Alaska Regional Hospital announced Thursday that it had temporarily closed its new primary care clinic in Mountain View because of larger-than-expected financial losses driven by a patient base that had more complex health needs than it anticipated.
"We feel bad about this," Julie Taylor, the hospital's chief executive, said in an interview. "This is not the way we had hoped things would go."
The hospital had just opened the Mountain View health clinic at the beginning of December in an effort to drive down the number of unnecessary and costly emergency room visits from neighborhood residents. Mountain View, long one of the city's poorest neighborhoods, had not had a primary care clinic within its limits since 2008.
"When we first looked at opening, the visits we thought we were going to divert were the flu symptoms, the headaches, the simple stuff that ends up in the ER because they don't have the options locally," Taylor said.
At the time of the new clinic's opening, Taylor cited supporting data: The hospital had recorded roughly 5,000 ER visits from neighborhood residents in 2015, and about half of those were for health concerns a primary care doctor could treat.
But during the clinic's seven months of operation, Taylor said those more simple, primary care visits only made up about 10 percent of the roughly 600 appointments logged. Instead, the clinic saw many patients with serious health care needs and mental health problems.
"Rather than sore throats, we have been treating patients with multiple issues like diabetes, hypertension and heart disease, in addition to mental health disorders," Taylor said in a statement announcing the temporary closure. "These are diagnoses that require a significant amount of attention and long-range support."
Taylor said she originally planned for the clinic to see 25 or 30 patients a day, but it proved impossible.
"We were using five or six staff members total to see 15 patients a day, and it doesn't work. The math doesn't work," she said in the interview. "When you have a larger clinic, you have economies of scale. Because this is a single provider in a single location, you can't spread out those costs across multiple providers."
The clinic included a staff of six: a doctor, a nurse, a medical assistant, a front-desk employee, a security person and, for some time, someone who handled lab work, Taylor said. They treated their final patient Wednesday afternoon, she said.
Taylor said she always expected the clinic to operate at a loss, but the financial hit was nearly double the original projections. She said the newly imposed cuts in Medicaid reimbursement also hurt the clinic's finances, as well as the "unexpected need" for onsite security.
She declined to say specifically what the clinic's financial loss amounted to by Thursday, only that it was "hundreds of thousands of dollars beyond what we projected." In December, she said she expected the new clinic would lose anywhere from $500,000 to $750,000 annually, but would save the hospital system money overall by decreasing ER trips.
Taylor said the hospital had not noticed any change in its ER visits. She said the hospital is committed to reopening the clinic once it figures out how to create a sustainable operation, though she didn't have a timeline.
The hospital is leasing the clinic building from the Anchorage Community Land Trust, an organization with a focus to revitalize Mountain View. The lease doesn't expire until the end of July 2021.
Stuart Bannan, assets manager for the land trust, said the agency was committed to continue to work with the hospital to eventually reopen the health clinic. He said the clinic's financial problems underscored just how big the need is for health care in Mountain View.
"The real issue was there was (more) of a need than what the Alaska Regional business plan originally supported," he said. "We just see it every day — people need pretty severe assistance with mental health and chronic health."