Possible Merger Divides Staff, Board at Laguna Clinic : Health care: Dispute highlights the painful transitions medical agencies face under county Medi-Cal reform that brings poor patients into managed-care networks.


For better or worse, the Laguna Beach Community Clinic won’t ever be the same.

Powerful forces are sweeping through Orange County, pushing it and other community-based health care agencies to collaborate and consolidate, in some cases dramatically altering the way they have done business over the years.

OPTIMA, the county’s fast-emerging Medi-Cal system for the poor, has some of these independent organizations scrambling to define their futures in the new age of managed care.

The question for the 25-year-old Laguna Beach clinic is not whether it should change, but how. And that is what has pitted two dozen employees against the clinic’s own board of directors.


Over vehement objections from the employees, the board has voted to explore an alliance or merger with neighboring South County Community Clinic in San Juan Capistrano. Board members argue that ties to another nonprofit clinic with local roots--and a strong fund-raising base--are just what the financially shaky Laguna clinic needs.

But many employees favor an affiliation with UC Irvine, which they believe would allow the clinic the benefit of a university’s referrals and resources without sacrificing the clinic’s autonomy.

“It’s kind of creating tension, figuring out what’s the best option for patients,” said Diana Lithgow, a family nurse practitioner and one of the employees challenging the board’s action.

At a meeting last week with the board--packed despite a driving rainstorm--several staff members walked out in disgust, she said.


The dispute highlights the sort of painful transitions medical organizations may be forced to make as Orange County reforms its Medi-Cal system and brings about 300,000 poor patients into managed-care networks.

The new Orange Prevention and Treatment Integrated Medical Assistance system requires that participating physicians, hospitals and clinics form collaborative networks with the overall goal of increasing patient access and reducing costs. Applications for the networks are due Feb. 15.

“We are an agent of change,” OPTIMA spokesman Mike Stockstill said. “Certainly when change comes, you can expect it to bring some level of discomfort; that is inevitable. The goal, then, is to try to manage the change for the ultimate goal of better access and better-quality service.”

OPTIMA does not have a position on whether the Laguna Beach clinic should affiliate with UCI or the South County Community Clinic, Stockstill said.


Robert Cosgrove, designated by the clinic board members as their spokesman, said he is sympathetic to employees, whom he described as unsettled by the clinic’s uncertain future and the sheer pace of decision-making.

But “we are under the gun to move ahead on some of these things,” he said. “I can’t believe how fast these health care (issues) are changing.”

Officials at the South County clinic cautioned that the merger--or affiliation, as some prefer to call it--is not a done deal.

“We’re just taking a look at each other,” said Margot Hughes-Lopez, executive director of the South County Community Clinic. “There is no decision whatever. . . . This should continue a couple of weeks. The pressure we all face is that we have OPTIMA in the offing.”


Lithgow said employees are upset that neither they nor the community were consulted during the board’s deliberations over the clinic’s future.

Because of the time pressure, Cosgrove said, “we have had a whole series of hurry-up meetings, some of which may not have been well-publicized.” But the clinic’s executive director was invited to the meetings, and employees were consulted informally, he said.

Twenty-four employees signed a letter of objection to the merger last month, saying they had anticipated a liaison with UCI, with which the clinic already has a “strong and healthy referral relationship.”

The Dec. 21 letter acknowledged the need for the Laguna Beach clinic to combine forces with other health care providers to meet the requirements of OPTIMA but said that an affiliation with the San Juan Capistrano clinic “does not consider the overall good of our clinic and patients.”


“We are cognizant of the fact that times necessitate a merger or alliance of sorts,” the letter stated. “But we want the Laguna Beach Community Clinic--the model community clinic--to continue in name and services, and not to go defunct and be absorbed by another local community clinic.”

Lithgow said the Laguna Beach clinic employees believe there are certain philosophical differences with the South County clinic. She said the San Juan Capistrano clinic does not have the historical commitment to family planning and HIV services that the Laguna clinic does.

Dr. Thomas Bent, medical director of the South County clinic, acknowledged that it does not have a formal, advertised family planning program. But it does offer a range of primary care services that include family planning, he said. And he said the level of HIV services at the two clinics differs only because the Laguna community has a much larger group of patients.

Bent, who has worked at both clinics, said that the two facilities have many more similarities than differences and that both clinics’ clientele can benefit from OPTIMA’s promise of increased access to specialty care.


“The whole will be much better than the sum of its parts,” he said.

Hughes-Lopez agreed. “It is the opportunity to synergize the very best of what we all do in health care,” she said.