Obamacare Spurs Health Firms to Contract, Grow

143

Two South Bay health care providers are taking action to remain competitive in the era of national health care reform.

MemorialCare Health System, an operator of hospitals and physician groups in Orange and south Los Angeles counties, is expanding into the health plan business. To make the state licensing process easier, it is acquiring some of the operations of Universal Care of Signal Hill, a small health plan.

Universal is keeping two Medicare specialty care businesses that it hopes to grow. One manages the care of poor seniors; the other serves seniors and other Medicare patients with behavioral health problems.

Barry Arbuckle, chief executive of Fountain Valley-based MemorialCare, said the move makes sense for both companies. Being able to offer integrated health care that links hospitals, doctors and health plans should result in higher reimbursement rates under health care reform. Universal will be able to focus on services where it has less competition.

“It’s the next logical step for both our companies,” said Arbuckle, who expects to have the deal closed this spring. Terms were not disclosed.

MemorialCare’s local operations include Long Beach Memorial Medical Center, Miller Children’s Hospital Long Beach and Community Hospital Long Beach. The company has formed a subsidiary called Seaside Health Plan, which mostly will target people who are beneficiaries of Medi-Cal coverage for lower-income and disabled Californians.

Seaside’s early focus will be on participation in a state demonstration project on managing the care of children with debilitating diseases and chronic conditions. The project is being sponsored by the state’s Children’s Services agency.

MemorialCare executives anticipate that Universal’s administrative staff and 14,000 patients included in the transaction will ease its license application to the California Department of Managed Care, which regulates health plans in the state.

The company took a similar approach two years ago in building its physicians group unit. It acquired two existing practice groups and used them to expand operations in its markets throughout the South Bay and Orange County.

“Like a lot of providers, we have considered adding a full-service health plan to our integrated care business,” Arbuckle said. “But rather than apply for a license and then build the operations, it made more sense to take advantage of the expertise Universal already has.”

Universal, which sold off much of its primary care business in the South Bay in 2006, will concentrate on two business lines run by its remaining 100 employees. One unit manages the care of patients who qualify for both Medicare and Medi-Cal. The second is Brand New Day, a Medicare health maintenance organization for people with severe, chronic mental health illnesses such as biopolar disease and schizophrenia.

“There are really only two or three companies in the nation that offer what we do with Brand New Day,” said Jay Davis, Universal’s executive vice president. “Now we can finally focus on building our core business into something larger.”


Valley CEO Moves

ImmunoCellular Therapeutics Ltd. in Woodland Hills has named Andrew Gengos chief executive. Gengos, 48, also was named president and will have a seat on the company’s board. He is the former president-chief executive of Neuraltus Pharmaceuticals in Palo Alto and was previously in charge of Amgen Inc.’s strategy and corporate development.

The move comes four months after the resignation of Manish Singh, the company’s first chief executive. ImmunoCellular has been licensing its drug-screening technology to larger drug makers to raise money for development of its cancer treatments. Its vaccine-based experimental treatment for brain cancer is in midstage clinical trials.

West Hills Hospital announced that it has named Doug Long chief executive of the 225-bed community hospital campus, which is also home to the renowned Grossman Burn Center.

Long previously served as chief operating officer at HCA’s Riverside Community Hospital in Riverside County. He earlier was vice president of operations at HCA’s Sunrise and Sunrise Children’s Hospital in Las Vegas.

He will take over Jan. 1 from Beverly Gilmore, who recently announced her retirement, effective Dec. 31.


Provider Expands

U.S. HealthWorks Medical Group, a Valencia-based company that operates more than 170 occupational medical and work site clinics in 15 states, announced it is entering the Wisconsin market with the acquisition of four health care centers and two work sites from Sensia Healthcare of Milwaukee.

HealthWorks facilities offer a range of occupational health care services, including diagnosis and treatment for injury and illness, preventive services, pre-employment and postoffer exams and screenings, and return-to-work rehabilitative care.

Staff reporter Deborah Crowe can be reached at [email protected] or (323) 549-5225, ext. 232.