Monarch HealthCare is one company that’s not feeling the pinch of rising insurance premiums.
The company, one of the state’s bigger doctors groups, just renewed and expanded its office lease in the Irvine Spectrum.
Monarch renewed its lease for 50,400 square feet of office space at two buildings, including its headquarters. The buildings, owned by The Irvine Company, are on Technology Drive, running alongside the Santa Ana (I-5) Freeway.
The company also signed an additional lease for 24,000 square feet at a low-rise building next to its headquarters. Terms weren’t disclosed.
“We’re continuing to build up our infrastructure, to handle more growth,” said Ray Chicoine, chief operating officer for Monarch.
The company expects to see sales grow nearly 25% this year to $250 million, according to Chicoine. It’s expecting similar growth during the next few years.
Monarch, formed in 1994, counts some 300 workers at its two existing buildings. That’s up from about 230 employees a year ago. The extra space, which Monarch will move into in October, will allow the company to hire an additional 75 workers or so during the next year, Chicoine said.
Monarch is an independent practitioner association. Doctors continue to run their own practices but band together for business purposes, including contracting with health plans.
The group’s patients enroll with a health plan, such as PacifiCare Health Systems, the Cypress-based unit of Minnesota’s UnitedHealth Group Inc. Monarch provides medical treatment under contracts it negotiates with the health plan. It currently has six plans it works with. Patients can go to any of the county’s 20 hospitals.
Monarch handles the finances, legal affairs, insurer payments and human resources for doctors at its offices. The only doctor at Monarch’s office is its chief executive, Bart Asner.
The company’s growth has ramped up as of late, but Chicoine says that’s more because of the marketplace today.
“Our growth has been largely organic,” he said.
South County is the source of most of its business, in areas such as Irvine and San Clemente’s doctor-heavy Talega community.
“The growth is partly because healthcare premiums keep going up,” Chicoine said. “As (those) dollars get bigger,when a Blue Cross raises its premiums,those dollars flow down to us.
“It’s a little perverse, because what we’re trying to do is help keep (premiums) down,” he said.
Proposed changes to California’s healthcare laws could increase business for Monarch.
Gov. Arnold Schwarzenegger’s healthcare reform proposal calls for employers with 10 or more workers to offer health insurance or pay 4% of payroll to a state pool. It would also require all Californians to get health insurance through private companies or public programs.
“There’s half a million uninsured people living in Orange County. Most likely, they’d end up in a model like ours,” Chicoine said.
Greg May of Grubb & Ellis Co.’s Newport Beach office represented Monarch in the lease renewal and expansion.
