A non-profit health care provider will open a new office by Oct. 1 on the west side of Ann Arbor, expanding its service area as its client base shifts to more uninsured patients.

The new facility for Packard Health marks its first expansion in its 36-year history in Ann Arbor.

The move also expands locally the family physician model of care, which is gaining favor in the medical sector for its advantages in controlling health care costs by using wellness techniques and a single-provider continuum.

“There is a shortage of family practice doctors,” said Kimberly Kratz, executive director of Packard Health. “People aren’t going into that specialty.”

Yet that model has been the core structure of Packard Health since Dr. Jerry Walden founded it in 1973.

And its success at Packard Health is helping power this year’s expansion, since insurers - most recently Blue Cross Blue Shield of Michigan - are now expanding payment options under the patient-centered medical home model.

Fundamentals under that model include electronic prescribing, continuity of care and extended hours.

“It wasn’t a stretch for us to meet those requirements because we’ve been doing it a long time,” said clinic spokesperson Deborah VandenBroek.

Two physicians will practice from the new office, which will include eight examination rooms, space for chronic disease management and mental health services, and a food pantry.

The office on North Maple Road is being leased from the St. Joseph Mercy Health System, which runs an adjacent urgent care canter, VandenBroek said. The St. Joseph system is helping offset the startup costs, estimated at about $600,000 for the first year.

The expansion sets Packard Health toward fulfilling its goal of doubling patient volume over the next decade.

The clinic doesn’t turn anyone away - but its ratio of insured to uninsured patients is shifting toward more clients who do not have coverage. About 45 percent are now insured.

That financial pressure is prompting Packard Health to seek more funding, including grant money, and it’s applying for status as a federally qualified health clinic.

The expansion, VandenBroek said, gives more people in the county, both insured and not, increased access to medical care.

The access means that Packard Health will work with more Westside groups - like Peace Neighborhood Center and public housing neighborhoods - to build awareness of its services, such as having Spanish-speaking providers.

But it also means that it will market its services to clients who have insurance, among them people who may be used to more traditional practices but would value a change to the patient-centered medical home model.

Health systems across Michigan have cut staff and stopped expansion plans. That includes a late-2008 hiring freeze of non-patient care positions at the University of Michigan Health System.

The expansion is a “bold step” VandenBroek said, considering the economy. But, she added, “It is a viable business model.”

Contact Business Director Paula Gardner at (734) 623-2586 or by email.