Healthcare USA Expects Loss for Quarter, Year

Healthcare USA, which has struggled for the last year to find a solidly profitable business strategy, said Thursday that it expects a “significant” loss in its final quarter and full 1985 fiscal year because of write-offs associated with the disposal of four money-losing units.

Harlan Loomas, chairman and chief executive, said the Orange-based company will close dental insurance plans it operates in St. Louis and Chicago and four urgent-care facilities in Southern California. He said the company also will attempt to sell its health maintenance organization in Phoenix, its medical center in Michigan and two Southern California urgent-care centers.

Despite the pending sale of those operations, Loomas said the company expects to realize an “insignificant” amount of cash from the transactions.

“We are doing this to streamline our operations. These businesses have been a drain on our operations,” Loomas said. “We can’t afford them, and we don’t want them to interfere with our business in 1986.”

Loomas said that without the operations to be disposed of, Healthcare USA would have reported a small operating profit for 1985. He added that he expects a profit for 1986. The company lost $377,000 in its fiscal 1984.

The expected final quarter loss for 1985 would be the second consecutive quarterly red ink for Healthcare USA. In the quarter ended Sept. 30, 1985, the company lost $1.7 million.

Early last year, the company, then named Greatwest Hospitals Inc., sold its hospital operations to concentrate on prepaid health maintenance organizations. However, Loomas has said that it is taking longer than first expected for the company to “digest” all the changes, which also included the acquisition of a health maintenance organization in Michigan.

Loomas also has said the company was “seduced by the idea that HMOs were magic, and you would not make mistakes.” And he called Healthcare USA’s expansion program “overaggressive.”