Kern Medical Center's family practice residency program -- a source of much-needed general-practice doctors -- could be transitioned to a major local nonprofit.
A deal is being finalized to have Clinica Sierra Vista run the training program, with the hope it will draw more young doctors to Kern who then stay here after graduation, Clinica CEO Steve Schilling said Wednesday.
The program appeared to be ailing last year when hospital administrators proposed not bringing in a new class of residents to save money, a suggestion that was met with an torrent of community opposition. The notion of partnering with Clinica to continue the program emerged late last year.
Supervisors must approve the plan for it to go forward.
But the leader of KMC's program said the deal would fragment student doctors' education and abandon a program that has served Kern County well for decades.
Schilling said the Kern County Board of Supervisors will consider approving the deal next Tuesday. Under it, Clinica would hire six new resident physicians in July 2014 -- the same number KMC would have taken -- and add a new six-student class in 2015 and 2016.
In each of those years, Kern Medical Center would graduate a class of physicians and gradually depopulate its program.
Schilling said Clinica has received preliminary approval from the Accreditation Council for Graduate Medical Education to create an 18-resident program in Bakersfield.
The next step would be applying for a federal Teaching Health Center award. Schilling said that funding would come from the Affordable Care Act -- similar to a residency program Clinica currently operates in Fresno.
Under the federal program -- which runs through 2015 -- Clinica would be able to draw down $150,000 per resident to run the program.
KMC is only reimbursed $21,000 per resident from the Centers for Medicare and Medicaid Services, Schilling said.
"KMC covers a fair amount of red ink sponsoring this program," Schilling said.
And the county hospital is looking for services to cut.
In early 2012, a plan to ax one class of family practice residents at Kern Medical Center triggered a firestorm of controversy among people who thought it doomed the whole program.
Then-KMC CEO Paul Hensler said the hospital lost millions of dollars annually on the family practice program.
But local doctors and health care professionals rallied around the program, which they said is critical to attracting young primary care doctors to Kern County to practice.
Ultimately, Kern County supervisors voted to keep the program while they searched for a way to move it to an organization that could operate it more efficiently.
After more than a year of negotiation, the deal is close to completion.
That deal with Clinica would also help KMC deal with its significant financial problems.
Supervisors fired Hensler in September after auditors discovered a $64 million shortfall between expected revenue and revenue the hospital was actually likely to receive.
Now county officials are scouring the hospital's books looking for ways to cut $6.5 million in annual costs.
Supervisor Mick Gleason said the residency program "is a long and deeply entrenched program that has built up a lot of support over the years," and that he understands supervisors were reluctant to change it in the past.
But, he said, supervisors can't ignore "the $64 million game change we had last month."
Gleason said he's spoken to Schilling and KMC Chief Financial Officer Sandra Martin.
"They present a compelling case to move the program," he said. "It's over $2 million -- the loss that was incurred by the program last year."
But Gleason said he still needs to hear input from those that support keeping the program at KMC.
"If there's a benefit on the flip side of that (cost), I need to know about it," he said.
Dr. Navin Amin, chairman of KMC's Department of Family Medicine, said he is not sure what will be presented to supervisors next week. But he and his fellow staff in the family medicine residency program plan to attend the meeting to share their side of the situation if the program is on the board's agenda.
"Our program has been solid since 1976," Amin said.
Amin said the program has provided good care and brought talented physicians to the community. He feels that Clinica's program would be a "fragmentation of (residents') educational activity" by separating them from their exposure to other residency programs when they are training in an outpatient setting.
Schilling said he hopes the Clinica residency program becomes a strong community asset.
If the program gets the green light, new residents would still spend much of their time at KMC. Schilling said they would start out spending just four to six hours a week in a clinic setting in their first year as residents, gradually increasing how much time they spend outside the hospital over the next two years.
The residents might spend time at any of Clinica's nearby sites but would mostly be at the future East Niles location, which is slated to be completed in July.
KMC staff would continue to work with its second- and third-year residents, but Clinica's faculty would oversee the new residents.
"We would be hiring a program director immediately," once the county blesses the program, Schilling said.
The CEO said he understands the transition may be hard for some.
Amin, he said, has "run this program wonderfully for decades."
But Clinica is in a better position to pay for the program and Schilling said he believes he can improve the number of doctors who choose to stick around after they graduate.
He plans to aggressively recruit new student doctors who have roots in Kern County and the San Joaquin Valley and have a vested interest in coming back home to start careers.
In its Fresno program, he said, Clinica has doctors from Bakersfield, Turlock and Fresno. Three of them speak Spanish.
Dr. Michelle Quiogue, a local family practice physician and president of the Kern County Academy of Family Physicians, said the Clinica option is good news because she has doubts about KMC's program continuing in the long run.
"The fact that there's now a Plan B option is very good for ensuring a (primary care) workforce pipeline," Quiogue said.
A family medicine residency located at a health center could have an added perk of instilling a patient-centered medical home mindset in new physicians, Quiogue said. That model of care focuses on coordinating a patient's care and working to intervene upstream before issues turn into illness, she said.
That approach could benefit the whole community, Quiogue said, because then newly minted physicians are trained to treat "preventatively and comprehensively," rather than just trying to rescue people when they've become sick.
"I think you get more value and cost-efficiency when the whole team is working together to keep the patient healthy," she said.
Schilling said there is a possibility that federal funding that would support the Clinica Sierra Vista program might not be renewed in 2015.
If funding for the program did fall through, Schilling said, he would continue the program until all resident doctors had been able to graduate.
The county and Clinica would combine resources to cover the cost.
Schilling said the county would still have to underwrite some costs if Clinica took the reins, about $523,000 the first year, because the program's expense would be greater than the reimbursement for residents.
The county's share in following years would depend on whether the federal Teaching Health Center funding is renewed. If that funding continues, Clinica would need $67,000 from the county in the program's second year and nothing by the third, Shilling said.
But if the federal funding dies in 2015, Schilling said the county would have to give Clinica about $1.4 million to support the program in its second year and about $2 million to keep it going in the third year.
Schilling said that scenario would still be better than the $2.7 million KMC loses running program annually.