Marshfield Clinic Inc. Business Information, Profile, and History

Company Perspectives

Flexibility has been a key part of the Clinic's philosophy for nearly 90 years. Planning is a continuous process, enabling Marshfield clinic to provide for patient needs--now and in the future--in the most effective way. This philosophy allows Marshfield Clinic to thrive and expand in the rapidly changing climate of health services delivery.

History of Marshfield Clinic Inc.

A not-for-profit corporation based in Marshfield, Wisconsin, Marshfield Clinic Inc. is among the United States' largest private multidisciplinary group medical practices, and the largest in the state of Wisconsin. Marshfield employs more than 720 physicians practicing 86 medical specialties, supported by more than 6,000 other employees. It operates 41 regional medical centers and other facilities in 35 northern, central, and western Wisconsin communities, and also serves much of Michigan's Upper Peninsula. Marshfield owns and operates its own health maintenance organization, Security Health Plan, which covers more than 115,000 people through a network of 26 affiliated hospitals. Through more than 1,200 hospitals, clinics, and other healthcare sites, Marshfield also conducts a number of outreach services programs, such as regional blood banking, off-site physician consultation, mobile echocardiography, and orthotics/prosthetics services. Marshfield Laboratories provides testing services for Marshfield operations as well as for clients across the United States, performing more than 20 million tests each year.

The Marshfield Clinic Education Foundation offers fully accredited residency programs for recent medical school graduates in dermatology, internal medicine, medicine and pediatrics, pediatrics, surgery, and transitional year. Many of Marshfield's physicians hold clinical teaching appointments from the University of Wisconsin-Madison medical school. In addition, Marshfield is involved in research through the Marshfield Clinic Research Foundation, focusing on such areas as rural and agricultural health and safety, human genetics, epidemiology, and biomedical informatics. Another Marshfield research vehicle is the National Farm Medicine Center, devoted to the exploration of the impact of rural and agricultural life on health and safety, such as the effects chemicals used in farming may have on the rural population. Because Marshfield is a non-profit organization, all earnings are invested in the clinic operation and Security Health Plan.

Early 20th Century Roots

The leader among Marshfield's founding physicians was Karl W. Doege, who was raised in Thorp, Wisconsin. Originally a school teacher, he graduated in 1890 from the medical school of what is now known as Case Western Reserve University, based in Cleveland. While taking the train home he was told by a conductor that Marshfield would be an ideal place for a young doctor to begin a practice. It was good advice, given that Marshfield was a relatively young town, established less than 20 years earlier, and was a nexus of railroad lines and the home to Upham Mills, one of Wisconsin's largest lumber mills. Doege soon settled here and began practicing medicine. By 1915 Marshfield boasted 15 physicians, one of which was Doege's assistant, Walter G. Sexton, the son of a local pharmacist. Doege had encouraged the young man to seek a medical education at Johns Hopkins. Following his graduation in 1911 and a Baltimore residency, Sexton was persuaded by Doege to return home to join his practice. Well regarded as a surgeon, Doege also enjoyed a strong working relationship with other Marshfield physicians, including Dr. Hansford Milbee, who had been practicing in town since 1901 and was strong on diagnosis and treatment, and Milbee's young protégé, Dr. Victor Mason, who set up his practice next door to Mason, above the Sexton family's drug store. Mason was also a skilled surgeon, his services in high demand around the state. Early in 1915 Doege broached the idea of a group practice with Sexton and Mason, one in which each participating doctor focused on his area of expertise. Mason told Milbee of the idea and the men began meeting for further discussions.

