Photos by Mike Salsbury/The Olympian
After having flulike symptoms that persisted for about two weeks, Leroy Slemmer of Lacey visits the emergency room at Capital Medical Center accompanied by his wife, Jennifer, and daughter Erica, 9 months, on Thursday. They were planning to leave for a vacation but were concerned about continuing symptoms he was experiencing, prompting the visit to the emergency room.

Dr. Cynthia Wolfe, head of emergency room physicians at Capital Medical Center, examines Elma resident William Oldham as part of an occupational physical during clinic day at the emergency room.

Stormy year for health care

Tough choices leave patients without options

LORRINE THOMPSON, THE OLYMPIAN

Originally published December 23, 2001

THURSTON COUNTY -- If the condition of health care in South Sound were depicted in paintings, 2001 would have begun as a gray day with storm clouds on the horizon -- but with a hopeful ray of sunshine breaking through the clouds.

A similar painting at the end of the year would show a dark, stormy sky with rain and lightning on the horizon.

And that ray of sunshine would have dimmed noticeably.

A turbulent year for medical clinics, physicians, health networks and emergency rooms has rocked thousands of South Sound residents with:

- Loss of their doctors and insurance plans.

- Few primary care doctors and specialists who will accept new patients.

- Long waits in emergency rooms.

- Increased health care costs, and concern that the worst is yet to come.

Although health care officials hoped the medical storm would calm by year's end, that hasn't happened.

Many South Sound residents are still struggling to find medical care and are still lining up in emergency rooms.

For many physicians, the year has meant increasing burnout, loss of income and hard choices -- to leave Thurston County and practice elsewhere, retire early or close doors to patients with low-paying, highly regulated government insurance plans.

Dozens of local doctors have made those choices in 2001, and thousands of patients have felt the effect.

"I think the health system has taken a big hit, and I don't think the hits are over," said Dr. Curtis Edwards, past president of the nonprofit Thurston-Mason Medical Society.

Because of a formula written into federal law years ago, Medicare reimbursement payments to physicians and hospitals are scheduled to decrease an average of 5.4 percent next year, prompting more doctors to consider closing their doors to Medicare patients.

Medical shortages

In a report to be released early next year by the University of Washington, health researchers found that 14 additional "health professional shortage areas" have been designated in the state compared to 1998.

For example, 37 counties -- including Thurston County -- are identified as having physician shortages.

Thurston and 31 other counties also have dentist shortages, and 42 areas in 29 counties including Thurston County have medically underserved populations, according to the report.

"The providers are literally in a revolt out there," state Insurance Commissioner Mike Kreidler told a state conference of health care officials in early December.

With doctors leaving the state or refusing to accept Medicare and Medicaid insurance, the situation is known as "provider push back" among state and insurance company officials.

Factors collide

A collision of factors that reached critical mass in 2000 and 2001 are primary reasons for the health system's struggles.

Those factors are:

- Low Medicare and Medicaid payment rates to Washington doctors, combined with high administrative costs.

- Ever-tightening managed care payments and regulations.

- Increased costs of technology and malpractice insurance.

These factors have combined to put physicians in a financial bind.

Two South Sound physician networks, one insurance company and Thurston County's oldest and largest medical clinic folded in 2000 and 2001.

Even as doctors battled system strains, federal and state governments announced aggressive programs to audit doctors for possible Medicare and Medicaid errors or abuse.

That added insult to injury, doctors said.

Kreidler compared growing health system problems to a giant, destructive wave detonating on a shore.

"It starts out in the ocean as a small ripple, but we all know what happens when it reaches the shore," he said. "I feel very strongly that we're looking at a tsunami. We're out in the ocean, but land isn't far away."

Local effects

Carrie Day wanted to take her 10-year-old daughter, Kylee, to a doctor on Tuesday, but she knew that they would end up in an emergency room instead.

Kylee had suffered with a worsening sore throat for days, but Day waited, hoping it would get better.

