The leadership at the Coastal Health Alliance has new plans to fold the nonprofit into Petaluma Health Center, a larger organization it hopes can both relieve the alliance’s heavy administrative burden—which it says is causing staff burn-out and turnover—and expand services for patients on the coast.
It is not the alliance’s first effort to merge. In 2017, plans to fold into West County Health Services fell through for undisclosed reasons, leaving C.E.O. Steven Siegel searching for a better fit. A comprehensive needs assessment commissioned by the alliance in 2010 foresaw a slow decline in patient numbers due to an increase in second homes. The report recommended merging with a larger entity to maintain financial viability.
Last week, the alliance’s board of directors voted to continue moving forward with the proposed collaboration with Petaluma Health Center, which Mr. Siegel says he hopes will be finalized at the year’s end.
In a welcome twist, Coastal Health Alliance founder Dr. Mike Witte, who retired in 2015, founded the Petaluma clinic too—a history that continues to unite the organizations.
“Because we were [Dr. Witte’s] baby, and he had another baby out there in West Marin, there has always been a strong relationship between the two health clinics,” Pedro Toledo, the chief administrative officer at Petaluma Health Center, told the Light. “We’ve always had a relationship. We work together, and there is a lot of overlap in clients already. It’s almost like we’ve always been family and we are going to strengthen our ties even more under the same corporate umbrella.”
One of the major benefits for the alliance is a larger, more specialized staff—especially on the fundraising and record-keeping side of the business.
Both the Petaluma Health Center—which has 400 employees, two main facilities and five satellites in Sonoma County—and the Coastal Health Alliance—which has 50 employees and sites in Point Reyes Station and Bolinas—are federally qualified health centers, which means they adhere to strict reporting requirements to renew the grants that provide the majority of their funding. They both serve what qualify as “underserved areas,” making them eligible for these funds.
“Federally qualified health centers have bipartisan support: everyone loves them because they're the most effective and efficient way to provide community-centric primary care,” said Daniel Winokur, a director at a Los Angeles-based health care consulting firm who is helping to facilitate the merger. “But the program is very resource-intensive to deliver: there’s an incredible reporting and compliance overlay.”
According to Mr. Winokur, even larger organizations have trouble keeping up with this regulatory burden. Economy of scale is essential, he explained, and the small size of the Coastal Health Alliance, which has a $5.9 million budget, has meant that there isn't a whole department dedicated to administrative duties like reporting and fundraising, such as at the Petaluma Health Center. Instead, the burden is dispersed among staff, who are stretched thin to keep the alliance financially viable.
It’s also hard to find staff, Mr. Siegel said, who possess both medical expertise and the know-how to keep up with the necessary level of federal reporting, which is not required of doctors at a private practice. This would cease to be a problem were the alliance to merge with the Petaluma center, which has both specialized support and better data systems.
Mr. Siegel says he is constantly hiring, a fact he attributes in part to the high cost of living and the rural setting.
According to Mr. Winokur, the merger could help with that too: doctors in West Marin might like to have the expanded option of working in Petaluma part of the week, where there are more services and they can do more with patients in-house. On the other hand, Petaluma doctors might want to go out to the coast once in a while, though they might prefer to live in the city.
There is already collaboration between the two organizations. Since 2017, the Coastal Health Alliance has contracted some work to employees at the Petaluma Health Center, including to the chief medical information officer and a data specialist; it has also outsourced employee trainings to the center. The alliance routinely refers its patients to specialists at the center, such as for obstetrics and gynecology.
Mr. Siegel said the two organizations have figured out how the alliance would retain all of its current employees through a merger. He himself plans to stay on for a year during the transition; then he would retire, though he would stay in the area to be near grandchildren.
Patients, Mr. Siegel said, may not see many changes—though he hopes there will be some improvements, including by bringing in more specialized physicians to West Marin locations and by providing online visits, which the Petaluma center uses regularly. With more staff available to apply for grants, he also hopes there would be more funds.
After a community forum in Bolinas last month, Mr. Siegel said he is working already on integrating feedback—in particular, exploring how to provide longer visit times and improve the patient portal, among other ideas.
Should the merger go through, he emphasized, the alliance would still remain largely independent.
“This won’t change the coastal vibe: no one can change that,” Mr. Siegel said. “[Petaluma Health Center] has huge buildings and facilities with a big support staff, and we couldn’t do that if we wanted to. We have spatial limitations, and we have community expectations—how the community wants to receive care.”