Mike Salsbury/The Olympian
Cheryl Harper brings her nephew, Bryan Villavicencio, 7, to the Pacific Walk-In Clinic to treat an apparent ear infection Friday. The walk-in clinic is in the same building as one formerly operated by Memorial Clinic.

Defunct clinic home to new doctor roster

Physicians go it alone at site of former Memorial Clinic

LORRINE THOMPSON, THE OLYMPIAN

Originally published January 7, 2002

OLYMPIA -- Six months after closing its doors as a comprehensive medical clinic, the former Memorial Clinic has completed most of its transformation into a medical office building.

The clinic building has been renamed Memorial Medical Plaza, new signs have been erected, and most office space has been leased by former clinic physicians now operating their own practices.

"We called ourselves a Goliath before and now we're a bunch of Davids," said Nelson Goehle, the former clinic administrator who now oversees management of the plaza.

On Jan. 2, the plaza welcomed its first new physician, Dr. Zachary Chen, who specializes in internal medicine and is taking new patients.

But the clinic is not the only thing in transformation: Former Memorial Clinic physicians report that they are learning the business end of health care in their new practices, they like having more control, but they are working harder and, in some cases, paying themselves little or nothing as they get established.

"It's been a pretty overwhelming year," said Dr. Dirk Havlak, a family practitioner now a partner in Pioneer Family Practice in Lacey.

Both the medical plaza and the new practices are heading into 2002 with an eye on an unstable health care market that saw more than 20 physicians leave Thurston County, and dozens more close their doors to patients with low-paying government insurance plans.

The economy, people losing health insurance, changes in insurance -- "those are the kinds of things that now, as a small business, I start to think about," said pediatrician Dr. Carl Lindgren, a partner in the new Olympia Pediatrics.

But physicians have hope.

"You can't do any worse than 2001," said pediatrician Dr. Amy Belko, also with Olympia Pediatrics.

From clinic to plaza

Memorial Clinic operated for 51 years as a multispecialty health clinic in Olympia. At one time, it had 90 physicians, a laboratory, an X-ray department, separate urgent care and back care offices, and a physical therapy office.

Doctors were essentially employees of the clinic, with administrators handling business and employees' issues.

It dissolved on June 30, 2001, brought down by a mixture of elements, including unprofitable contracts with insurance companies, low reimbursement rates from government insurance plans such as Medicaid and Medicare, increasing administrative requirements, a loss of physicians and other health care marketplace problems.

"It was basically a function of the economic model of a perfect storm," Goehle said. "Everything going wrong at the same time."

Changing from a clinic to a medical office building has been legally complex, with a change in corporate structure and the need to sell the clinic's laboratory and X-ray departments.

Also, staff members are still dealing with requests for medical records from former clinic patients, and with payments coming in for care Memorial Clinic staff provided.

"I call it the Chinese water torture," Goehle said of the slow wind-down of clinic business.

However, in the 90,000-square-foot building, only 5,000 square feet are vacant. Goehle said he's getting many inquiries, some from physicians out of the area, and he expects the building to be full by spring.

Chen is the first to set up practice in the plaza from outside Thurston County. He moved to Olympia after working with American Indian clinics in Idaho and Spokane, and after practicing in Edmonds.

Originally from Taiwan, Chen chose internal medicine because "it's more complete. It's a problem-solving process."

Chen said he chose Olympia because he has family in the area, but he was a little concerned to find the unstable medical atmosphere.

However, "Medicine is not about finances," he said. "Certainly we have to survive, otherwise we can't provide the services. I think the clinic can survive."

Doctors and small-business owners

The second half of 2001 was an education for many former Memorial Clinic physicians.

"I remember I used to wonder why the clinic would charge for Band-Aids. But now I order them and I know how much they cost," said Dr. Susan Links, co-owner of the Pacific Walk In urgent care clinic in Lacey.

The clinic was Memorial Clinic's urgent care office before being purchased by Links and Dr. Patricia Sylvester. It provides urgent care as an alternative to emergency room care, is open longer days and on weekends, and has laboratory and X-ray services.

Links and Sylvester had to take out $100,000 loans each to start the practice.

"It's really expensive to run a practice. The little things really do add up," Links said.

Starting up a practice has "been difficult, but we've learned a lot," she said. "Prior to this, we just saw our patients and that was it. It's given us more empathy for the business side of medicine."

One surprise: "The consultants who came in to set up our computer system -- they're getting paid more an hour than we are," she said.