A single mother who recently became unemployed, Day has Medicaid insurance for Kylee.

However, when Day called her Medicaid insurance company -- Molina -- she was told that no pediatricians or primary care doctors in Thurston County would accept new Medicaid patients.

Call back later, they said, or go to the emergency room.

"I thought, 'Well, that's going to cost a lot of money for somebody,' " Day said.

It's a situation the mother and child have faced all year.

They visited one physician when Kylee had a skin problem, but when they called again, she was told the office no longer accepted Medicaid.

"Only one visit before we got booted," Day said.

It's a situation the county's two emergency rooms are well aware of.

Patient visits to Capital Medical Center's emergency room jumped 15 to 20 percent this year and have stayed high, primarily because patients can't find doctors who accept their insurance plans, said Emergency Department Director Dr. Cynthia Wolfe.

When the county's largest and oldest medical clinic folded in June -- Memorial Clinic had 74 doctors at the time -- emergency department staff members expected increases for a while, until patients could find new doctors.

But many patients haven't found new doctors.

"We thought our volume would go down, but it never did," Wolfe said.

The same is true at Providence St. Peter Hospital's emergency department.

Patient volumes are "probably worse now than when Memorial Clinic pulled up stakes," said ER Medical Director Dr. William Hurley.

St. Peter's ER will treat more than 55,000 people by the end of 2001 -- a 17 percent increase from 2000.

Wolfe said what is scarier to her is the increasing number of emergency patients with Medicare insurance who can't find doctors.

Clinic 'swamped'

Low-income patients are also flocking to the new Sea Mar Community Health Care Clinic, which opened in January.

County health officials have frequently called the new clinic a ray of sunshine in South Sound's health system landscape.

However, Sea Mar is "absolutely swamped," said Linda Ratliff, nurse manager for Sea Mar.

The clinic is making nonurgent appointments for four to six weeks out, she said, and is constantly hearing from frustrated people who have insurance but can't find doctors.

"Thurston County definitely has a severe medical problem," Ratliff said.

A particular struggle for the clinic is finding specialists to refer patients to because so few accept Medicaid payments.

"We've probably lost 50 percent of our specialists this year," Ratliff said.

Squeezing hospitals

Thurston County's two hospitals say they're operating on very tight financial margins as 2001 ends, and government regulations and payment rates show no sign of improving.

"We're still here, which is an accomplishment in itself," said Capital Medical Chief Executive Officer Joe Sharp.

But Sharp said there are more clouds on the horizon -- in the form of looming payment reductions from the government.

"It would be nice if Congress and the state Legislature would leave us alone," Sharp said. "We don't ask for more money. Just don't take any more away. That would be my message."

Sharp also worries about state budget plans for 2002.

"I've told (state legislators): 'If you do anything to cut reimbursements even more, you'll have a revolt on your hands,' " Sharp said.

St. Peter officials say they are looking forward to a planned expansion of the hospital, and see some reasons for optimism.

However, government payments and regulations continue to strain hospital finances across the state.

"It's not gotten easier," St. Peter Chief Operating Officer Jim Leonard said.

Malpractice rates

The hospitals also got a scare late this year when they learned the malpractice rates for their emergency departments would increase substantially because of various market forces.

Wolfe was first told her department's rates would quadruple, and she told Capital Medical administrators if that happened, the ER would close.

The St. Peter and Capital Medical Center emergency departments operate separately from the hospitals -- essentially they are emergency medicine practices that use hospital facilities.

However, after some work by Wolfe's insurance broker and others, the rates only doubled -- from $44,000 a year to more than $80,000.

"We can manage that for this year," Wolfe said.

Rates for St. Peter's emergency department will go up 60 percent, Hurley said, from $100,000 a year to $160,000. The department's nine physicians will take a pay cut to absorb the cost.

"We've decided we're going to continue to work here, although this will cut into our incomes," Hurley said.

