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Ambulance leader Falck acquires Verihealth

Dan Verel, Business Journal Staff Reporter
Monday, May 20, 2013, 7:07 am
Categories: Health Care and Senior Living, Industry News, Marin Report, Mendocino Report, North Bay News, Sonoma Report, Top News Item, Top News Stories | No Comments

PETALUMA — The American arm of Danish ambulance giant Falck, one of the largest ambulance companies in the world, has acquired Petaluma-based Verihealth Inc., an ambulance and medical transport company founded in 2000.

Terms of the deal, completed about a week ago, were not disclosed except that Verihealth is now a wholly owned subsidiary of privately held Falck USA, based in Seattle, according to CEO Boo Heffner.

“We’d been in discussions with Verihealth for about the last year and we very specifically targeted them as a great company,” Mr. Heffner told the Business Journal. “We’re very selective in who it is we acquire.”

The acquisition of Verihealth represents the first foray into Northern California for Falck USA, which in just two years has become the third largest ambulance provider in the U.S. after a series of partnerships and acquisitions from Massachusetts to Washington, Mr. Heffner said.  

It’s also yet another sign of the consolidation taking place in the health care sector, spurred largely by the Affordable Care Act and the economic realities that are impacting companies — from physician groups to blood banks to ambulance companies — large and small.

“There’s a lot of interest beyond one company acquiring another,” said Mark Knight, a Santa Rosa-based health care consultant.  ”It does show consolidation in health care, not just in the traditional settings like hospitals and physicians groups, but you’re seeing it in ambulance companies and other providers.”

Verihealth was founded by Gary Tennyson in 2000 at 2190 South McDowell Blvd. as an ambulance and medical transport company, with a training institute for emergency medical technicians.  Combined with Falck Northern California’s new operation, Verihealth has a staff of 268 employees and a fleet of 40 ambulances, according to Mr. Tennyson, who said Falck approached him.

“I wasn’t looking to sell Verihealth,” Mr. Tennyson said. “But when we were approached by Falck and as I got to know the organization, and the quality individuals on the Falck team both in the U.S. and internationally, that truly care about our customers, it was obvious we would be a perfect fit.”

Mr. Tennyson will continue to head Verihealth and will become CEO of Falck’s Northern California region. Staffing levels won’t change and the name Verihealth will remain in Sonoma County, Mr. Heffner said.

“We don’t want to wipe out a reputation that a company has established through the name,” Mr. Heffner said. “We looked at a lot of different companies, and Verihealth is a very well-established company run by a very experienced team.”

He added, “All decisions are made at the local level.”

While Verihealth will retain its name, Falck USA views Petaluma as a key stepping stone in growing its presence in Northern California and the San Francisco Bay Area, Mr. Heffner said.  Petaluma will serve as Falck USA’s Northern California headquarters given its centralized location.

“We view them as a springboard, if you will, into larger markets in Northern California,” Mr. Heffner said. “You couldn’t put a better dot on the map of a central area. It’s within a stones’ throw of some big markets.”

Verihealth is the second ambulance company  in Sonoma County to be acquired within the past year, with REACH Air Medical Services being the first last December. Texas-based Air Medical Group Holdings, Inc. purchased the Santa Rosa-based air medical transport company for roughly $250 million.

Mr. Heffner said that while ambulance companies are distinct from other medical providers, the industry is nonetheless adapting to the post-health care reform world by striking collaborations and partnerships in an effort to become more efficient.

“We have to save money in today’s reimbursement environment,” he said, referring to payment changes in the Affordable Care Act that shift away from the fee-for-service model and more toward bundled payments that take into account health outcomes.  ”It’s real and it’s here. We all have to deal with it. The reimbursement structure has a lot to do with it.”

To that end, ambulance companies play a vital role in the delivery of health care, and Falck, started in Copenhagen more than 100 years ago, is in a good position to share its experiences with hospitals and other providers, Mr. Heffner said.

“Whether hospital or ambulance, we all have to work on patient outcome. We as the transporter are a key cog in that wheel in patient care,” he said. “Making sure people end up in the right facility and have the right type of transportation, you have to be efficient.”

For example, trained paramedics can work closely with hospitals and physicians to utilize technology in determining the most appropriate facility to take a patient or whether they could be treated at home, all with the goal of lessening costly trips to emergency rooms.

“It’s a very important mode of transport — you are a continuum of care. There can’t be a drop-off in care. It has to be equal or better,” Mr. Heffner added.

The ambulance industry in general is well-positioned to help reduce health care spending by carefully thinking about what the necessary level of care is, particularly for non-emergency care.

“We have a multifaceted approach. When it’s more of an ongoing chronic situation, maybe there’s an alternative, such as making sure they are compliant with medications, and focusing on prevention rather than reactionary medicine,” Mr. Heffner said.

Falck USA is currently operating in 14 states and employs  just north of 5,000 employees across the country. Internationally, Falck operates in 37 countries and employs more than 16,000.


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