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Thursday, Mar 28, 2024

Failing Firm Had Long Been Seeking Merger

It was a strategic partnership long sought after that rescued Lakeside Healthcare Inc., a major medical group in the San Fernando Valley, from impending bankruptcy in the nick of time. Heritage Provider Network acquired the organization, including its management company Lakeside Medical Systems, Inc. and all its affiliated medical groups Nov. 6, saving some 700 jobs and preventing the disruption of patient-physician relationships for Lakeside’s 200,000 patients. “We were looking for a strategic partnership for the past year, and had talked to a number of entities and had felt that the best fit for Lakeside was Heritage,” said Keith Richman a Lakeside senior executive. “We felt that they were the best entity to move forward into the future with. Had that [merger] not occurred, Lakeside was at risk for bankruptcy,” he said. Already struggling with the rising cost of medical care, Lakeside also had some problems integrating previous mergers, and was struggling with high administrative costs. Lakeside Community Healthcare, a for-profit integrated healthcare organization serving members in Los Angeles and Ventura Counties, merged with Community Medical Group in 2007 and West Covina Medical in 2006. As a result of these mergers, the company was managing 150 employed physicians, working on ensuring the sustainability and profitability of the physicians group. Credit crunch But Lakeside’s financial problems became acute due to the credit crisis, said Richman. “The bank that we had banked with was taken over by another bank and what caused the acute problems for Lakeside was the bank calling in all of their loans,” he said. “We had been in diligent discussions with Heritage for two or three months prior to that because we thought that Heritage provided the best future for Lakeside, but the circumstances that arose made the [merger] go more quickly.” As the result of the merger, all of the Lakeside organizations were consolidated into one entity Lakeside Medical Organization, a sub corporation of Heritage Provider Network, which will operate independently but will work within the HPN network family, he said. Heritage Provider Network CEO Dr. Richard Merkin said they were committed to maintaining Lakeside’s high level of care, in addition to ensuring the seamless continuity of care for all of Lakeside’s patients. Heritage, a privately held managed healthcare network, was founded by Merkin 30 years ago. The company manages more than 15 affiliated physician groups. “We believe this acquisition provides for the continued and improved excellence of care for Lakeside’s members,” he said in a press release. Although the financial terms were not discussed, the acquisition also brings a host of advantages to Lakeside patients said Richman, who will continue to manage the day-to-day operations of Lakeside Medical Organization. Variety of programs “Heritage has systems of care that were better than the ones that we had at Lakeside, including physician home visit programs, electronic monitoring of patients at home, electronic medical records, and care for sick patients who need care at home or on a more intensive basis. So there are lots of programs that Heritage has that will benefit the patients,” he said. Overall, the new arrangement will better position Lakeside in the future, he said. “We view the Heritage organization as a model for national healthcare reform. It’s a model that’s committed to providing quality affordable healthcare and we think is a good example of the type of comprehensive, integrated healthcare delivery systems that can provide quality affordable healthcare.”

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