"Now, if similar occurrences continue to develop in the future, we all may be looking for other jobs, like some of our colleagues."

The rate increases are hitting other Washington physicians as well, adding another source of strain to a burdened system, health officials said.

Medicare woes

After more than a year of practicing internal medicine in Thurston County, Dr. Sarah Reade made a tough decision this year -- she chose to stop accepting Medicare patients.

Reade had to inform about 100 patients they would need to find new doctors.

She found that Medicare payments were so low and the documentation regulations so extensive, she could not cover her costs.

One day Reade got a check from Medicare for $1 -- someone screening her billing for $75 had disallowed a medical service.

"I can tell you, I'm really tired. I'm tired of working for free," Reade said. "Actually, I'm tired of paying to work."

Since May 2000, Reade has taken home no salary. All medical fees have gone to pay her staff and her office expenses. She recently wrote a personal check for $5,000 to cover expenses.

Family practitioner Dr. Stephen Albrecht has had similar experiences, and his Olympia Family Medicine practice stopped accepting Medicare early this year.

If Medicare actually paid physicians at the rates quoted, it would probably be OK, Albrecht said.

But that doesn't happen, he said.

"Medicare will nickel and dime you to death," Albrecht said. "They reject a lot of legitimate charges arbitrarily."

Tumwater Family Practice has also decided to stop accepting one Medicare plan -- Secure Horizons. The practice had to inform about 300 patients of the decision.

Physicians found the plan burdensome administratively and too risky to accept because it included managed care capitation rates, said Dr. John Peterson, a member of the four-physician practice.

The capitation rates pay physicians a flat fee for care, regardless of what treatment the patient actually needs.

Medicare rates have become a focal point in the raging health care storm because Medicare is often used as a base for setting other rates by states and private insurance companies.

This has left Washington physicians and other health care providers feeling squeezed, because Washington has among the lowest Medicare payment amounts per capita in the United States.

In fact, Washington's Medicare payment amounts are eighth-lowest in the nation, according to the federal government.

Add to that a plan to decrease Medicare reimbursement rates an average of 5.4 percent next year -- because of a formula written into law years ago that is related to economic factors -- and the Medicare situation is looking bleak, officials say.

Kreidler said state health officials should develop a strong campaign to address the "grievous situation" of state Medicare rates.

"That's something we can do right now," Kreidler said.

A bill in Congress to reduce the 5.4 percent decrease to about 1 percent has not gotten out of committee, so there's not much chance of the bill becoming law this year, said U.S. Rep. Brian Baird.

The lack of action frustrates Baird, particularly after the House of Representatives approved a large tax cut that will give major corporations billions of dollars, he said.

"In a time of war, when our seniors can't get doctors, we give billions of dollars to corporations?" said Baird, who voted against the tax plan.

Baird and other state representatives have also formed the Fairness Coalition, which will work on getting Medicare rates equalized among the states.

"If every American pays into Medicare at the same rate regardless of where they live, then they should get benefits at the same rates regardless of where they live," Baird said.

"The people in Florida didn't pay any more into the system than the people in Washington," Baird said.

However, Medicare in 2000 paid an average of $6,937 per Medicare enrollee in Florida for medical services, compared to an average of $3,921 per Washington state enrollee.

Holding up the sky

The close of 2001 finds South Sound residents with a number of effects from the evolving health system:

- Low-income residents, such as Carrie Day and her daughter, are hardest hit and struggling to find doctors. As of January, 24,698 Thurston County residents were enrolled in low-income programs.

- Medicare enrollees, such as Allen and Margaret Plue, are having increasing problems finding physicians. The Plues lost their doctor in June and have not found another. More than 26,000 county residents are enrolled in Medicare.

- Patients who have doctors are noticing more treatment delays and other difficulties.

"It does take a little more effort to get the care I need," said Lacey resident Jean de Marines. "It's added a little bit of strain."

