THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 7, 1995 TAG: 9501070209
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 94 lines
First Hospital Corporation has bought three Hampton Roads psychiatric facilities, a move that doubles the company's local holdings and secures its dominance of the South Hampton Roads psychiatric market.
The company sealed the deal Friday to acquire Tidewater Psychiatric Institute operations in Norfolk and Virginia Beach, and Serenity Lodge, a substance abuse treatment center in Chesapeake.
The purchase represents a homecoming of sorts for First Hospital head Dr. Ronald I. Dozoretz, who helped found TPI about 25 years ago before he broke away to start his own health care empire.
The purchase comes at a time when First Hospital is expanding operations, acquiring facilities and taking on new contracts around the country.
In South Hampton Roads, First Hospital now owns six inpatient and day treatment mental health facilities. Several local medical hospitals also have facilities.
Officials of First Hospital confirmed the deal with TPI's and Serenity's previous owners, Charter Medical Corp. of Macon, Ga., but declined to discuss specifics.
The deal brings First Hospital's total number of Hampton Roads employees to 1,750. The new facilities have a total of 375 employees.
The company, which started in 1983, owns 21 facilities around the country and employs about 4,575 people.
Charter, which bought TPI and Serenity several months ago from troubled National Medical Enterprises, has been laying off local workers.
``At this point we definitely are not planning any further layoffs,'' said Edward C. Irby, First Hospital's chief operating officer.
As for the staff that's already gone, Irby says First Hospital hasn't decided whether any will be called back to work.
``We've got to evaluate that when we get in. I just don't know know that till we get in there and see,'' he said. ``We're looking to build a better system. We have not focused on the staff it's going to take.''
Irby said that First Hospital plans to streamline operations at the new facilities.
The company also may aim for efficiency by giving each facility a unique focus.
First Hospital plans to convert TPI in Virginia Beach to a treatment center for children and adolescents, with an emphasis on short stays and treatment involving the entire family. Currently, the facility handles adults as well as children.
Serenity Lodge likely will stay focused on substance abuse, at least for now.
TPI in Norfolk eventually may be converted to a geriatric treatment center, although those plans are still very tentative, Irby said.
The purchase comes at a time when health care groups all over the country are consolidating, and First Hospital has been riding the crest of the wave.
``We've always been known as a growth company,'' Irby said.
First Hospital already owns Norfolk Psychiatric Center, Virginia Beach Psychiatric Center and The Pines, a center for troubled youth, in Portsmouth.
First Hospital head Dozoretz also was one of several local doctors involved in the plans for the first TPI facility, which opened in Norfolk in 1970. But he left the partnership before the opening and eventually started his own center in Portsmouth.
The partnership of local doctors sold their ownership to a hospital company in 1980, although they retain ownership of some of the land at the Virginia Beach site.
Stuart Ashman, a retired psychiatrist and one of the founders of TPI, said he hasn't had a chance yet to chat with his former competitor about the new arrangement.
``I am going to congratulate him and tell him life is like a circle. We started out as partners 20-something years ago, and here we are partners again,'' Ashman said.
Dozoretz released a statement that said: ``It will be my privilege to receive advice and guidance from such an eminent psychiatrist as Dr. Ashman.''
In recent years, TPI and Serenity have been touched by the legal and financial troubles of National Medical, a California-based company that owned them from the early 1980s until a few months ago.
In April, National Medical agreed to settle federal charges of colossal insurance fraud at its psychiatric hospitals and set aside $375 million to cover costs.
National Medical's psychiatric patients had complained that they were recruited by people who were paid kickbacks for referrals, then hospitalized against their wishes and overtreated until their insurance was exhausted. Hundreds of federal agents raided NME's headquarters in Santa Monica, Calif., and 20 other offices last year.
Irby said that TPI is still ``shell-shocked'' from all the troubles of its previous owner.
KEYWORDS: FIRST HOSPITAL CORPORATION SERENITY LODGE TIDEWATER
PSYCHIATRIC INSTITUTE PURCHASE MENTAL HEALTH CHARTER
MEDICAL CORPORATION by CNB