The Rinehart Clinic (TRC) is a private, (as opposed to public), nonprofit organization, a 501 ( c ) 3 corporation. Because it is a private organization, board members are selected by current board members, rather than elected from the community at large. This assures board members are there because they want to support the mission of the organization, not because they are opposed to it.
TRC is located in Wheeler, OR, in north Tillamook County. Due west of Portland, as the crow flies. Though Wheeler, like most coastal towns is small, only 450 souls, the drawing area stretches to Tillamook in central county, and the clinic maintains over 2,000 active records.
Harvey Earl Rinehart, M.D., came to Wheeler with his bride Ella in 1913, after graduating from the University of Oregon Medical School. His son Robert E. Rinehart, M.D. and daughter-in-law Dorothy White Rinehart, M.D., my parents, followed him there in the early '40's. In 1950 there were five physicians practicing in Wheeler, in 1953 a new hospital was constructed, and Wheeler enjoyed some of the best rural medical care available in America. This was "Once upon a time."
In 1965 Medicare was enacted, clearing the way for medical care to our nations seniors. Then in the early '80's, in an attempt to put a brake on the escalating costs of hospitalizations, came the DRG's, or Diagnostic Related Groups. DRG's limited reimbursement to hospitals based on diagnosis. By 1989 the hospital in Wheeler was broke and closed, as most of the patients there suffered from Arthritis, a diagnosis not often meeting the DRG requirements for reimbursement. After attempting to maintain local medical care for years, the last of the physicians left in 1990. In 2003 the local Health District finally paid off the residual hospital debts.
Tillamook County General Hospital (TCGH) graciously stepped in and hired locum tenens physicians, who would rotate in and out of the community every three months. In the summer of 1992 they were seeing seven patients a day. Most locals avoided medical care, waiting for some permanent staff.
Meanwhile in the winter of 1990 I was in my 13th year of private medical practice in Prineville, Or., and also in the U.S. Army Reserves, when Desert Storm I erupted. I was called up on December 6, 1990, and returned May 1, 1991. It was time for a change. I did emergency medicine in Tacoma, Astoria and Seaside for a year while my wife finished her nurses training. Then in July of '93 I took on the job at the Wheeler Clinic, an employee of TCGH. By September visits were up to 21 a day. After a year, we were eager to continue, however working for a hospital wasn't working for the hospital or for us, and it became clear another arrangement was necessary.
At age 47 I was not keen on borrowing the cash it would take to start another clinic. Also I knew there would be a lot of people in the area who could not afford health care, and some of them were friends and acquaintances I had grown up with, their parents and their children.
An ethical dilemma arose. I was not anonymous in my community. I could not drive away from my clinic in the city at the end of the day to my home in the suburbs. Nor could an ambulatory care rural health clinic survive financially if it provided free and reduced cost care to all community members in need. Furthermore I couldn't imagine turning away those patients whom through their work and taxes supported the institutions of higher learning I had access to and benefited from because of my family and advantages it afforded.
Fortunately in Wheeler there resided a retired college president, Richard Stine, Ph.D. He had spent 40 years in non-profit institutions. While pondering this dilemma I was introduced to Dick Stine, for whom the solution was obvious and simple. "You form a nonprofit," he told me. "But first you get a community advisory group together, from whom the board of directors will eventually be selected," he added. "After all, Healthcare Delivery is a community responsibility."
By the fall of '93 we had a community advisory group of nearly 20 individuals, and by winter we had pledges from 6 community members to support borrowing $100,000 to start an independent practice. I resigned from Tillamook Hospital's employ 31 December 1993, and opened my practice in the same building and offices January 2, 1994. The transition was seamless. The bank loan was to me, (with pledges far exceeding the principal), not the nonprofit, as the nonprofit entity had yet to be formed.
The IRS grants 501(c)3 status, and without it donors cannot deduct donations off their income tax. It took them two years to finally grant the nonprofit status, however by January of 1996 we were a full-fledged nonprofit entity, and have been since.
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