- Physicians are learning they have to make tough business decisions to avoid the collapse that others have suffered, which means rejecting patients with poor-paying insurance plans.

For all of the new strains on the health care system, health officials are getting used to working in a state of crisis.

"The health system always is on the verge of collapsing. ... The sky is always falling," said Patricia Lichiello, senior policy analyst for the University of Washington's Health Policy Analysis Program.

"It's true, but not for the whole sky," said Lichiello, who said this was her personal view, not that of the program's.

The health system is so complex that at any one time, several important facets of the system are in crisis, while others might be stabilizing or improving.

For example, Lichiello said public health services and Medicaid programs are hurting badly because of tax cuts and other government finance problems.

On the other hand, health insurance plans are stabilizing after a couple of years of upheaval because plans have pulled out of unprofitable areas such as Medicaid and Medicare coverage.

"I think our system keeps wobbling along as it tries to maintain balance as various of its parts are in trouble," Lichiello said.

No matter which part of the health care sky is falling, she added, one thing manages to hold it up -- very committed people in social and health agencies who work at protecting health services.

Edwards, the medical society's past president, is not as optimistic as Lichiello.

Enough negative factors are converging that "I see a second exodus of physicians from this area," he said.

"The physicians feel like they're not getting much help from any sector," Edwards said. "Why would you turn down an offer from somewhere else?"

Albrecht agrees that there is growing burnout among Washington physicians, but he's also optimistic.

"I don't think things can only get worse," he said.

"This has been a year of rapid changes. It's the changes ahead, over the next three to five years, that are going to be the real telling thing."

Lorrine Thompson covers Thurston County and health for The Olympian. She can be reached at 360-754-5431.

Rating the Ms of Washington health care

- Medicaid: In a national study by the Lewin Group, Washington ranked 35th among the 50 states in its Medicaid reimbursements to physicians -- on average paying 72.7 percent of what Medicare would pay for the same services. The states that paid more (Alaska pays 126 percent) tended to be smaller states with limited Medicaid enrollments. The states that paid less (California pays 65.2 percent) tended to be larger states with larger Medicaid populations.

- Medicare: In 2000, Washington ranked 40th among the 50 states for average Medicare payments per enrollee per year. In total payments to physicians, hospitals and other providers, Washington Medicare patients received an average of $3,921 in benefits. Physicians averaged $863 in payments for Medicare enrollees for the year.

- Managed care: A survey of 100 South Sound physicians in January by the nonprofit Thurston-Mason Medical Society found most were highly critical of how managed care affects health care -- 68 percent said managed care is detrimental to patients, 90 percent said it increased overhead expenses, and 71 percent said they would not continue to accept managed care if their practices could survive without it.

- Malpractice: Malpractice insurance rates are going up across the country, partly because of increasing jury awards, partly because insurance companies were hard-hit on Sept. 11. In Washington, however, about 2,000 physicians will be particularly hard-hit because a low-cost insurance company left the field. Many of those physicians will find their rates doubling or more. Also hard hit will be physicians in higher-risk fields such as emergency medicine, obstetrics and surgery.

- Medical system: In a survey of 273 doctors and state and county health officials who attended the state health legislative conference in early December, 47 percent said they do not think the state's health system does a good job meeting residents' health needs. Respondents also ranked the most pressing problems in this order -- first, social and economic health disparities; second, low Medicare-Medicaid payment rates to health-care providers; third, pressure on the state budget to cut Medicaid enrollees; fourth, the number of uninsured state residents.

Ahead in the Legislature

Several health care issues are likely to confront the state Legislature when it meets Jan. 14. Likely issues include:

- New, stricter eligibility standards for the poor who rely on state Medicaid programs for medical care. The state has applied to the federal government for a waiver to allow the changes, in effect cutting off some people.

- How to cut down the state's cost for prescription drugs provided to the poor and the disabled.

- How much money to give nursing homes for Medicaid patients.