In April 1916 the four men formally invited the other Marshfield physicians to join them in a group practice and two accepted: Dr. William Hipke, the oldest of the group at 51, who would become the group's eye, ear, nose, and throat specialist; and Dr. Roy P. Potter, who had come to town six years earlier to work with a physician who subsequently died and elected to remain and practice on his own. Potter became the group's first radiologist. Thus, Marshfield Clinic set up shop over the drugstore with Doege serving as the first president. Four more physicians joined the group by 1920, at which point Marshfield formalized the arrangement, establishing it as a charitable trust. Two years later, Marshfield moved into a new building. Under the terms of the trust, each participating physician paid a fee and received one vote at the organization's annual meeting, although they received no equity. In 1924 Marshfield was established enough that the University of Wisconsin included it as part of its first medical preceptor program. Soon the clinic began educating the school's medical students through the program, and in 1928 Marshfield and local St. Joseph's Hospital received approval to maintain a rotating internship program.

Marshfield soon began to experience some turnover in its ranks. Only in his 40s, Mason died in December 1929. Koege passed away three years later and was replaced as president by Milbee, who in turn died in August 1934. Potter became president, and despite persistently poor health, he would lead Marshfield for many years and not fully retire from the practice of medicine until 1959 when he was 80 years old. He would live to be 89.

Marshfield enjoyed steady growth for the first 35 years, bringing in new physicians and adding capabilities, but the entry of the United States into World War II in late 1941 almost led to the dissolution of the group practice three years later. Not only had several of the physicians been called away to serve in the military, medical supplies were scarce due to the war and the clinic was overcrowded. A building addition was sorely needed, but construction was impossible because all available steel had been commandeered for military purposes. Nevertheless, Marshfield managed to hold on and in the post-war years resumed its growth.

Research Foundation Established: 1959

In the 1940s the clinic provided $400 to Dr. Stephen Epstein, a German refugee, to begin dermatology research; this would eventually lead to the creation of a formal research foundation. With Epstein spearheading the effort, the Marshfield Clinic Research Foundation was established in 1959, focusing on farm health and safety issues. In that year, the foundation also received its first federal grant to study Farmer's Lung disease. A few years later work on organic dust toxic syndrome and maple bark disease was added.

By the mid-1950s Marshfield employed more than two-dozen physicians in some 16 specialties. The size of the staff would triple over the next decade, leading to the addition of three more floors to the clinic building in 1956, but Marshfield quickly outgrew this space as well. Because the downtown location made further expansion difficult, Marshfield looked to construct an entirely new facility where Saint Joseph's Hospital was located in the outskirts of town. In 1975 a new 212,000-square-foot facility was opened.

The extra space was used to accommodate the 135 physicians on Marshfield's staff. It would also be put to good use in supporting Marshfield's health maintenance organization, founded in 1971 as the Greater Marshfield Community Health Plan, the first HMO in the state of Wisconsin. It was a joint venture with St. Joseph's Hospital and Blue Cross & Blue Shield United of Wisconsin. The plan expanded in the 1970s, as did Marshfield's clinic, which began opening satellite operations. The first came in 1977 after the city of Mosinee, Wisconsin, had pressed Marshfield to open a clinic practice in the community to replace a public health service (PHS) office that was unable to procure doctors. A year later, sites were opened in Greenwood and Stanley, which had similar problems with their PHS offices. Marshfield's expansion was also aided in 1978 when the state government allowed the organization to self-insure for professional liability.

Growth on a number of fronts continued in the 1980s. Satellite clinics opened in several communities, as start-up operations, mergers with local physician groups, or through the purchase of an existing practice. The Greater Marshfield Community Health Plan ran into trouble in the 1980s, caused by a new computerized claims-processing system that was plagued with problems. This resulted in the HMO losing more than $1 million in 1986. Blue Cross and the hospital wanted to exit the business, and so in 1986 Marshfield took sole control, reorganizing the HMO as Security Health Plan. Marshfield continued to hired more physicians and add new practices, leading to major additions to the main clinic building in both 1984 and 1989. In addition, Marshfield's clinical research efforts expanded. In 1981 the National Farm Medicine Center was established as a program of the Marshfield Clinic Research Foundation. Funded by local contributions, private foundations, as well as the federal government, the Center studied such topics as cancer control among farmers, suicides in the rural population, and the prevention of child farm accidents. Two years later the Community Clinical Oncology Program was established.

