What’s the fate of the Corvallis Clinic? If state bars 11-clinic sale to national group, will it simply close?

 

By CHRISTIAN WIHTOL/The Lund Report

Hundreds of Corvallis-area residents and across Oregon have lined up to oppose health care giant UnitedHealth Group buying the physician-owned Corvallis Clinic.

But some critics of the deal fear that if the state bars the purchase, an even worse fate awaits — that the 11-clinic chain serving Benton, Lincoln and Linn counties will close.

More than 300 Oregonians have flooded the Oregon Health Authority with emails and letters, the vast majority objecting to the proposed deal.

It’s by far the largest number of public comments on a proposed health care transaction yet received by the Oregon Health Authority’s relatively new Health Care Market Oversight program. Established by a 2021 law, it assesses the impacts of large purchases or mergers affecting the health care industry in Oregon. The program, one of the nation’s most rigorous for screening deals, seeks to preserve services and curb the rise in health care costs.

The public comment period ended Feb. 21. The health authority said it will issue a decision by Thursday on whether to approve the deal or move it to a longer, “comprehensive” review.

Two sides cite patient care

Opponents of the Corvallis Clinic deal slam Minnesota-based UnitedHealth and its Optum health clinic subsidiary, saying the huge for-profit company puts shareholders ahead of patient care.

In their application for state approval, Corvallis Clinic executives said their company is floundering financially, with ongoing losses, and that without the sale those losses might cause the company to lose providers and “threaten Corvallis Clinic’s ability to operate in substantially the same manner.”

The for-profit clinic chain is a major care provider with over 100 doctors and other providers and a support staff of over 500.

Corvallis Clinic says it submitted three years of financial records to the state but directed the state to keep those confidential under Oregon’s public records law.

The company’s application has prompted some residents to speculate that without the sale to UnitedHealth, the locally-owned chain will shut. The Corvallis Clinic has not made that explicit claim publicly, however.

Opponents of the deal say the lack of information on the company’s finances and other aspects of the proposed deal make it hard to evaluate.

“With so little financial information provided to the public about the financial health of the Corvallis Clinic, and about this proposal in particular … It is definitely not clear if this (sale) is the only way to prevent a rumored shutdown of the Corvallis Clinic, and if that is likely to occur soon,” complained Corvallis resident Nancy Schary in an email to the health authority, adding that she has been a patient of Corvallis Clinic since 1965.

“The mid-Willamette community deserves more information from the Corvallis Clinic and OHA as to why there isn’t time for other buyers with better evidence-based reputations to be pursued and considered.”

Citing trade-secret and other exemptions in Oregon public records laws, the state, UnitedHealth and Corvallis Clinic have withheld from the public case file information regarding the clinic chain’s finances, patient volumes and other data, the names of the individual owners, how much UnitedHealth would pay for the business, and details on how UnitedHealth proposes to run the business.

Financial puzzle

Dr. John Santa, a prominent Oregon health care advocate and former member of the Oregon Health Policy Board, which oversees the Oregon Health Authority, said a different purchaser would be less likely to raise concerns.

“It is hard to imagine that a 75-year-old organization, trusted by the community it serves, with a solid if not outstanding clinical record, believes it has only one option,” Santa wrote in comments to the OHA.

Corvallis Clinic’s chief executive officer did not respond to questions from The Lund Report.

UnitedHealth, and its Optum arm, told the state they won’t develop specific plans for the clinic chain until they have taken ownership and evaluated the business. Optum has submitted documents regarding the “strategies” it would use at Corvallis Clinic once it took ownership, but it says those are secret under Oregon public records law.

“Optum is committed to The Corvallis Clinic’s success by supporting clinicians and the patients and communities they serve with new resources and tools that will help provide long-term stability and success,” Optum spokesman Aaron Albright told The Lund Report. “The Corvallis Clinic will continue to deliver high-quality care to patients, supported by the additional expertise and capabilities of Optum, allowing The Corvallis Clinic to deepen its ability to support the health and wellbeing of patients and communities through value-based care.”

UnitedHealth, through Optum, has been a binge of buying physician practices nationwide and in Oregon as the doctors who own the local clinic systems seek to cash out and retire.

State approval criteria

Oregon health officials are conducting a preliminary review to see if the deal meets state approval criteria.

