Citing declining profits at some its rural hospitals, Westworld Community Healthcare Inc. said Thursday that it will place greater emphasis on expanding its non-hospital operations, and eventually may divest itself of some money-losing facilities.
Moreover, the Laguna Hills-based company said its top management has been shifted in order to implement the changes, with Michael Dunn, chairman and chief executive, being named to the additional post of president.
Peter Donald, formerly president and chief operating officer, assumes the post of vice chairman, where he will oversee Westworld's non-hospital operations, including its recently formed health maintainence organization.
The newly adopted strategy represents a major change in outlook for Westworld, which has created a niche as a provider of integrated health care services to residents of rural areas.
Typically, Westworld has used the local hospital as a base to which it adds operations such as pharmacies and ambulance companies.
Expansion of Services
Now, Westworld plans to expand non-hospital services into new markets without necessarily acquiring a hospital or entering into an agreement to manage one, according to Glenn Caster, a Westworld spokesman.
Among strategies for improving profits, Westworld plans to place greater emphasis on its Westworld Community Healthplans Inc. HMO subsidiary. Currently licensed in four states, the HMO's planned expansion will fall short of its 1986 goal of operating in 14 states because of regulatory delays.
In areas where the HMO is not a presence, Westworld plans to sell memberships in its chain of rural urgent-care clinics in exchange for reduced-fee services, Caster said.
Caster said that many of Westworld's hospitals are money losers because they either are over-staffed, due to local regulations, or they have too few patients.