Latino Health Care Taking Back Route in Change to Public Status
Health Care
by Laurence Darmiento
L.A. has another public company, almost.
Latino Health Care, a growing individual practice association with big expansion plans, has nearly completed its reverse shell merger, a move that next month will transform it into a public company.
Under the reverse shell process, a private company seeking to go public takes over a dormant public company, a cheaper alternative to an IPO for smaller firms. In this case, the company being taken over is JNS Marketing Inc. of Colorado, which trades over-the-counter.
Long Beach-based Latino Health, which as its name suggests is a physician management company that caters to Latino patients, is going public to help finance expansion plans in California, other states, and the border regions of Mexico.
Prior to Sept. 11 it sought to raise $5 million in a private placement it was pursuing, along with the reverse shell, to finance a tripling of its 30,000 patient membership over the next 18 months.
But since then the company has pulled back. It now wants to have $1.3 million raised at the end of this month, and then raise the difference over the next few months.
“We are talking to at least three major investors and three smaller ones,” said chief executive Jose Gonzales, a co-founder. The company will be closely held by Gonzales and co-founder Dr. Roberto Chiprut.
The company completed its takeover of JNS Dec. 15, after purchasing 3.3 million shares of its common stock, but still needs a stockholder meeting on Feb. 28 so it can reincorporate the company in Nevada and wrap up other loose ends. It also needs a new stock symbol.
Quality Care
The announcement that California’s big HMOs plan to start rewarding physicians groups based on quality of care could be less far-reaching than advertised.
First off, physician group participation is voluntary. As for cost reduction, any bonuses insurers would pay likely would come from the premium hikes insurers are currently extracting from employers.
The plan, which isn’t expected to kick into high gear until 2003, involves Aetna Inc., Blue Cross of California, Blue Shield of California, CIGNA Corp., Health Net Inc. and PacifiCare Health Systems Inc. It is being led by the Integrated Healthcare Association, a leadership group of state health plans, physician groups and health systems. s.
Behind the effort are growing concerns over medical errors managed care or not.
A seminal 1999 study by the Institute of Medicine found that more people around the country die from medical mistakes in hospitals each year than from highway accidents, breast cancer, or AIDS. That’s at least 44,000, but could be as high as 98,000, according to the federal institute, which called for government, industry, consumers and health providers to develop strategies to improve health care at all levels.
Shooting Stock
STAAR Surgical Co.’s stock is shooting up after a plunge last year that saw it lose nearly 90 percent of its value.
The Monrovia-based developer of implantable contact lenses and other optical devices has seen its stock rise from a low of $1.55 in September to $4.50 last week, following settlement of a lawsuit with Canon Inc., its partner in Japan in October.
It also has received a series of regulators’ approvals to begin either marketing or testing new products. Just this month, the U.S. Food and Drug Administration issued conditional approval for the company to begin testing an implantable toric contact lens that corrects for astigmatism, a condition in which the lens of the eye is distorted.
Staff reporter Laurence Darmiento can be reached at (323) 549-5225 ext. 237 or at
[email protected].
Hospital Check-Up
UCLA Medical Center, Cedars-Sinai Medical Center, Glendale Memorial Medical Center and other large, private regional hospitals are among the L.A. standouts in a quality of care survey released last week.
The hospitals were among dozens of local hospitals that participated in a survey conducted by The Leapfrog Group, a consortium of Fortune 500 companies and others formed in 1999 to address the problem of preventable deaths in hospitals.
The survey was the first major initiative by the group, which hopes the results will prompt hospitals to improve, consumers to choose wisely and insurers to move patients to better performing facilities.
The survey measured several major areas the group contends is associated with quality of care: whether hospitals had computerized systems for ordering prescriptions; the use of special doctors to oversee critical care, the number of high-risk babies cared for, and the number of various high-risk surgical procedures hospitals performed. (Higher numbers are associated with experience and therefore generally mean better outcomes.)
The survey also found regional hospitals such as Glendale Memorial, Pomona Valley Medical Center, Northridge Hospital Medical Center and Saint Mary Medical Center did well. Other standouts included Kaiser Permanente-Los Angeles and City of Hope National Medical Center.
Only a handful of the better performing hospitals that responded to all questions had computerized prescription systems or used critical care specialists. Most of the hospitals distinguished themselves by the sheer volume of high-risk babies or high-risk surgeries.
The use of that measure drew criticism of hospital industry officials, who noted that hospitals with smaller volumes of high-risk surgeries could still have quality care, especially if the surgeries were performed by one or two surgeons.
Among the hospitals that did not rate highly were Lancaster Community Hospital, Pacific Hospital of Long Beach and Los Angeles Metropolitan Medical Center, all with fewer than 200 beds.
Laurence Darmiento