One reason the physicians decided to remain in Thurston County, she said, was worry about what would happen to the community if the clinic closed -- particularly with both county emergency rooms becoming swamped with people who don't have physicians.

That was another surprise, Links said: About 15 percent of the clinic's patients come in paying cash because they don't have health insurance.

"We thought it would be about 5 percent," she said.

Links said she and Sylvester are still not drawing salaries, instead using revenues to pay operating costs and the salaries of the six other part-time physicians who work at the clinic.

The doctors believe that will change this year, and Links said she is more concerned about family practices in Thurston County in the current medical market.

Havlak agrees that family practice is not easy in South Sound and Washington state.

"We didn't pay ourselves for the first two months," he said of the partners at Pioneer Family Medicine. The office started with four former Memorial Clinic physicians, then recently added a fifth doctor.

The doctors are working longer hours and making less than they did at Memorial Clinic, though the doctors hope that will change with time.

"We'll see. There are a lot of insurance changes that happen at the beginning of the year," Havlak said.

By setting up their own practices, the physicians have more control and more responsibility, he said.

"We're closer to it, closer to the numbers. We know at the end of the day how we're doing," he said. "It's been kind of fun, but it's also been difficult."

More work

Belko and Lindgren also have been surprised at the amount of work entailed in the business side of medicine.

"The big challenge is the organizing of a small business. It kind of astounds me," Lindgren said.

"It's a lot more work than it was under Memorial Clinic," Belko agrees.

But Lindgren finds the extra control of steering a practice -- Olympia Pediatrics includes seven former Memorial Clinic physicians -- to be exciting.

"It's quite the adventure," he said. "We have our practice, and we have our business."

So far, the practice is financially stable, Belko said.

"We've got our heads above water. We're making payroll and paying off the loans," she said. "Our patients have been very loyal and very understanding of the transition."

The physicians hired a consultant, an office manager and experienced staff members, and planned for unexpected problems, Belko said.

"That really has helped us," she said.

Asked if she would have chosen to keep Memorial Clinic rather than go into private practice, Belko said she has mixed feelings.

The clinic "was a huge loss," she said, particularly with so many patients closely connected to the long-time clinic's many offices and doctors.

On the other hand, Belko believes the pediatric practice will eventually be financially stronger than it could be under the clinic.

But in the end, the decision was not about economics, she said.

The seven pediatricians worried a lot about what would happen to their patients if they left the area or stopped practicing, with such a shortage of physicians in South Sound.

Taking a leap of faith and opening a practice was the only choice they could live with.

"It was either that, or leave town," Belko said. "We couldn't abandon our patients."

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

Records, leasing

Requests for Memorial Clinic medical records are still being taken at the old clinic building, now called Memorial Medical Plaza. For information, call 360-456-1122. For information on leasing space, or other business questions regarding the Memorial Medical Plaza, call Clinic Properties at 360-413-8100.

Where Memorial Clinic doctors went

When Memorial Clinic dissolved at the end of June, 13 physicians chose to leave the area, retire or stop practicing. In the year prior to that, about 20 Memorial Clinic physicians had moved on, either leaving the area or opening their own practices.

New practices formed by, or established practices joined by, former Memorial Clinic physicians include:

- Horizon Medical Group, 360-413-8315, a practice of five physicians specializing in gynecology, urology and obstetrics.

- South Sound Pulmonary Associates, 360-413-8272.

- Cardiology Associates, 360-413-8525.

- Gastroenterology Associates, 360-413-8250.

- Dermatology and Allergy Specialists of Olympia, 360-413-8760.

- Olympia Orthopedic Associates, 360-413-8500, joined by three former Memorial Clinic physicians.

- Memorial Nephrology Associates, 360-413-8121.

- Olympia Pediatrics, 360-413-8470.

- Olympia Neurology, 360-413-8550.

- Olympia Neurosurgical Associates, 360-528-8510, with Dr. Joseph Arguelles.

- Pioneer Family Practice, 360-413-8600.

- South Sound Internal Medicine, 360-491-1112.

- Surgical Associates, 360-493-5252, joined by one Memorial Clinic physician.

- Comstock Physical Therapy, 360-413-8740.

- D.L. Fairbrook, 360-491-4460, internal medicine.

- William Gromko Jr., family practice, 360-413-8755.

- Olympia Orthopedic Associates, 360-491-4211.

- Pacific Walk In Clinic, 360-413-8700, urgent care.

- New internal medicine physician Dr. Zachary Chen is now practicing at the Memorial Medical Plaza, and can be reached at 360-413-8199.

The Olympian Copyright 2002

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