As Clinic Reduces Fees, Director Says He's Optimistic About Improving Finances

Feb 21, 2018

Iliuliuk Family and Health Services introduced a new fee schedule Jan. 1. Director James Kaech said rates have dropped as much as 40 percent.
Credit Laura Kraegel/KUCB

Unalaska’s cash-strapped clinic has undergone a slew of changes since James Kaech became director.

Six months later, he’s cautiously optimistic that its financial situation is finally improving.

"Our cash flow has been very good," said Kaech. "We haven’t had to ask for any funds from the city, and I don’t think we will."

Kaech successfully lobbied the City Council last year for a $500,000 emergency grant, but he hasn’t had to use it. He said that fact shows how the recent overhaul at Iliuliuk Family and Health Services is working.

Since August, the clinic has hired a CFO, adopted a new billing system, and forgiven more than $1 million in overdue payments.

Kaech's strategy is to bring Unalaskans back to the clinic, so patient volume can drive revenue as opposed to high rates. That’s why he introduced a new fee schedule Jan 1.

"We reduced our fees between 20 and 40 percent across the board," he said.

Asked for an example, Kaech pointed to the reduced cost of a “level-three” visit. The label refers to mid-level primary care — something more serious than a fever, but less than a broken arm.

"For an office visit for a level-three established patient, we used to charge $312," he said. "Now, it’s down to $217.52. That's almost a $100 difference."

Kaech said the change has brought Unalaska’s fees in line with other clinics around the state, but it’s also coincided with increased rates at the dispensary.

Now, most medications cost $33.50, about twice the previous amount. Kaech said the hike was necessary, because the clinic runs a dispensary — not a pharmacy— and can’t bill insurance.

"This [increase] at least covers the cost, so we can keep the service available," he said.

The clinic is still exploring the possibility of partnering with a telepharmacy. Kaech said that could help bring down the cost of drugs while allowing the clinic to recoup costs.