Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Colleen Chawla, Chief, San Mateo County Health
Chester J. Kunnappilly, MD, Chief Executive Officer, San Mateo Medical Center
Subject: Agreement with Scott Oesterling, MD, Inc. to Provide Obstetrics and Gynecology Services
RECOMMENDATION:
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Adopt a resolution authorizing an agreement with Scott Oesterling, MD, Inc. to provide obstetrics and gynecology services, for the term of June 1, 2025 through May 31, 2028, in an amount not to exceed $10,692,013.
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BACKGROUND:
San Mateo County provides obstetrics and gynecology services in emergencies at San Mateo Medical Center’s (SMMC’s) emergency department, and on an outpatient basis at the SMMC’s outpatient clinic, the County’s Coastside clinic, and the County’s Fair Oaks clinic. The County also provides physician services to support labor and delivery services for all County and South County Community Health Center, Inc. dba Ravenswood Family Health Center (Ravenswood) patients who deliver their babies at Lucile Salter Packard Children’s Hospital at Stanford (Stanford). The County has historically provided financial support for the physician services at Stanford for financially vulnerable patients dating back decades. The primary reason for arranging for physician coverage at Stanford is due to the fact that SMMC lacks the physical facilities and space to compliantly provide labor and delivery services within a dedicated labor & delivery unit. Since 2011, Scott Oesterling, MD, Inc.’s group of physicians (the Oesterling Group) has provided OB/GYN services at the above-listed locations to ensure that patients are not split between health systems but instead are cared for by a team of doctors who work well together and have ready access to each patient’s medical history.
DISCUSSION:
Over the three-year term of the agreement, the Oesterling Group will provide 5,444 four-hour outpatient clinics at SMMC, Coastside and Fair Oaks. The Oesterling Group will also cover 452 four-hour GYN surgery blocks at SMMC. Unrestricted on-call coverage for County patients needing emergency services will be provided 24 hours per day every day including all County holidays. Restricted on-site in-person coverage will be provided at Stanford so that an Oesterling Group physician is ready 24 hours per day including all County holidays to accept all County and Ravenswood patients for labor and delivery. Finally, Dr. Oesterling will provide up to 30 hours per month of medico-administrative leadership at SMMC as the Medical Director of Obstetrics and Gynecology. It is estimated that it will require approximately 8.5 full-time physicians to provide approximately 32,350 hours of the patient care indicated at the aforementioned locations over the agreement’s term. The schedule of coverage is not materially changing from the previous agreement. Variations in clinic hours are driven mostly by the occurrence of County holidays on the calendar year to year.
The rates in the new contract are within fair market value according to VMG Health, a nationally recognized medical services valuation firm that relies upon multiple industry-standard provider compensation surveys and aggregates that data.
County Attorney has reviewed and approved the resolution and agreement as to form.
The resolution contains the County’s standard provisions allowing amendment of the County fiscal obligations by a maximum of $25,000 (in aggregate).
It is anticipated that C-section rates will be at or below the national average 100% of the time during the term of the agreement.
PERFORMANCE MEASURE:
|
Measure |
FY 2025-26 Projected |
FY 2026-27 Projected |
|
Percentage of time that C-section rate will be at or below national average during the term of the agreement |
100% |
100% |
COMMUNITY IMPACT:
The Oesterling Group’s continued obstetrics and gynecology coverage will positively impact equitable health outcomes because delivery of OB/GYN services at SMMC and labor and delivery services for County and Ravenswood patients at Stanford addresses community need. Demographically, within the past 18 months, the largest cohorts of specialty care patients at SMMC were female (52%), Hispanic or Latino (63%), and primarily Spanish-speaking (55%). SMMC strives to eliminate bias in the medical profession by providing culturally competent training to its physicians and by following up with patients to ensure that they continue to have access to specialized care. SMMC specifically tracks physician satisfaction survey results and requires the Oesterling Group physicians to meet with SMMC and discuss patient feedback to improve patient satisfaction and remove potential barriers to care.
FISCAL IMPACT:
The term of the agreement is June 1, 2025 through May 31, 2028. The amount of the agreement is not to exceed $10,692,013 for the three-year term. Funds in the amount of $3,564,005 are included in the SMMC FY 2024-2025 Adopted Budget. Funds in the same amount will be included in SMMC’s budgets for future years, covering the services through May 31, 2028.
The payment provisions and levels of services in this contract differ from those of the previous contract. The total value of the new contract represents a 15% increase compared to that of the previous contract.
The payment provisions and levels of services in this contract are higher than the previous contract due to the threat of multiple physicians leaving the Oesterling Group and the need to keep the group intact, as physician departures would not be filled cost-effectively by relying upon temporary locum tenens placements. Even after the increase, the estimated compensation per full-time physician under the proposed arrangement is $419,295, an amount that is reasonable and well within market for full-time OB/GYN physicians.
Expenses at SMMC are covered by fees for services or third-party payors whenever possible. The portion of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full costs of care is covered by the County’s General Fund contribution to SMMC and is within the existing annual appropriation.