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Clinic could lose dozens of doctors

But they say they'll see their patients, despite big facility's problems

BY SUSAN JAY

Medford Clinic's future remains uncertain as almost half the doctors who are shareholders are considering leaving.

Despite this uncertainty, clinic physicians said they will continue to see their patients -- whether they leave or stay.

It is still too early to predict the clinic's demise, even though rumors about such a scenario run rampant and many doubt the clinic can survive.

One of the doctors who has decided to leave -- and who reassures his patients that no matter what his address is he will continue to see them -- is longtime Medford Clinic cardiologist John Forsyth.

Like most doctors at the clinic, Forsyth and four other cardiologists have struggled over their decision for weeks.

Our department was saying we feel it would be in the best interest of patients if the clinic organization changed radically or dissolved, he said.

Their reasons are numerous and complex.

Forsyth, who has been with the clinic since the 1970s, said the cardiologists felt it was no longer possible to provide both primary and specialty care to a large, economically diverse population given the economic forces dominating medicine.

Those forces include managed care, health insurance profits and the huge difference in income between specialists and general practitioners.

Other reasons include too much physician time spent in weekly meetings on clinic operation, a failure to realize economies of scale as the clinic grew, and the failure of the clinic's partners in the physician management group, Physicians Partners Inc.

It's a terrible feeling, Forsyth said, to leave a practice one believed in and helped to build. It's like the dying or grieving process.

He and his colleagues are not sure of their next step and are reviewing their options, which include forming their own cardiology practice.

Forsyth stressed that clinic doctors want to assure their patients that they will continue to care for them.

Most patients will probably be able to keep their health insurance plans as well, said Jerry Livaudais, acting CEO of Medford Clinic.

The doctors who leave the clinic may likely join Prime Care, an independent physicians association that has contracts with all major health insurance plans in the valley, Livaudais said.

Nothing will be known for sure until the clinic shareholders, of which there are 52, vote to stay or leave. No date has been set for that meeting, but it will probably occur within the next 30 days, Livaudais said.

The 52 physician-shareholders are among 78 care providers at the clinic. The total includes physicians, nurse practitioners and physician's assistants.

Shareholder physicians have three options, Livaudais said. One is to leave the clinic and terminate their shareholder position.

Another is to leave the corporation but to contract with Medford Clinic for business and management services, including leasing office space and contracting for support staff.

The third option is to stay with the clinic.

The doctors who stay will vote on whether to adopt the management team's suggested reorganization into small group practices.

Each practice or specialty would operate as a separate clinic and contract with the clinic for business services, including accounting, billing and personnel.

It restores accountability to the doctor level, Livaudais said. Now they can run the organization from their little clinic, rather than the organization trying to run their practice.

Rumblings of financial trouble started last year, Forsyth said, but everything mushroomed when a number of physicians started leaving in February.

By the end of June, 13 physicians will have left, including three obstetrician/gynecologists, two internists, two gastroenterologists and two general surgeons.

Three more have already handed in resignations and will leave by Sept. 1, 1999, said Jean Steinberg, associate manager of medical staff services.

Six new physicians, however, including a dermatologist, two orthopedists and a podiatrist, are planning to join the clinic by Sept. 1.

And, Livaudais said, the clinic has recouped $2 million in the past few months from trimming many operational costs and some layoffs.

The physicians who have already left did so for a variety of reasons, but for many it was because of the financial cloud that still looms over the Medford Clinic.

The source of that cloud is Physicians Partners Inc., a physician management group in Portland formed by the Medford Clinic, the Corvallis Clinic and HealthFirst.

PPI was to help the clinics perform better with management expertise, capital and business services.

PPI borrowed $8 million from U.S. Bank. First Union Capital Partners of North Carolina invested $15 million into PPI as shareholders.

PPI started to unravel last year when HealthFirst, the biggest of the three clinics, ran into financial trouble and half of its physician staff resigned.

PPI is a big factor, no doubt about it, said Livaudais. The big question for the Medford Clinic is how to leave PPI and deal with the debt from the partnership.

PPI is negotiating with its debtors now, and it's clear that we don't have an unlimited ability to handle debt, Livaudais said.

Even those physicians who are leaving will be responsible for part of that debt in one way or another, he said.