In 1991 the Marshfield Epidemiologic Research Center was established to conduct population-based and other epidemiologic research in such areas as infectious diseases, antibiotic resistance, and the prevention of diabetes and obesity. During the early 1990s, Marshfield was responsible for the discovery of short tandem repeat polymorphisms, markers used to resolve population structure. It was a major advance in the study of human genetics. In 1994 Marshfield formed the Center for Medical Genetics, which developed a map of the human genome. To keep pace with its varied research activities, Marshfield opened the Laird Center for Medical Research, dedicated in 1997. In the meantime, Marshfield Clinic continued to add practices and open new satellite sites in Wisconsin during the 1990s.

Blue Cross Sues Marshfield: 1994

Security Health Plan also enjoyed strong growth and proved so successful that it prompted former partner Blue Cross & Blue Shield United of Wisconsin to file an antitrust suit against Marshfield in February 1994. Blue Cross contended that it was unable to compete in central and northern Wisconsin because Marshfield controlled so many physicians it was unable to find enough health providers who were willing to participate in a Blue Cross HMO, except at artificially high rates because of Marshfield's backing. The insurer further charged that Marshfield's virtual monopoly in these markets eliminated incentives to practice quality medicine and that the organization was able to overcharge patients and insurers. Before opting for litigation, Blue Cross, which had decided to reenter the central and north Wisconsin markets, had tried for three years to make an arrangement with Marshfield to use its physicians, but the two sides failed to reach an accommodation. The ensuing court case was keenly watched by all parties in the healthcare field, holding the potential to undermine other rural physician networks or the building of new ones. In January 1995 a jury sided with Blue Cross and found damages of $16.2 million, which because it was an antitrust case were tripled to $48.6 million. Marshfield appealed the verdict to the 7th U.S. Circuit Court of Appeals in Chicago, which agreed that Marshfield impeded competition by illegally dividing markets with a regional HMO, the North Central Health Protection Plan, but the court did not find that Marshfield was an illegal monopoly as Blue Cross contended and, as a result, the damage award was overturned. The matter then worked its way to the U.S. Supreme Court, which in March 1996 opted not to review the appeals court decision. Upon this news, Marshfield's president, Richard Leer, portrayed the Supreme Court's refusal to take the case as an important decision for the future of health care, claiming, "Health care providers can continue to develop integrated health delivery systems in rural areas. It is a victory for the residents of central and northern Wisconsin and for rural America." Marshfield's legal woes did not end just yet, however. It also had to contend with consumer civil suits that arose out of the Blue Cross litigation. A settlement in which Marshfield admitted no guilt was finally reached in October 1997.

Into the 21st Century

Finally free of legal entanglements, Marshfield was able to grow its multifaceted operations into the new century. A second genetic research center, the Personalized Medicine Research Center, was established in 2001 to pursue research on how an individual genetic profile can be tailored to detect, prevent, and treat diseases. This program and the Center for Medical Genetics were then merged in 2004, creating the Center for Human Genetics. Moreover, Marshfield launched a fifth research center, the Biomedical Informatics Research Center, added in 2005 to pursue work in the field of medical informatics, the use of structures and algorithms, via computers, to improve health care. In the meantime, in 2003, the original clinic operation continued to grow, leading to another addition to the clinic building, completed in 2003.

Principal Divisions

Marshfield Clinic Research Foundation; Marshfield Clinic Education Foundation; Marshfield Laboratories; Security Health Plan.

Principal Competitors

Blue Cross & Blue Shield United of Wisconsin.

Chronology

• Key Dates
• 1916 Marshfield Clinic is founded.
• 1926 Clinic building is completed.
• 1959 Marshfield Clinic Research Foundation is established.
• 1977 The first satellite clinic opens.
• 1986 The Security Health Plan begins.
• 1997 The Laird Center for Medical Research opens.
• 2005 Biomedical Informatics Research Center is established.