Two northwest Wis. VA clinics close over funding problems

The two clinics that sit idle now opened to much fanfare this summer and fall. The VA said, and local veterans agreed, the facilities in Hayward and in Rice Lake would make it much easier for area vets to get basic health care. No longer would they have to travel long distances to VA facilities in places like Duluth-Superior or the Twin Cities.

But without warning, the clinics closed this week.

VA spokesman Ralph Heussner says the locked doors are an unexpected disappointment.

"It's an inconvenience and we apologize for that," says Heussner. "The reason we set the clinics in those communities is to provide service so the veterans would not have to travel long distances."

Heussner says the VA is looking into several primary care options for more than 900 veterans who've been using the Hayward and Rice Lake clinics.

As for the long term, Heussner says the VA is committed to opening clinics in the two towns. And this time, he says, the clinics will not be contracted out.

"My response is that the government has acted in bad faith."

"The plan is for these clinics to become VA-operated clinics. As a matter of fact, within a day or two we will begin advertising for staff in those communities to become VA employees, and to operate a VA clinic in each of the communities," says Heussner.

Heussner says Corporate Health and Wellness, the company under contract to run the clinics, was having difficulty meeting its financial obligations. But he says the company had never threaten to close down the clinics.

Heussner says the VA informed the company it would not renew its contract which expires in June 2008.

The CEO of Corporate Health and Wellness, Mary Cheek, acknowledged the clinics ran into significant financial problems. But she says it's not her company's fault that startup costs exceeded expectations. Cheek blames the VA for the shutdowns.

"My response is that the government has acted in bad faith," says Cheek.

Cheek says her company spent hundreds of thousands of dollars to build, staff and equip the clinics.

When she approached the VA for more funding, she says the VA decided not to renew her contract, making it impossible for her company to recoup its startup costs.

"We were led to believe that we were providing wonderful services," says Cheek. "After we asked for additional money, they said they would terminate our contract. They're leaving us in a bind."

Cheek says she'd be willing turn over her clinics to the VA, if the VA would pay her a fair price for what her company spend building them.

The VA says federal law prevents it from discussing any details of negotiations with the contractor.

Navy veteran Jim Gustafson, who lives in northwestern Wisconsin, was surprised and disappointed to hear the VA clinic near his home in Hayward was closed.

"In fact, I was just there about two weeks ago and everything was good," he says. Gustafson says it's fine with him if the VA follows through on its pledge to open its own clinics, with its own staff, in Hayward and in Rice Lake. But he wants the clinics up and running again as soon as possible.

"I would really be hard pressed if they didn't reopen it," says Gustafson. "To go back to what it was, after it being here and so convenient. That would be rough."

While it's looking for a permanent solution, the VA says it's also trying to find temporary space for clinics in Rice Lake and in Hayward. It's also considering using a mobile clinic van and temporarily shifting patients to other community-based VA clinics.

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