“The crunch between rising health-care costs and lagging revenues is a national issue, but like a flu outbreak, it hits some areas harder than others.Particularly hard-hit are outpatient facilities in economically prosperous areas – a description that fits the Virginia Mason clinic in Winslow.The economics at the Winslow clinic are very challenging, said Sarah Patterson, the Virginia Mason vice president who is responsible for the system’s satellite clinics.There are no present plans to close the Winslow clinic or make major changes, she said. But I can’t tell you where we might be in a few years.Patterson said that the Winslow clinic does not presently generate enough revenue to cover its costs. And while the Virginia Mason system can subsidize losses in the short term, we cannot operate money-losing facilities in the long run, Patterson said.The problem, Patterson said, is that costs are rising steadily, especially the cost of labor in a low-unemployment market such as the Puget Sound area. But payment levels are not keeping pace, particularly reimbursements from the Medicare and Medicaid programs.Patterson said that outpatient clinic economics are particularly difficult because reimbursement rates for actually seeing patients are relatively low. Our more procedurally oriented facilities where we do a lot of tests do better, because the level of reimbursement for procedures is better, she said.The financial squeeze prompted Virginia Mason to announce in late November that it would no longer accept new Medicare patients at its Port Angeles or Sequim clinics. And while no such restriction has yet been imposed at the Winslow clinic, Patterson could not rule out the possibility at some future time. We are looking for a better balance of patients, she said, noting that Medicare patients make up over 50 percent of the total patient population at the Sequim and Port Angeles clinics, located in popular retirement areas.Patterson said that the proportion of Medicare patients at Winslow was lower than in Port Angeles and Sequim, but she could not provide specific information.The limitations imposed in Sequim and Port Angeles do not affect established patients who turn 65 and go on Medicare, but only to first-time Medicare patients.Patterson said that like most health-care organizations, Virginia Mason loses money on its actual health-care operations, but stays alive through income realized from investments. The downturn in the stock market over the past six months has reduced that income stream, and called into question its reliability, she said. Patterson said that Virginia Mason is making a concerted effort to deliver patient care more economically, which is keeping the losses from being worse. The emphasis, she said, is on administrative functions, not on patient care.Aside from government reimbursement levels, Patterson said a big problem is the different requirements of different insurance companies.We need a staff to keep up with the rules and regulations, she said. Different insurers have different rules about referrals, pre-authorizations, and so forth.And employing people to perform those tasks is increasingly expensive because of the rising costs of labor in a tight employment market, Patterson said.She said it’s questionable whether anyone benefits from the paper requirements.This increases our costs, but it also increases the insurer’s costs, Patterson said. And some studies show that the insurers don’t really save any money with all these rules.Doctors could run facility The clinic has been a fixture of downtown Winslow for decades, but has only been affiliated with the Virginia Mason system since 1994, Patterson said.While the doctors and staff at the Winslow clinic are Virginia Mason employees, the clinic building itself and the land on which it sits are owned by Dr. Thomas Haggar and his partner.Patterson said that if worst came to worst in the future, and Virginia Mason ended its affiliation, it would not necessarily mean that the clinic would close.When we closed a clinic in Enumclaw, the doctors there took it over. It’s quite possible that the same thing could happen in Winslow, if it ever came to that. But the economic problems would affect them the same way they affect us.Haggar agreed that even a worst-case scenario wouldn’t mean the end of a clinic in Winslow.I haven’t heard any suggestions that Virginia Mason might close this clinic, he said. But if anything like that ever happened, I’m sure there will be doctors practicing medicine at this location in some fashion. Patterson said she is willing to talk about the system’s financial problems because public awareness is the best hope for a change.We’re caught in the middle, she said. If people want to maintain today’s level of medical services, they are going to have to let their government officials – state and federal – know that this is important to them. “