‘Seasoned’ Top Official Picked by HealthCare : Firm Predicts 1st Quarter ‘Solidly in the Black’
Citing the need for a “seasoned . . . senior executive,” HealthCare USA on Monday said it named Ernest L. Park to the posts of president and chief operating officer, replacing William Scott, who quietly resigned in October.
Also, on Monday, Harlan Loomas, HealthCare USA’s chairman and chief executive, said the Orange-based prepaid health plan operator, which posted net losses totaling $13.1 million during 1985, will be “solidly in the black,” for the first quarter ended March 31.
Before joining HealthCare USA, Park had been president of CIGNA Healthplans of California, a Glendale-based unit of the Philadelphia insurance giant. Park also spent eight years with Los Angeles-based Whittaker Corp., where he was involved in the company’s Saudi Arabian hospital operations.
Scott joined HealthCare USA in 1983 and had been in charge of its development activities. But amid losses resulting from its rapid expansion, Scott left the firm, because “there was no need for the expense,” Loomas said.
Despite Park’s inheriting the title of president and chief operating officer from Scott, Loomas said Monday that Park’s duties will be different from those of his predecessor. Scott was primarily involved in new business development. Park will concentrate on running the two prepaid plans that HealthCare USA already owns. Together those plans serve more than 250,000 people in California and Michigan.
“This is a move that is long overdue,” remarked Larry Selwitz, an analyst with Bateman Eichler, Hill Richards Inc., a Los Angeles brokerage house, who believes that HealthCare USA has needed management with health maintenance organization experience.
Despite 1985’s losses, Loomas said HealthCare USA will report a profit for the first quarter. Although he refused to issue any specific projection, Loomas said the quarter’s results--to be reported later this week--will include a “substantial benefit” from about $3.5 million in tax loss carry-forwards incurred during 1985. In the same three months last year, HealthCare USA reported net loss of $3.8 million on revenues of $41.9 million.
Following the announcement Monday, HealthCare USA common stock gained $1.25 a share to close at $9.50 a share, putting the company on the New York Stock Exchange’s list of biggest gainers for the day.