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SONOMA COUNTY - A consortium brought together to provide a long-term structure for the county's 71-year-old residency program has gone back to the table after two years of efforts recently hit a major funding roadblock.

Meanwhile, members of the consortium remained committed to doing their part.

"We hope to be able to continue to help provide the training of the residents supplied by more than two dozen of our physicians, both in the classroom and through resident rotations," said Kaiser Permanente Santa Rosa Medical Center Physician in Chief Bob Schultz.

"It is disappointing that a very creative partnership meant to ensure the future of this important program could not be viable from a financial perspective at the end of the day," said Sonoma County Department of Health Services Director Rita Scardaci, who also serves on the group's board. "But I think that it is still possible that the spirit and interest that created this collaboration could continue with another function. What that role might be is yet to be seen."

The Santa Rosa Family Medicine Consortium, comprised of leaders from the area's largest health care organizations and governing bodies, was created in early 2007 with the ultimate objective to take over fiscal sponsorship of the Santa Rosa Family Residency program.

At that time, the program's sponsor, Sutter Medical Center of Santa Rosa, was reporting program deficits in the millions and needed to find a broader-based financial structure for the program that has provided local doctors since 1938.

Through meetings with community partners, Sutter decided to pass the responsibility on to a newly created consortium including the medical center and Sutter Medical Foundation-North Bay, St. Joseph Health System Sonoma County, Kaiser Permanente, the county Department of Public Health, Southwest Community Health Center and UCSF.

Over the course of two years, the group registered as a nonprofit, created a five-year business plan, received Board of Supervisors approval and planned to go live Sept. 1, 2009, as the chief fiscal agent. But on June 18, it was decided that an unanticipated Medicare rule change would make the consortium's business plan unviable, and it was back to the drawing board.

"We are going to be meeting weekly to try and figure out the best thing to do now," said St. Joseph's-operated Memorial Hospital Chief Medical Officier and consortium board member Gary Greensweig. "We never really expected this to happen, but it does not reduce our interest in seeing the program successful and we hope to continue as an active member of the board."

Soon, the group will have to go back to the Board of Supervisors to reverse its October 2008 approval of its five-year plan and transfer of sponsorship.

In that plan, Kaiser agreed to supplement Sutter's funding for the program by about $2.7 million in the first year and increasing to $2.9 million by 2011 and $3 million by 2013. Also, Kaiser would share Sutter's role as a major inpatient care training site by 2011.

But the Medicare rule change said that if the consortium accepted Kaiser's revenue, which would result in Sutter paying less than 90 percent of resident salaries, the federal agency would discontinue graduate medical education payments, eliminating more than half of Sutter's $4 million annual revenue source for the program.