From $18 In The Back Of A Dealership

Dr. Rick Nielsen used to be a big-city guy.

The Midland native graduated with a bachelor’s degree in biochemistry from Michigan State University, worked for the Food and Drug Administration and the National Institutes of Health in Washington, D.C., earned his medical degree from Northwestern University and did his residency in Chicago, where he lived on the famed Magnificent Mile.

But when he decided to start practicing medicine in 1981, Nielsen opened an office in Benzonia, in the back of a car dealership.

“I wanted to practice in a rural area,” he said. “I didn’t want to get lost in the big city.”

That didn’t mean Nielsen lacked professional ambition. Today he’s the managing partner of Crystal Lake Health Center, the largest primary care practice in northern Michigan with 12 locations in Antrim, Benzie, Grand Traverse, Manistee and Wexford counties.

Another location on Long Lake Road near Traverse City West High School is expected to open in January. And the health center is planning to buy 1.5 acres of land near the new Meijer complex in Williamsburg for a 14th clinic.

The clinics employ more than 100 people, including 15 physicians family practice, internal medicine and pediatric physicians, and had revenues last year of $12 million. They are projected to handle 100,000 patient visits this year.

Nielsen, 66, stopped seeing patients about 18 months ago and now manages the growing operation full time.

It’s a huge leap from the days when he was a sole practitioner in an office behind the service bays of Harold Case’s Chrysler-Plymouth dealership. Nielsen said Case, whom he knew as a board member at Paul Oliver Memorial Hospital, offered the space.

Back then, Nielsen charged patients $18 for an office visit. Patients were given a piece of paper stating the diagnosis and treatment that they submitted to Medicare or their insurance companies for payment. He had little paperwork, which has since become voluminous for many physicians.

“I had one person and a pegboard (accounting) system,” he said.

Three Benzie County physicians started Crystal Lake Health Center in 1992. Nielsen joined the operation in 1997 and was immediately named president of what was then a financially troubled operation.
The single-location clinic wasn’t generating enough revenue to pay rent and other bills. And overall costs were too high, Nielsen said.

“The way we got out of it was to pay ourselves less, pay our bills and pay more attention to costs,” he said. “It was basic business sense.” Munson Healthcare also provided some financial assistance.
Sensing a need for more health care services, Nielsen decided to build a larger facility. But his growth plans got off to a rocky start. The frame of a new 14,000 square-foot building the clinic was constructing to replace its rented space was blown down in an 80 mph wind storm.

“We had to start all over again,” he said.

Healthy Clinics

Nielsen attributes the clinics viability to its ownership structure and partnering with local hospitals to provide some services inside the clinics.

“Our independence is the key to our success,” he said. “We have a board of physicians who own (the clinics). “We make all the decisions. And we partner with local hospitals to provide quality care for our patients.”

“Quality care” and “productivity” are words Nielsen often uses to describe the health centers’ business philosophy. An efficient back-office staff that handles complex paperwork frees up physicians to see more patients.

The clinics also implemented electronic patient records about 15 years ago, the first to do so in northern Michigan, Nielsen said. The digital records also help to increase operational efficiency.

“You have to provide high quality services, create happy patients and do it in a cost-effective manner,” he said.

The clinics’ efficiencies also allow them to profitably treat Medicaid patients, which Nielsen said many physicians in the area won’t see because of low government payments. Medicaid is a federal program, administered by the states, that pays for health care of low-income patients.

About 40 percent of the clinics’ patients are seen on the same day they ask for an appointment. Clinic staffs hold a weekly “morning huddle” to discuss issues with patients they will see during the week.

‘Coordinated Care’

Treating the whole patient to improve his or her health is a growing trend in health care, Nielsen said. In his Manistee location, for example, patients have access to physical health, mental health and substance abuse services under the same roof.

“Coordinated care is the big buzzword in health care,” Nielsen said.

The Affordable Care Act also is pushing providers to improve patient health outcomes, not just treat symptoms.

One way Crystal Lake Health Center does that is by being a Blue Cross Blue Shield of Michigan-certified Patient-Centered Medical Home. It’s a care model in which a physician-led team provides for and coordinates a patient’s complete health care, including primary care, hospitalizations and long-term care.

“Primary care physicians should be in the know about everything going on” with their patients, Nielsen said.

One of the challenges of running a rural health clinic organization is recruiting physicians and other health care professionals. Nielsen said he must compete with larger health care systems that can pay higher salaries, in part because they receive higher Medicare reimbursements.

That’s a major factor for health care providers in northern Michigan, which has a large retiree population. In Benzie County, for example, 24 percent of the population is 65 years and older.
Nielsen said Crystal Lake Health Center had been a federally designated rural health clinic, which qualified it for larger payments from Medicare to treat patients. But he said he dropped out of the program in 2006 because of increasingly onerous federal rules and regulations.

Nielsen has no plans slow down anytime soon. In addition to running his growing number of clinics, he operates a 35-acre beef cattle farm with a view of Betsie Bay near Frankfort. Nielsen also is a long-time member of the Crystal Lake Township Board of Trustees and is seeking reelection this fall.

“As long as I’m healthy, I’m going to keep going,” he said.