Integration is task No. 1 for KPC Healthcare Inc.’s new chief executive, Peter Baronoff.
Acquisitions might not be far behind for the Santa Ana-based healthcare systems operator, whose portfolio of seven acute-care centers includes a quartet of Orange County facilities.
The privately held company runs South Coast Global Medical Center in Santa Ana; Chapman Global Medical Center in Orange; Anaheim Global Medical Center; and Orange County Global Medical Center, also in Santa Ana.
The hospitals combined for 2,716 employees and 763 licensed beds, and had net revenue of about $427 million in 2016, according to the office of Statewide Health Planning and Development.
The properties didn’t necessarily work arm-in-arm with each other before, said Baronoff, who took over the top spot at the company last month, and has since been working to get them better integrated, in part through a series of management changes.
“KPC Healthcare was previously just the four Orange County hospitals. On a going-forward basis, it will be an integrated hospital system combining with the Riverside system,” he said during a meeting last week at the company’s headquarters.
The health system is a subsidiary of Riverside’s KPC Group, and its portfolio of hospitals has been expanded this year to include facilities in Hemet, Menifee and Victorville.
Its parent company also has portfolios in pharmaceuticals, education, engineering and real estate; KPC Group reports having amassed over $10 billion in assets.
C-Suite Shuffle
Following his appointment as chief executive, Baronoff announced a series of management tweaks for the OC hospitals.
Ada Yeh will serve as chief executive of Chapman Global and South Coast Global, while Ann Abe was named interim chief executive of Orange County Global.
Scott Rifkin remains chief executive of Anaheim Global; he was also named chief operating officer of the health system, a new position.
“One team, one mission,” said Rifkin. He said the proximity of the OC hospitals will allow the health system to better utilize each center.
Abe agrees. She said that “instead of taking businesses from each other,” the hospitals can benefit from sharing and directing patients to where it makes sense for best care.
“Orange County Global is a Level II trauma center—we take care of the more intensive care stuff—so it makes sense to send those patients to us,” Abe said.
The 282-bed facility, considered KPC’s flagship hospital, is one of only two Level II trauma centers in the county. It’s just off the Costa Mesa (55) Freeway in Santa Ana, a few doors down from KPC’s North Tustin Avenue headquarters.
Abe added that the center is also known for burn, cardiac and stroke care—“our stroke center just received a comprehensive stroke care designation.”
Orange County Global is the only KPC Healthcare hospital to have a neonatal intensive care unit.
Niches
Each hospital has its own niche.
Anaheim Global provides adult behavioral health services, and inpatient and outpatient services, the latter via collaboration with H.O.P.E. Center.
KPC Healthcare is one of the largest local owners of mental-health beds, totaling 149; all four hospitals provide geriatric psychiatry services.
Chapman Global offers bariatric, orthopedic and spine surgery—“your boutique surgical hospital,” according to Yeh.
South Coast Global is the closest hospital to the South Coast Plaza shopping mall. The hospital has a subacute long-term care unit.
Baronoff said that having all the hospitals work as one allows the health system to take advantage of supply chain, clinical specialty, IT capability, human resource and financial oversight efficiencies.
“The plan is to standardize our procedures and our system with the objective of growth,” he said.
Growth Mode
Baronoff has scale in mind. He told the Business Journal that it’s “looking at acquisitions.”
Specific locations, hospital types and markets the company is looking at are undisclosed.
Co-founder Baronoff served as chairman and chief executive of acute-care specialty hospital system Promise Healthcare from 2001 to 2017.
The Boca Raton, Fla.-based firm completed a number of acquisitions under his tenure, including a 2014 deal that involved six healthcare facilities—four long-term acute-care hospitals and two skilled nursing facilities—previously owned and operated by Fundamental Long Term Care Holdings LLC.
Promise Healthcare has 14 hospitals and two skilled nursing facilities in eight states.
Navigating complex public policy issues, or outright politics, should come naturally to Baronoff in his new role; he previously served as deputy mayor of Boca Raton, and was a two-term city council member.
He was brought on board by KPC Group founder and Chairman Dr. Kali Chaudhuri, and replaced Suzanne Richards, who currently serves as senior consultant to KPC Healthcare.
“Suzanne was the stabilization phase, and now with Peter, the system is in a growth mode as a more integrated, synergized entity,” the three OC hospital executives told the Business Journal.
Richards, who made her career as a hospital restructuring expert, took on her first KPC hospital in 2012. She raised the acute-care hospital in Victor Valley out of bankruptcy and generated $6 million in the first year of operation.
She later took over Anaheim Global and Orange County Global in 2014, and eventually oversaw all four OC hospitals.
Richards won a Business Journal’s annual Women in Business Award last year.
History
Chaudhuri, who started as an orthopedist in Hemet, came to own the four financially challenged OC hospitals in 2005, when he led Costa Mesa-based Integrated Healthcare Holdings Inc.’s bid to buy the hospitals from Dallas-based Tenet Healthcare Corp.
The four hospitals, which had suffered from a variety of financial and operational challenges, were taken private, and folded into KPC Healthcare.
The hospitals had a name change in 2015. Western Medical Center Santa Ana is now known as Orange County Global; Western Medical Center Anaheim is now Anaheim Global; Chapman Medical Center is Chapman Global; and Coast Communities Hospital in Santa Ana is South Coast Global.
The company ranks as OC’s 34th-largest employer. All four hospitals ranked among OC’s 30 largest hospitals by net patient revenue, per the Business Journal’s annual list published in February.
