Keck Medicine has been growing. A lot.

The medical enterprise arm of USC has seen in-patient volume at its three hospitals rise by 69 percent since 2011, and revenue more than doubled from $600 million in 2013 to $1.3 billion last year.

The organization has recruited new faculty and new management (including its first chief operating officer last month), and developed a network of satellite clinics and physician practices in locations from Orange County to Bakersfield.

“One-third of our patients come from 90 miles away,” said Shawn Sheffield, chief strategy and business development officer.

That’s significant for Keck’s 401-bed acute-care hospital in Boyle Heights, which doesn’t have an emergency room or a delivery ward – two areas that usually bring a lot of traffic to hospitals.

The medical center instead focuses on specialized, complex care such as brain surgery and organ transplants, and relies on patients coming from its clinics and physician practices to take advantage of those services.

All this growth and change at Keck has happened right as the Affordable Care Act has been shaking up health care. Case in point, the merger frenzy enveloping the country’s largest health insurers – something Keck executives are keeping an eye on.

“The question is: What’s the impact in certain markets if there’s only one payer?” said Keck Medicine Chief Executive Thomas E. Jackiewicz. Medical providers might gain efficiencies when dealing with one insurer, but reimbursements could also drop as that payer gains more clout.

Jackiewicz said he doesn’t think insurer consolidation will be as much of an issue in Southern California because it has a diverse payer mix, but it’s certainly a trend to watch.

On top of dealing with all that industry change, Keck’s recent growth has come with challenges. Acquiring and opening clinics and practices also meant unifying these diverse groups under USC’s brand. That included getting 23 physician groups, essentially two dozen individual companies, on the same page.

Additionally, expenses have risen and the organization has had to make tough cuts. Earlier this spring, Keck Medicine announced the elimination or restructuring of 201 positions.

“That’s never a place any organization wants to be in,” said Chief Operating Officer Rodney B. Hanners. He added the system is examining supply and demand, trying to better match “the right people in the right place at the right time.”

Hanners, who’s also chief executive of Keck Hospital and USC Norris Cancer Hospital, said other streamlining efforts include reducing supply pricing, better communicating to payers what health care has been provided to patients for billing purposes and improving payment tracking.

Growth Spurts

Pasadena Bioscience Collaborative is feeling optimistic about the local life-science startup scene. So much so that the incubator will be taking over an additional 7,000 square feet at its 2265 E. Foothill Blvd. headquarters, bringing its total footprint there to 13,000 square feet.

“We’re very bullish about Los Angeles as a place to grow companies like this and Pasadena in particular has lots of resources,” said PBC President Bruce Blomstrom, nodding to support from the city, the proximity to faculty and students from Caltech, and interns from Pasadena City College and Cal State Los Angeles.

The collaborative currently hosts a total of 20 bioscience firms, offering benches and shared offices and equipment for $1,300 a month.

The boost in square footage means PBC can rent space to an additional 25 startups while shuttering a 3,500-square-foot office it has nearby and consolidating businesses from that site at the headquarters. The incubator will still maintain an additional 4,000-square-foot location on Altadena Street.

“There won’t be 25 companies overnight, but over the next three to four years,” Blomstrom said. “There haven’t been that many laboratories for bioscience and chemistry available on a per-month basis, but we are doing that and have been doing it for the last 10 years.”

PBC expects to open the additional space at its headquarters sometime this fall.


Heal, a Santa Monica company that arranges on-demand physician house calls through an app, is taking on Orange County. The firm is rolling out its services behind the orange curtain, using a portion of the $5 million seed round it recently raised. … Long Beach’s Molina Healthcare Inc. is moving into Chicago and expanding in Florida. The managed-care provider, which continues to gobble up Medicaid business across the country, last week announced the acquisition of Medicaid contracts in Florida’s two southernmost counties. The firm also revealed an agreement to buy certain assets of MyCare Chicago’s Medicaid business. Notably, Molina will take over MyCare’s Medicaid members in Cook County, signaling the Long Beach firm’s first foray into the Windy City.

Staff reporter Marni Usheroff can be reached at or (323) 549-5225, ext. 229.

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