Stanislaus County supervisors approved a recommendation Tuesday night to explore possible outsourcing of health care services for low-income residents.

Speakers at the meeting said employees who run the county-owned clinics in Modesto, Ceres, Turlock and Hughson should have a chance to fix the problems with medical staff shortages and declining patient volume.

They expressed concern that the Valley Family Medicine Residency program could suffer if the clinical services are turned over to an outside organization. Some feared that clinic staff will jump ship, due to uncertainty, as the county tries to find a suitable partner for delivering health care services.

“We can do better than this,” said Samantha Phillips-Bland, a former family planning director for the county Health Services Agency. “There is a long history of excellent care by excellent providers in these county clinics.”

Since 2012, the number of patients receiving primary and specialty care and rehabilitation services from the Health Services Agency clinics has fallen from 47,000 to around 30,000, largely because of problems with recruiting and retaining physicians and nurses, county officials say.

At the same time, the cost of running the clinics has increased, though speakers Tuesday night cast doubt on the latest annual cost figure of more than $1,000 per patient. The Health Services Agency expects to use $1.5 million in fund balance to offset increased staffing and operational costs this year.

Noe Paramo of the California Rural Legal Assistance Foundation said the county has a pattern of shedding health services for the poor and uninsured, starting with the closure of the former Scenic General Hospital in 1997.

He said the legal aid group is opposed to outsourcing of clinical services until more data is available. Any plan to outsource services should ensure better care for residents, Paramo said.

The likely candidates to take over the services are safety-net providers Golden Valley Health Centers and Livingston Community Health, both of which have clinics in Merced and Stanislaus counties.

The county hired Pacific Health Consulting Group in February for a study on health services facility needs and a business strategy going forward. The consultants laid out options for retaining the county health centers, consolidating clinic sites or limiting the county’s role as a direct health services provider. The ultimate goal, the study says, is preserving and expanding services for low-income residents.

A report to the Board of Supervisors said that “other mission-driven safety net providers may be better positioned than HSA to provide sustainable, high quality clinical services in multiple community locations.”

During the study, the consultants talked with 15 “key informants” including local representatives from the health industry and education. Eleven of the 15 people interviewed are white with above-average incomes and no Latinos were interviewed.

Bobbie Wunsch, a founding partner of Pacific Health, said most counties are not direct providers of health care services. Counties are required to provide health care for medically indigent adults, but those patients — about 9,000 in Stanislaus County — were switched over to Medi-Cal with California’s participation in the Affordable Care Act’s Medicaid expansion starting in 2014.

Dr. Mitchell Cohen, who sees patients in the Stanislaus County clinics, said no physicians who work in the clinics were involved with collecting data for the study. Some doctors left the region because they were underpaid, Cohen said. Graduates of the local residency program are no longer guaranteed student loan repayment for working in underserved communities and cost-of-living factors in California cause some to leave the state to practice medicine, Cohen added.

One manager said patient volume was down 200 a month in her clinic when a renovation closed more than half the exam rooms. With the renovation complete, the clinic is now trying to rebuild its numbers, she said.

Other speakers concurred that outsourcing may be good for the county’s checkbook but may not be the best for patients. “I am not willing to work for any organization that provides second-rate care,” said Dr. Peter Gaines, who practices geriatric medicine in the clinics.

Some were concerned that outsourcing would undermine the Valley Family Medicine Residency that uses the county clinics for training new doctors. The program helps alleviate a chronic shortage of primary care physicians in the Northern San Joaquin Valley. Pacific Health said an outsourcing agreement would require an outside provider to take on additional responsibilities for residency rotations in clinics.

Twenty of the 72 residency graduates between 2011 and 2017 stayed in Stanislaus County to practice medicine, but only six went to work in the county health clinics.

Supervisor Terry Withrow said the county will continue working to meet the health care needs of low-income residents but has to explore all the options. “Sometimes we have to ask hard questions and not be afraid of the answers,” he said.

County human resources is looking at ways to maintain clinic staffing as options are considered this year. Supervisors approved other recommendations including relocation of Health Services Agency offices from the Scenic Drive campus to County Center III off Oakdale Road. Some of the former hospital facilities on Scenic suffered extensive water damage from a plumbing failure in 2016.

Other recommendations will focus more attention on mental illness and public education to reduce rates of diabetes, heart disease and other chronic diseases. The county will seek a regional partnership for public laboratory services.

The county will pay Pacific Health up to $85,000 to prepare a request for qualifications and proposals from potential partners for primary care and specialty care services. No one has said whether an outside organization would operate existing county clinics or make other arrangements for delivering services.

Leslie McGowan, chief executive officer of Livingston Community Health, said earlier Tuesday the nonprofit will look carefully at a request for proposals from the county for clinical services.

“I think there are a lot of ideas out there,” McGowan said. “We are really interested in being part of the conversation and part of the solution.”

The nonprofit with a $20 million annual budget and 200 employees has health centers in Livingston, Hilmar, Delhi, Patterson and Waterford. Its clinics offer dental services in addition to primary health care. Clinic appointments are scheduled until 7 or 8 p.m. some days in Livingston and Hilmar.

McGowan said Livingston’s six clinics combined handled 78,000 visits last year compared with the Health Services Agency’s 80,000 primary care visits. Livingston’s chief medical officer, Glen Villanueva, was formerly director of Stanislaus County’s medical office in Ceres.

Livingston would want to work with the current physicians who care for patients at the Stanislaus health clinics, McGowan said. “We would definitely want see continuity of care by keeping those physicians in place,” she said.

Jeffrey Lewis, president of the Legacy Health Endowment in Turlock, said an outsourcing agreement with one or more nonprofits could bring operational efficiency and more services to the county clinics, such as dental care and evening hours.

“The county has reached the point where they are likely frustrated by the costs of operating the clinics and whether the amount they are spending could be more effectively allocated,” said Lewis, who was interviewed by Pacific Health.

Under an outsourcing arrangement, the Health Services Agency could limit its role to conducting annual reviews on patient outcomes and chronic disease care, Lewis suggested.

Ken Carlson
Modesto Bee