- Associated Press - Saturday, October 11, 2014

ANCHORAGE, Alaska (AP) - Alaska Regional Hospital has plans to acquire an Anchorage clinic that has relied on state money to cover its bills.

The facility, Alaska Medicare Clinic, operates under an unusual business model, treating only patients 65 and older who carry Medicare — federal health insurance shunned by many doctors who protest that its reimbursement rates are set too low.

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But Dr. George Rhyneer, the retired cardiologist who spearheaded the clinic’s creation, calculated that with the right mix of registered nurses, medical aides and patients, a Medicare-only primary care hub in South Anchorage could succeed.

Alaska Medicare Clinic opened in 2011 in a leased building on Old Seward Highway near O’Malley Road. Now, more than three years later, Rhyneer underscored one lesson he says he learned since the opening: “You can’t make a living seeing Medicare patients.”

“(The clinic) lost money,” he said. “It’s still losing money at a very magnificent pace. Basically, Medicare pays about half the cost for Medicare patients to be taken care of.”

To keep the clinic afloat, Alaska Regional Hospital will take ownership Nov. 1. It will offset losses incurred at the clinic with revenue streams from the larger hospital network, said Julie Taylor, the hospital’s chief executive officer.

Under the clinic’s original plan, Rhyneer said, he intended to break even each year. The clinic, set up as a nonprofit, would hold down costs by sending patients first to teams of registered nurses and medical aides, while one doctor made final medical decisions. The doctor would see about 45 patients a day, double the number most primary care doctors treat, Rhyneer said.

But the patients who traveled to the clinic were sicker than he expected. The clinic brought on a second doctor, and together the two physicians could treat only about 40 patients a day, Rhyneer said.

“We thought we’d have much more of a mix of healthy and sick,” he said. “Healthy people can be seen relatively quickly, sick people take longer.”

The clinic turned to the Legislature for help. The state appropriated $1 million to the clinic in fiscal year 2011 to help with startup costs. Two years later, the Legislature gave the clinic $750,000, and then in fiscal year 2014 another $200,000, according to the state’s Legislative Finance Division.

“This year, had we not been able to sell, we would have needed an additional $800,000 to keep the lights on,” Rhyneer said.

He said about 50 percent of the price clinics charge for medical services pays for overhead costs while the other half pays the physician. Since Medicare only covers about half the bill, doctors often lose out on pay, he said.

Dr. Noah Laufer of Medical Park Family Care estimated that physicians at the practice off East Northern Lights Boulevard must pay about $110 per Medicare visit. The clinic currently accepts some Medicare patients.

“Medicare has always been a significant financial sacrifice for us,” Laufer wrote in an email.

Taylor said she expects the Alaska Medicare Clinic to come with a total operating loss of about $1.2 million a year. The hospital will pay about $300,000 for the clinic’s fixed assets like furniture and desks.

“I think it would be a bad thing if this clinic wasn’t available to the community,” Taylor said. “So it was our way of doing our part for a population that is only going to continue to grow.”

In Alaska, just over 77,000 people are insured through Medicare in 2014, according to Judith Bendersky with the Alaska Department of Health and Social Services. That number grows by about 7 percent each year, said William Streur, commissioner of the state health department.

Assuming the clinic also means that Alaska Regional will have access to a broader patient base. Taylor said she hopes to earn the trust of the clinic’s patients so that when they need care, they will choose the hospital.

Roughly 1,600 patients regularly visit the Alaska Medicare Clinic. New patients must wait about four weeks to see a doctor, said Kirsten Gurley, the clinic’s executive director.

Not much will change at the clinic once Alaska Regional takes over, except the hospital will hire a third physician to staff the clinic in 2015 and the sign outside will read: “Alaska Regional Senior Health Clinic,” Taylor said.

Providence Alaska Medical Center operates the only other Medicare clinic in Anchorage.

Providence Medical Group Senior Care, which opened in January 2011, serves about 4,000 people, treating about 65 patients each day, Mikal Canfield, a hospital spokesperson, wrote in an email.

Unlike the South Anchorage clinic, it treats patients 55 and older, Canfield said.

Both clinics emerged at a time in 2011 when new Medicare patients in Anchorage had few options for primary care, said Rita Hatch, a Medicare specialist at the Older Persons Action Group, a nonprofit Anchorage-based membership group established in 1978.

“I did have a list of some doctors who still took Medicare for people who would call me looking for a doctor, but they all slowly disappeared,” Hatch said. “I really struggled to find Medicare clinics for my people, so I was really glad when those two clinics opened.”


Information from: Alaska Dispatch News, https://www.adn.com



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