holmes, has been getting reimbursements to cover the clinic’s costs, particularly from the Oregon Health Plan, the state’s version of Medicaid.
At one point, 80% of the clinic’s patients were covered by the Oregon Health Plan, a proportion that dropped to 45% before its closure, she said.
“We didn’t turn anyone away,” she said of the clinic’s early days. “And then I realized that I couldn’t actually stay in business.”
Medicaid pays $106 for a 30-minute office visit with a more complex patient who might have diabetes, hypertension and hyperlipidemia, according to Jacob Aiello, the clinic account’s manager. He told The Lund Report that the amount does not cover the cost of the visit, and the clinic has needed patients with better paying insurance to make up for the loss.
But commercial insurance came with problems of its own. Aiello said he has been “amazed” by what he called increasing “obstruction” by insurers. He said some large companies, like UnitedHealthcare, do not have a phone number to call to follow up on claims, instead offering an email address that might be ignored.
Faced with making 'soup with stone'
The clinic had weathered earlier crises including the 2008 financial collapse and the H1N1 flu epidemic. Then came the covid pandemic.
“And I really couldn’t get enough wind in my sail again,” said Holmes.
Health care workers are increasingly scarce and expensive along with other inflationary challenges that she said insurance rates aren’t covering.
So earlier this spring, she made the decision to close.
“I couldn’t make soup with stone without changing the model completely,” she said.
She thought about partially switching to a membership or concierge model that cut out private insurance in favor of a monthly rate. But she said that meant creating a two-tiered system where Medicaid patients could potentially be deprioritized, which she said conflicted with the clinic’s values.
Dr. Deborah Cohen, an Oregon Health & Science University professor of family medicine and vice chair for research, told The Lund Report that the number of patients being seen at the clinic was likely not enough to cover its rent, utilities, staff and other costs, she said.
“One of the reasons why clinics are closing is that there has been a very unattractive business model for primary care,” she said.
Other independent primary care providers are closing or selling clinics for reasons similar to Holmes’, she said. But even the large companies that buy these clinics are struggling to turn a profit. Cohen co-authored a recent paper on how large corporations, including Walmart and CVS, have expanded into primary care but struggled to break even.
Cohen said primary care has suffered from years of underinvestment as specialist providers see higher rates.
“All primary care practices are running on the margin at this point,” she said.
Closing time
On the day before it closed, patients still made their way to their final appointments. They passed by a table partially covered with paper sacks labeled “condom goodie bags.” A homemade paper mache Buzz Lightyear, a patient left at the clinic after being unable to take with them during a cross-country move, still hung from the ceiling in the lobby.
Kim Kelsey, a nurse practitioner at the clinic, told The Lund Report that in the last few months patients and staff have felt like they are grieving a beloved relative who is in hospice
Melanie Anthony, a family nurse practitioner, said many patients told her the clinic is the first health care setting to make them feel safe, and she wonders if they will have the same experience elsewhere. About half of her patients won’t be able to follow her because they are low-income and her new job does not accept Medicaid, she said.
“That’s what is particularly heartbreaking,” she said. “I’m going to be down the road and still not able to see my patients.”
Hands On Medicine is still waiting for payments held up by a hack on the widely used Change Healthcare clearinghouse, Holmes said. Even after closing its doors the clinic will remain a business entity for years to collect outstanding payments, she said. Closing the clinic has turned out to be more expensive than selling it, she said.
Holmes said she plans to volunteer in the coming months while figuring out her next move in health care. She did not know what that will look like exactly, but it won’t involve insurance.
