UniHealth Sells Huntington Provider Group

Burbank-based UniHealth has sold its flagship physician organization to a group of doctors already affiliated with the company. Huntington Provider Group, which along with UniHealth’s other holdings had comprised one of the state’s largest physician organizations, has been purchased by 150 doctors, led by the group’s current management, said John Edelston, the health-care consultant who represented the doctors in the deal. Terms were not disclosed. The purchase included Huntington’s contracts, but not its debts, to care for 150,000 patients in Pasadena and elsewhere in the San Gabriel Valley.

The new organization, to be called Physician Associates of Greater San Gabriel Valley, has deliberately been structured so as to avoid some of the financial problems that have plagued physician groups in the state, Edelston said. The group will be set up as a single professional corporation, rather than as a medical group coupled with a management company. This structure will ensure that a management company won’t pull its own profit out of funds meant for patient care. Because the management companies were designed to make company assets portable enough to sell to venture capitalists and publicly traded companies, the single organization will also prevent overtures from such groups.

In addition, the company is taking measures to prevent undue emphasis on individual financial gain by limiting the power of individual shareholders and restricting ownership to participating physicians. For example, only doctors will be allowed to own shares in the company--not financiers or other investors. No one will be able to purchase more than $100,000 worth of equity, and each doctor will be allowed only one vote in the corporation. The deal is set to close Dec. 15, and the new owners will take over Jan.1.