Wednesday, May 19, 2004 | 12:57 p.m.
The University Medical Center administration took the first steps Tuesday toward replacing its Quick Care urgent care center doctors with contractors, privatizing one of the hospital system's last bastions of government-paid physicians.
The leadership of the union representing county and hospital workers, including 60 to 80 doctors who could be affected by the move, immediately and vehemently criticized the proposal, which county and hospital officials said is only in an exploratory phase.
Lacy Thomas, who took over as UMC's chief executive officer in October, unveiled the proposal to a citizens committee as part of a four-point plan to cut costs. The UMC Citizens Task Force was created in early 2003 to recommend ways to improve the precarious financial condition of the hospital and its satellite Quick Care centers.
Other elements of the plan include hiring a company to collect information from patients to improve insurance collection, a review of the cost-effectiveness of UMC's in-house pharmacy and the start of a new multimedia marketing plan to bring more patients into the system.
UMC is Nevada's largest hospital and Clark County's only public hospital. In December 2002, the Clark County Commission pumped $38 million into the system to keep it solvent.
In response to the financial problems, some Quick Care centers were closed, the hospital implemented more aggressive collection policies, and some medical staff members were fired. The county appointed the task force, which now is scheduled to meet just twice a year.
The hospital, county administrators say, is in better shape than it was.
Operating losses that peaked at $3.8 million in February 2003 are now down to $250,000 a month. But as the financial condition of the hospital system improves, the county reduces its subsidy to the system, from $15 million this year to $10 million next year.
And increasing competition from private hospitals in Southern Nevada taking paying customers mean that the system is not out of the fiscal frying pan, county administrators worry.
According to the analysis provided by the hospital administrators, the Quick Care physicians make on average almost $195,000 a year in wages and benefits. That is more than $30,000 higher than the national average for doctors at urgent care centers.
Thomas and Chief Operating Officer Blain Claypool said even a small increase in the number of patients that doctors see every hour -- about 3.3 an hour, according to the UMC Quick Care statistics -- could result in millions of additional revenue for the hospital system.
Thomas asked for, and received, the endorsement of the task force members for the plan, but not before the union objected.
Vicki Hedderman, president of the Service Employees International Union, said that privatization plans for other government agencies have gone seriously awry. She said that state and local governments, facing tough fiscal problems, have privatized services, only to find that the cost savings did not materialize and that the standard of service plummeted.
"Subcontractor work is cheaper for a reason," she said. "Contractor groups are there to make money for themselves. They will come back for more money or pull out and leave patients without service.
"This is not in the best interests of our community or our patients."
The change would affect a small fraction of about 1,300 doctors that now are a part of the medical staff at UMC. Most are in private practice with hospital privileges, or are independent contractors providing specialized services to the hospital system.
The urgent and primary care doctors at the Quick Care centers, however, collect checks directly from Clark County government. The plan would not affect the primary care element of the service, only the urgent care side, according to the proposal.
Dr. George Oehlsen, one of the physicians providing urgent and primary care at the McCarran Quick Care, said it is not clear how the hospital would delineate the two sides of his practice.
He said improving the 3.3-per-hour patient rate for doctors in the Quick Care centers to 3.8 would be "almost impossible" and lead to a decline in the quality of service. Oehlsen also said contracted physicians in the Quick Cares could provide substandard service, a point that prompted a sharp rebuke from County Manager Thom Reilly, who said most of the doctors at UMC already are independent contractors.
Reilly said the control of costs made exploring the idea essential.
"The next step is to cut product lines or cut services, and I don't want to do that," he said, adding that if the idea proves feasible after further study, the county and hospital administrators would talk to the union.
Thomas said the proposal would go forward only if it will save money without hurting service.
"I was surprised they (the union) would say you shouldn't even look at it," Thomas said.
"We'll be pretty confident before we do it that it's workable," he said. Any firm that gets the contract to supply the medical services at the Quick Care centers will have to prove in advance that it can do the work, he said.
The task force agreed to endorse the study of the a private contractor taking over urgent care duties at the Quick Care centers, but asked Thomas to come back to the task force Aug. 1 and present the results of the analysis.
Robert Forbuss, a Las Vegas business and political consultant and task force member, presented a motion that also asked the hospital administration to explore alternatives to the privatization proposal.
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