- How to spend any windfall Medicaid reimbursements the state wins from the federal government.

- How much replacement funding to keep giving county public health districts to replace what they lost from Initiative 695. Gov. Gary Locke proposed cutting all the money off at the end of 2002.

- How much assistance to give rural hospital districts struggling to keep their doors open.

Whom to call

- Medical Assistance Administration hot line (for Medicaid patients), 800-562-3022.

- Medicare hot line, 800-633-4227.

- Capital Medical Center physician referral line, 888-633-5101.

- Providence St. Peter Hospital NursePLUS line, which does physician referrals, 360-493-4111.

- Statewide Health Insurance Benefits Advisors, which helps with insurance questions for seniors and disabled, 360-493-4316.

Health care events during 2001

- Jan. 1: The year opens with the South Sound health care system already wobbly -- 2,900 people with Medicaid insurance must find new doctors after Group Health Cooperative decides not to renew Medicaid contracts for financial reasons. Also, in late 2000, two physician networks and a health insurance company had collapsed because of financial problems and a number of primary care physicians began to leave the county.

- Jan. 2: Sea Mar Community Health Care Clinic opens with a mission to serve low-income and other underserved patients.

- Jan. 31: Providence St. Peter Hospital's emergency department completes its busiest month ever, seeing 4,448 patients, an increase of 500 from January of 2000.

- March: Memorial Clinic administrators say they might have to restructure the clinic into a medical office building. The clinic is down to 70 physicians, having lost 22 doctors since January 2000, and is struggling financially. Memorial Clinic was founded in 1949 and provides comprehensive medical care for thousands of patients.

- April: More than 300 Memorial Clinic workers begin receiving layoff notices.

- Spring-summer: More and more physician practices begin closing doors to Medicaid patients -- and not just because payments are low. The state's new "Payment Integrity Program" to aggressively audit physicians and threaten them with legal action in case of errors has insulted doctors. For instance, Ear, Nose and Throat Associates Southwest closes to Medicaid because of the program, leaving patients to travel to other counties for specialists.

- May: Patients, such as Mary Ann Webster, begin to talk about losing multiple doctors within a few months' time. Doctors, such as John Walck, Christopher Penoyar and Randy Buckner, announce they can no longer accept managed care insurance plans. Walck reverts to a cash-only medical practice.

- May 30: A standing-room-only crowd of nearly 600 people pack into The Olympian's health care forum in Olympia, featuring U.S. Sens. Maria Cantwell and Patty Murray.

- May 31: St. Peter's ER has another record month, treating 4,679 patients, 705 more than May 2000. Capital Medical Center ER reports treating 14 percent more patients than the previous year.

- June 30: Memorial Clinic ends 51 years as the county's largest multispecialty health clinic. Ten of the clinic's remaining 70 physicians choose to stop practicing in Thurston County.

- July 31: St. Peter's ER finishes the month treating 4,865 patients, 415 more than in June and 847 more than July 2000. ER doctors and staff have meetings about how to ward off burnout.

- August: South Sound pharmacies ask patients to submit refill requests for prescriptions earlier than usual. Doctor and nurse shortages mean prescriptions take longer to get confirmed and filled.

- Fall: Sea Mar's patient volumes have exceeded all expectations, and waiting times increase to see physicians. Clinic administrators begin a search for a location to expand the clinic, something they had not thought would be necessary for many more months.

- November: PacifiCare Health Systems informs about 4,000 Medicare customers in Thurston County that their premiums and co-payments will increase in 2002, because federal Medicare payments are not sufficient. Also, Capital Medical Center emergency services director Dr. Cynthia Wolfe informs hospital administrators that the ER could close, because emergency malpractice insurance rates are quadrupling. The rates are later negotiated down so the ER can remain open.

On the Web:

- HEALTH CARE IN CRISIS

Sound Off at TheOlympian.com: What can be done to improve health care in South Sound?

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