The state preliminary review can approve a transaction if, for example, it “is in the interest of consumers and is urgently necessary to maintain the solvency of an entity.” A deal can also be approved if it is “unlikely to substantially reduce access to affordable health care” or is “not likely to substantially alter the delivery of health care.”

If the deal doesn’t meet these preliminary criteria, the state must conduct a “comprehensive review.” Under that process, the state must approve a deal if, among other things, it would “benefit the public good,” reduce growth in health care costs, increase access in medically underserved areas, rectify health inequities, or improve health outcomes.

Of the 340 comments submitted, the overwhelming majority oppose the deal. Among the handful of supporters, most are in favor because they see that as the only way to avert closure.

Plus, an Oregon non-profit health advocacy group submitted a petition with over 600 signatures opposing the deal and calling for a “comprehensive review.”

Many commenters also want the state to convene a “community review board,” which involves the creation of panel comprised of community members who would make a recommendation to the health authority. Oregon House Speaker Dan Rayfield, D-Corvallis, has urged the health agency to do that.

Critics said UnitedHealth’s Optum division has a poor track record nationwide and they prefer to retain local ownership.

Some commenters said one reason they are leery of UnitedHealth is its purchase of the Oregon Medical Group clinic chain in Eugene-Springfield in late 2020. With nine facilities, about 100 doctors and other advanced clinicians, and support staff of about 500, Oregon Medical Group is similar in size to Corvallis Clinic.

Since the purchase from its local physician owners, Oregon Medical Group partially shut down for months to carry out a switch to Optum technology, a third or more of physicians have quit, and patients have difficulty getting appointments and other care they need, commenters said.

To gauge the effect of UnitedHealth buying Corvallis Clinic, the state should examine the effects of the Oregon Medical Group transaction, even though that took place before the Health Care Market Oversight program was in place, suggested Dr. Bruce Thomson, a Corvallis-area physician, in comments to the state.

Asked about the comment, an Oregon-based Optum spokesperson responded that since its acquisition, Oregon Medical Group has “expanded clinical and digital tools that we offer patients, expanded team-based and value-based local care, all while continuing to receive four stars or better in Medicare quality and patient experience measures.”

Speculation abounds

Absent hard facts about Corvallis Clinic’s finances and UnitedHealth’s plans, speculation is rife.

When he first heard of the proposed sale, in early January, Corvallis resident Paul Schlegelmann wrote to the health authority in opposition. But a month later, after he said he had spoken with Corvallis Clinic staff, he changed his mind.

“The (Corvallis) Clinic is in a real bind financially,” Schlegelmann wrote to the health authority. “The choices are to either sell to (UnitedHealth) or to close down permanently. After hearing about the current financial situation and the Clinic losing $1,000,000 per month (unsustainable obviously), it does appear that the clinic will have to shut down permanently if not sold.”

“I am in full support of the sale of The Corvallis Clinic to (UnitedHealth) as the best of the two remaining alternative paths.”

One commenter, Thomas Prislac, said the state should buy the clinic system and fund its operations with taxpayer money. “Help Corvallis Clinic out directly, like government should,” he wrote. UnitedHealth “will harm citizens worse than an increased tax burden,” he wrote.

Samaritan Health, the Corvallis-based nonprofit hospital system, should acquire the Corvallis Clinic, wrote Bill Kremer.

It’s unclear whether that’s an option.

“The Corvallis Clinic is an important component of health care delivery in our service area,” Evonne Walls, a Samaritan spokesperson, told The Lund Report.  “While we don’t fully understand their current challenges and opportunities, we would always be willing to discuss with them the opportunity to work together in a more collaborative way.”

The advocacy group Health Care for All Oregon, said the clinic chain’s takeover by a national giant runs against Oregon’s goal of having health care locally controlled.

“Let’s keep our healthcare local, accessible, and patient-centered,” the group wrote in a letter signed by over 600 members.

One commenter, Marganne Huang, who is related to a Corvallis Clinic employee, wrote that the business “is bleeding money every month,” has closed one facility and stopped paying rent on one of its locations.

“I understand that many patients want universal healthcare, and see this (sale) as a step in the wrong direction,” Hang wrote. “What they don’t see is that a NO SALE verdict will not grant this. Instead, the Corvallis Clinic will fold. More than 500 people will be out of a job. Physicians will leave the area. Patients will have fewer and worse options for their healthcare needs.”

• The Lund Reportis an independent, nonpartisan, nonprofit, online news source covering health care issues in Oregon and southwest Washington.