I recently connected with an MD who started a low-income clinic (community health center) in a less wealthy part of Portland, Oregon. He made it a point to call it a CHC and not a clinic because they don’t just offer medical care but are trying to provide counseling, prevention, and therapy.
For the purposes of this post, I’ll refer to it as a clinic and share with the reader what all went into starting such a resource for the community, some costs, and obstacles.
Dr. Bob first practiced in Canada and was the residency coordinator there as an Internal Medicine doctor. He then decided to move with his wife to Portland, Oregon and practiced in a small private group.
He kept wanting to offer more low-cost services to the population while his partners were focused on profits. That’s why he set out on his own to start a low-income clinic.
He had to downsize a decade ago to achieve this. By that time his kids were out of the house and him and his wife sold their 5-acre home and moved to the poor part of town and rented a tiny house which converted into a clinic.
He wanted to serve the community by practicing Primary Care and focusing on education, counseling, and prevention.
During the same time Dr. Bob’s church got behind him and in essence sponsored his vision to help this community.
This is where the story turns a little churchy and I won’t focus on that too much because I’m not about organized religion. Kudos to him but it’s exhausting when someone is trying to push their ideas on you.
His vision has been to involve his church in funneling volunteers to help run this clinic with him as the backbone. This has been an incredibly successful partnership for him.
Over the past 11 years he has accumulated volunteers who are full-time staff of the back-office, front-office, an executive director, and even a couple of volunteer physicians and NP’s.
He only has 1 NP who is in a paid position.
The clinic is run out of a house that has been remodeled into a clinic. He has a 501c non-profit designation which allows him to avoid property taxes on the adjacent lot that his clinic owns.
There are other 501c advantages which are too numerous to list here but I learned a lot from talking to his executive director who shared with me the pro’s and con’s of this option.
He has had most of the equipment donated from various sources and as I mentioned, the labor to run the clinic is 90% volunteer based.
There are 2 exam rooms, one therapy room, and a diabetic group teaching room.
There is a front office with a check-in person, a back office person, and an MA who does the blood draws and vitals the patients.
Each provider work 8am-5pm and sees 1 patient per hour.
Over the 11 years that they have been in this community, they have developed a patient panel of 1,200.
Their wait times are incredibly short and patient satisfaction is high.
Most patients are older with multiple medical problems. Psychiatric problems are common and drug seeking behavior or disruptive behavior is common.
These are often patients that the larger medical groups will kick out of their medical group because of disruptive behavior or medication diversion.
The exact income numbers don’t matter but the executive director shared with me that they collect an average copay of $18 per patient. This doesn’t include the reimbursement by Medicaid or Medicare.
Those who cannot pay will be asked to volunteer their time in the community. So they have another 500 hours of time that they fill per year with community work.
Income also comes from billing which has been a problem. The clinicians aren’t good at billing and so a lot of money is left on the table especially since these are 1-hour long appointments.
There are 2 main Medicaid payers for this clinic site and they pay somewhere around 60-80% of private insurance reimbursement rates. If a private insurance would reimburse a doctor $100 for the office visit, then these Medicaid payers would pay $60-$80 which is pretty decent.
Dr. Bob is a wonderfully positive man and it was really nice sitting down with him over some shitty Mexican food and hearing about his journey in starting this clinic.
He loves the work and he actually volunteers several times a month in various other community health outreach programs. The dude is 70 and has more energy than I do.
When he wasn’t busy converting me to Christianity he was telling me that he was recognizing some problems with Nurse Practitioners and Physician Assistants taking on so much of the primary care work.
He believes that these affiliate clinicians or mid-levels, as he calls them, don’t have the breadth of experience to really address all the health care nuances of a patient. He feels that Primary Care is different from other specialties where you need to be very integrative in your approach.
His next gripe was with the naturopaths who are able to bill the same as physician in Oregon and therefore are also taking up quite a bit of the Primary Care market. He wasn’t specific about what he thought was wrong with naturopaths.
The Business Model of A Non-Profit FQHC
Apparently it’s a big deal to obtain an FQHC designation. I’ll have to research that further but it does have to do with Medicare and Medicaid reimbursement.
I can already imagine the kind of micromanaging that must go on when you’re an FQHC. You have to abide by board decisions and do things a certain way to maintain your status.
The same is true for the non-profit model. Again, you must have a board to whom you answer to. And your financial books have to be 100% transparent. That’s how you can find out if there are shady organizations such as the ABMS.
I was told by the executive director that running a low-income for-profit clinic is a major money pit. He shared this with me from his various experiences at other such medical groups.
However, it was interesting to learn that all the major multi-million dollar non-profit community health centers are minimizing their brick and mortar footprint and transitioning to integrate more technology which I am guessing includes telemedicine.
My Take On Non-Profit Clinics
Practicing medicine is already hard enough because we have to abide by our state’s licensing bodies. I’ve shared with you guys my ongoing ordeal with Oregon medical board.
By becoming a non-profit, a clinic will have even more regulations to deal with. However, this comes with some financial help as well in form of possible grants and tax benefits.
Could a for-profit clinic or CHC be more effective and efficient than its non-profit counterpart? It would certainly allow a lot more flexibility when it comes to designing and redesigning a business model.
I’ve written a couple of Urgent Care business plans and keep tweaking it should the day come that I’m ready to run my own clinic.