LAKESIDE SYSTEMS INC., Glendale No. 1 Fastest Growing Company Over $50 Million (71%) By THOM SENZEE Contributing Reporter The fastest-growing firm in the over $50 million category has been busy lately. Lakeside Systems had a 71 percent growth rate over three years and revenues of more than $152 million last year. “Lakeside has grown tremendously over the last couple of years,” said Keith Richman M.D., executive vice president of the healthcare provider and provider-services firm in Glendale. “We acquired two medical groups at the end of last year, and merged with another one earlier this year.” Those moves have made Lakeside one of the three largest integrated, comprehensive healthcare organizations in the region, led only by Oakland-based Kaiser-Permanente and Healthcare Partners, a regional behemoth based in Torrance. Arguably, the key to Lakeside’s success in catapulting itself to its current position near the top of the heap of a large number of competitors in the region, is the company’s use of its health plan license, as a subcontractor administering billing and other processes on behalf of smaller groups. “We offer the back-office expertise when medical groups get certain contracts with certain health plans,” Dr. Richman said. In addition to health-plan specific assistance for physicians’ back-office operations, Lakeside also sells medical business systems ranging from administrative software to marketing services. Lakeside even does staff training, albeit on a small scale, and quality-management servicing for clinics. But, says Richman (a former California Assembly member), Lakeside’s primary business is its operation as a healthcare provider. “With the addition of Eastland Medical Group (of West Covina) and our merger with Community Medical in the west San Fernando Valley, we are now one of the largest integrated, comprehensive healthcare organizations in the region, caring for 250,000 patients,” he said. Lakeside “operationalized” its license to act as a health-insurance organization by becoming a subcontractor, for Secure Horizons, SCAN, and other plans working onsite at both its own offices, as well as non-Lakeside-owned medical groups. In that capacity, Lakeside acts as a claims processor for its physicians in its own network. Earlier this year the Providence Health System, parent organization of the Holy Cross and St. Joseph Medical Centers, became a minority partner in Lakeside Systems. “They’re a minority partner both in terms of investment and strategic planning,” Dr. Richman said. In addition to claims processing, Lakeside also offers a laundry list of other medical-admin services. Then there is the lifeblood of health organizations as businesses utilization management. That is the term used by the medical world for what lay people would call referrals. But of course, in healthcare, a referral is more than just a recommendation that a patient go to Dr. X for Procedure Y. Utilization management involves complex approvals, processing, reporting, tracking and payment functions. Even with Lakeside’s vast administrative menu, Dr. Richman insists the company’s main focus is still the practice of medicine. “We are committed to the organization as being one that is committed to providing quality, affordable healthcare,” he said. “And, we’ve been very successful in doing so, hence our growth.” Lakeside has 2,000 physicians in its network, including some who make house calls to frail patients. It operates dozens of medical offices, as well as four urgent care facilities, and a surgery center. Richman is certain being a doctor, and having been an elected official, makes him a different kind of administrator a better one. “We are actively working on (an internal) solution to the health-coverage problem for people who can’t afford insurance,” he said. “But I can’t offer any details on that at the moment.” Richman believes Gov. Arnold Schwarzenegger’s universal healthcare proposal for California was a laudable attempt to solve the problem of access, but it was ultimately “too flawed” for him to support. Richman said Lakeside Systems does not face any significant challenges that are unique to the company at the moment just those that face the entire healthcare industry (e.g., increasing costs, etc). He denies Lakeside has any current aspirations of going national. “Looking to the future, we plan to grow as a regional provider serving Ventura, Riverside, Los Angeles, San Bernardino, and Orange Counties,” he said. The company employs 800, including 150 physicians (the 2,000 number represents network-affiliated doctors), about 450 support-staff for physicians and 250 who work in management.
