The harsh economics of operating a small non-profit hospital convinced the board of Panorama City’s Mission Community Hospital more than two years ago that it was time to seek an investor with deeper pockets.
The board eventually found a buyer. Pending a review by state regulators, the 145-bed hospital will be sold in stages over the next three years to Deanco Healthcare LLC, owned by Long Beach businessman Tom Dean.
The partnership agreement, signed in June, will culminate in the transfer of the Roscoe Boulevard hospital’s assets to Deanco, ending its non-profit status, which prompted the review. The sale includes a community health center in San Fernando.
Dean could not be reached for comment, but hospital Chief Executive Heidi Lennartz said her board evaluated four candidates and decided Deanco offered the best hope for maintaining current services and paying for long-delayed facility improvements.
Panorama City has a large working, low-income population, roughly one-third uninsured, Lennartz said, with the hospital providing $4 million to $5 million in charitable care each year.
“About 12 percent of our admissions are uninsured, and when you add in emergency room visits, about a quarter of our business isn’t covered by any private or public insurance,” said Lennartz, who along with the rest of the management team, medical and support staff will stay on. “With the ongoing reductions in Medical and Medicare reimbursement, it’s a situation that isn’t going to improve.”
Despite challenges in managing its day-to-day finances, Mission Community, which opened in 1964, has been more fortunate than many neighboring hospitals damaged by the 1994 Northridge Earthquake. The hospital was able to obtain sufficient federal funding to build a replacement patient tower by 2002, the first hospital in Los Angeles County to do so. But retrofit of the emergency room and imaging departments are still needed, as well as renovation of the old, closed patient tower so it can be used for medical offices or other purposes.
To allay concerns that turning Mission Community into a for-profit could reduce services to vulnerable patient groups, Deanco has committed to continue, for at least five years, to operate the facility with ER and in-patient psychiatric services, and to offer charitable care at current levels, according to filings with the state Attorney General’s Office.
Sharper Focus
Drug developer Xencor Inc. has decided to narrow its focus by licensing an early stage experimental cancer treatment so it can concentrate on a smaller number of potential winners.
The Monrovia biotech in June announced a collaboration with MorphoSys AG of Munich to develop an antibody-based cancer treatment known as XmAb5574 CD19. Antibody drugs work with the patient’s immune system to fight tumors.
As part of the agreement, the companies will collaborate on a Phase 1 study for patients with chronic lymphocytic leukemia. Xencor will receive an upfront payment of $13 million and be eligible for milestone payments and royalties on product sales if the drug receives U.S. approval. MorphoSys gradually becomes responsible for development costs at later stages in the process.
In 2009, Xencor raised money by licensing its broader drug development technologies to four larger drug companies, including Merck & Co. Inc. and Pfizer Inc.
“We had a bunch of programs and we knew we had to pick a focus and find partners for others,” said Chief Executive Bassil Dahiyat, noting the antibody drug was almost ready to start clinical trials and, therefore, was valuable.
As in its earlier deals, the private company will use the licensing revenue to develop its own drugs for cancer and inflammatory diseases. One of its experimental drugs recently completed a Phase 1 clinical trial for the treatment of Hodgkin’s lymphoma, Dahiyat said, with results expected to be released this year. Clinical trials are nearing on a drug to treat autoimmune diseases.
Wellspring Expands
Wellspring, a provider of treatment for autism patients in Southern California and the Chicago area, recently consolidated its corporate and administrative operations at newly constructed headquarters in North Hills.
Wellspring worked with insurance companies and health plans to pioneer the first national preferred provider network dedicated to treat autism, Asperger’s syndrome and related conditions using the principles of applied behavior analysis. The approach helps affected young children develop social skills and alternatives for tantrums, self-injury and other aggressive behaviors that commonly occur.
“We are finally able to bring all our corporate staff under one roof and have creative synergies amongst all support teams to better service our rapidly expanding provider network needs around the country,” said Chief Executive Leo Landaverde in the announcement.
Staff reporter Deborah Crowe can be reached at [email protected] or at (323) 549-5225, ext. 232.
