Stanislaus County health industry positioned for future growth and job creation

Stanislaus County has long been a health services hub for the Northern San Joaquin Valley and Sierra Nevada foothills.

Although the sluggish economy has health care in a holding pattern, it appears the region's health care industry is positioned for growth and job creation in the future.

In Stanislaus County, more than 20,000 people work in health care, about 10 percent of the active civilian work force, according to the state Employment Development Department.

Looking five to 10 years ahead, industry leaders see several positive signs:

Hospitals are committed to graduate medical education.

The area has good prospects for population growth.

Health care reform will give thousands of uninsured county residents the ability to pay for treatment.

Some challenges, however, threaten to stymie growth in the health care sector:

Lack of access to needed capital

A shortage of health care providers

Uncertainty about funding for a medical school at the University of California at Merced

"I think the door is wide open to expanding services," said John Sigsbury, chief executive officer of Emanuel Medical Center in Turlock.

The 209-bed hospital serves Turlock as well as residents of the West Side and northern Merced County. In recent years, it has invested in cancer and cardiac treatment facilities so residents don't have to go elsewhere for care.

Sigsbury said the new cardiac catheterization lab unveiled this month required the hospital to add highly paid employees trained in cardiac intervention and radiology.

Effective tool for recruitment

He said the proposed medical school at UC Merced would create a center for medical education and research. It also would be an effective tool for recruiting physicians to establish practices in the valley.

"The students will be here for four years of medical school and then be in residency for three to five years," he said. "If they are in the community that long, they become established socially, they get married and have children, and that is when they stay in the community."

Despite a lack of state funding, the plan to create the medical school by 2020 is considered a realistic goal.

Officials are in discussion with UC Davis to develop a medical education program initially, with students spending part of their time there and doing clinical rotations at facilities in the San Joaquin Valley.

Brandy Ramos Nikaido, a UC Merced spokeswoman for medical school planning, said a study estimated that the valley lost $845 million in health care revenue in 2005 because of people leaving the area for treatment.

"You only need to think about the potential of keeping those dollars in our region when UC Merced has an independent medical school," she said.

Emanuel isn't waiting to get involved with medical education. In July, 15 medical students from Touro University of Vallejo will do clinical training at Emanuel. The hospital is discussing a similar arrangement with a medical school in Arizona.

In Modesto, Doctors Medical Center, Memorial Medical Center and Kaiser Permanente formed a consortium last year to support the Valley Family Medicine Residency Program. The three-year county program trains 30 residents to serve as primary care doctors.

The consortium would like the program to expand and offer other kinds of training.

"We hope to someday have 60 to 80 medical residents in our community," said Denny Litos, chief executive officer of Doctors. "We definitely have to recruit more physicians. A fair amount of the doctors in the community are 55 and over, or 60 and over, and are still practicing."

Doctors serves as a trauma center for the region, receiving injured people from as far away as Yosemite National Park. It's also a center for heart surgery and specializes in caring for premature infants.

In an agreement with Merced County public health and emergency services, ambulances bypass other hospitals in taking heart attack victims from that county to Doctors.

By virtue of an agreement with Stanislaus County, Doctors serves a large indigent population, and it should become more competitive with national health care reform, Litos said.

The reforms will enable tens of thousands of uninsured county residents to buy insurance through an exchange or be covered by the Medicaid expansion slated for 2014.

That should increase hospitalizations and primary care visits from people who have delayed treatment because they couldn't afford to pay medical bills, Litos said.

The legislation includes funding for community health centers.

Doctors is talking with Golden Valley Health Centers about establishing a clinic near the Florida Avenue hospital, which could reduce traffic in the emergency room.

"We have really become a safety net hospital for the region," the CEO said, "and we have a vested interest in finding a medical home for these (nonemergency) patients who come to the ER."

Health reform should create jobs for medical assistants, registered nurses, nurse practitioners, health educators, clerical workers, physicians and health plan employees.

'Bread-and-butter' services to grow

Litos said the growth potential for local hospitals is in the "bread-and-butter" services that the population can support. Babies who need heart surgery or adults needing highly specialized care still will be sent to research hospitals in the Bay Area or Sacramento area.

More patients gravitated to the county after Kaiser Permanente opened its north Modesto hospital in 2008. The hospital has a birthing center, surgical suites and other specialty services for its members in Stanislaus and San Joaquin counties.

But the Kaiser system still sends patients out of the area for cardiac surgery and other types of treatment.

Corwin Harper, senior vice president and Central Valley area manager for Kaiser, said Kaiser takes a read on the economy before developing new services to ensure it has enough insured members to pay for them.

"Everything is predicated on the broader economy and opportunities for economic growth," he said. "If unemployment continues to go higher and employers don't see the area as a place for creating job opportunities, it will have an impact on what we do."

A positive sign would be industries locating in the area with 250- to 500-plus employees, earning good wages and health benefits, or existing companies spinning off new businesses, he said.

"We will make the right decisions, at the right time, to bring certain services here," Harper said.

Ted Matson, vice president of business development for Sutter Health's Central Valley region, expects to see incremental growth of primary health services in Stanislaus County.

Expansion depends on key factors

Modesto's Memorial Medical Center and the Sutter Gould Medical Foundation are key pieces of Sutter's regional network serving Stanislaus, Merced and San Joaquin counties. Expansion will depend on population growth, the aging population, changes in technology and reimbursements for services, he said.

As the baby boomers retire, one would expect an uptick in primary care, emergency room visits and hospital admissions.

The industry also is focused on delivering care more efficiently, which means the system of appointments, referrals, medical records and billings is due for an overhaul.

"People will definitely notice a different patient-care experience," Matson said. "They may be going online to schedule office visits or e-mailing their doctor instead of going to the office."

The industry will need computer technologists to manage electronic records. Matson also sees demand for nurses and physician assistants to work on specialized care teams. Nurse practitioners will be critical to providing services for people insured as a result of the health care reform, he added.

To serve a growing number of patients, hospitals and medical groups will have to compete for skilled professionals sought by other health care providers in Northern California.

Stanislaus County has less-expensive housing, and amenities such as the Gallo Center for the Arts, but Litos is concerned about the budget-cutting of local school districts. Potential recruits always ask about the quality of the education system for their children, he said.

Litos stressed that a strong health system is good for the local economy. "Without a good health care system, you cannot have good economic growth," he said.

Bee staff writer Ken Carlson can be reached at or 578-2321.

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