Hospitals offer doctors housing
Loan assistance necessary to attract enough people, they say

Posted on May 29, 2007

By LAITH AGHA
Herald Staff Writer

Community Hospital of the Monterey Peninsula felt it needed to go the extra mile to bring in Terril Lowe as its vice president of nursing.

With the high cost of housing on the Peninsula, a robust salary was not going to be enough. So the Community Hospital Foundation — which handles the hospital's finances — offered Lowe a contract in which the hospital promised housing assistance.

After working for the hospital for several years, Lowe found her 100-mile commute too much to bear, and invoked the housing clause in her contract. At that point, the foundation agreed to jointly invest with Lowe in a home closer to work.

The move was viewed as a win-win for the foundation: a real estate investment that helped keep a high-level employee in a competitive nursing market.

"We think it was a good strategy to help recruit and retain an outstanding employee," said Community Hospital spokeswoman Nancy Gere. "It's a more creative approach than outright buying a house for an employee."

According to Gere, Lowe will not benefit financially from the foundation's investment. Lowe is obligated to buy out the foundation if she decides to leave the hospital, which would capitalize on its investment.

Familiar scenario

This scenario raises issues familiar to all Monterey County hospitals, particularly regarding the availability of physicians.

"We recognized a shortage of different kinds of physicians," said Gere. "People would complain about not being able to get doctor's appointments for months. We have an aging population on the Peninsula. If you don't have enough doctors, that's a problem."

The Peninsula is short 10 to 13 primary care physicians, because new practitioners shy away from the area's high costs of living and starting a practice, according to Dr. Anthony Chavis, Community Hospital's vice president of medical affairs.

Further exacerbating the compensation problem is that the Peninsula is classified by Medicare as a rural area, and thus doctors are not reimbursed as much for their services as they would be in urban areas.

New doctors needed

Community Hospital projects that 50 new doctors will be needed by 2015 to fill unmet current needs and to replace retiring ones, Chavis said.

To contend with the shortage, Community Hospital and Salinas Valley Memorial Hospital have recruiting programs that offer financial assistance to entice doctors to establish practices in Monterey County.

"Physicians on our medical staff really preferred to recruit other physicians on their own, independently of the hospital," said Salinas Valley Memorial Hospital spokeswoman Elizabeth Lorenzi. "But when the cost of housing became a factor, members of our medical staff went to the hospital to seek a solution."

The hospitals came up with similar plans. Community offers forgivable loans comparable to an average yearly income. A primary care physician makes about $170,000, though the average is slightly lower in this county, Chavis said. The loan money does not have specific guidelines for use, though it is intended to assist with either practice startup costs or to pay for housing.

Valley Memorial also offers financial assistance for housing and practice startup. In both cases, if doctors who receive assistance leave the area before their contracts are up, they must pay back portions of their loans.

"It allows them to get established in the community and it's a little bit of a barrier for them to leave the community because they have to pay back part of the loan," Chavis said.

Lorenzi said assisted doctors have to sign promissory notes that state an intent to stay for a certain amount of time "to make sure they are meeting the community need."

Of the 34 doctors Community Hospital has brought to the area since 2001, 25 have stayed, according to Chavis.

California hospitals are not legally allowed to hire physicians, and thus have no formal business relationships with any of them. Rather, doctors visit patients at the hospital as an extension of their private practices. For emergency room doctors, the hospital has an exclusive agreement with a physician group.

Admitting privileges


According to Gere, 342 doctors have admitting privileges, 50 of whom are primary care physicians.

Memorial Hospital has 247 physicians with admitting privileges, 92 of whom are primary care physicians, with a projected need of 37 new doctors by 2010.

A national shortage gives doctors a lot of bargaining power.

"(Doctors) are presented with multiple opportunities,"
Lorenzi said. "They look at where they want to live ... and when they weigh in the cost of living, somewhere else may be more attractive."

"If my option, with a bunch of student loans, is to go to Fresno, the cost of living is lower and my take-home is more," said Chavis.

Work schedules

An anticipated decrease in a doctor's average work schedule also increases the need for more doctors, as does the fact that about half of all medical students are now women. By the time many of these women finish college, medical school and their residency, they are ready to have families, Chavis said, and thus do not enter the work force as full-time physicians.

"That all leads to an increased manpower need," said Chavis.

And that need comes at a time when the baby boomers increasingly need medical attention, Chavis said.

Laith Agha can be reached at 646-4358 or lagha@montereyherald.com.