No easy cure likely in fight over control of Zoom+Care clinics
The Portland-based health clinic chain Zoom+Care has drawn comparisons to Starbucks with its cookie-cutter decor and relentless focus on cheery customer service.
But now, internal strife over its financial health and the pace of expansion threatens to shut down its ubiquitous clinics in neighborhoods around Alberta, Hawthorne and Woodstock, according to recent court filings.
Competing depictions of the firm's situation offered by two groups of shareholders give a rare peek inside the local health care company, shedding light on how twin goals of profitability and growth may be affecting staffing and care.
Endeavour Capital, a local investment firm that is now a 42-percent owner of the firm, last week filed suit against two companies affiliated with Zoom+Care, including Zoom Management Inc., demanding a receiver take over the firm to avoid an implosion. It also demands $8.8 million.
"ZMI has been forced to cut substantial numbers of employees from its payroll and has reduced compensation for many of those who remain. Because of these actions, ZMI and the Zoom+Care business generally, are operating without adequate staff and are at risk of losing many key employees, including members of their core management and executive teams," claims the investment firm's suit.
The firm's co-founders, Dave Sanders and Albert DiPiero, filed their opposition to Endeavour's move Monday, saying Endeavour's bleak portrayal is false and an effort to take over the firm at advantageous terms. They say the company's recent lack of profitability has been driven by Endeavour's demands for high interest payments and that the chain undertake a more rapid pace of expansion into Seattle.
From an idea in the heads of the two Portland doctors, Zoom+Care has grown rapidly since 2006 into a chain of neighborhood health clinics around the Portland area, with outposts in Salem, Vancouver and Seattle — 35 clinics in all.
The company stressed low overhead, customer-friendly technology, and neighborhood access, saying they were making it easier for the uninsured to get prompt care, with no waits.
The firm's founders liken their company to Lyft and Amazon, two companies that have been criticized as helping destroy so-called legacy industries that came before them — taxis and neighborhood stores.
But with the growth of Zoom+Care has come criticisms over the years, that the chain was pushing the envelope by promising more in its marketing than it could provide, exploiting a legal loophole to deprive workers of breaks, short-changing the poor, and cherry-picking customers to the detriment of the state's overall health care system.
The firm has denied all those claims, saying excellent care is its priority.
Earlier this year the state Department of Insurance sued the chain owner's spin-off insurance plan, called Zoom Health, to place it in receivership, and the FBI launched an investigation of the plan.
In recent months, however, Zoom+Care has been under even greater stress, the firm's founders admit in court.
They say they have reduced expenses by $1 million a month, according to their Oct. 2 motion. They also say that Sanders and DiPiero have been "opposed to the influence of investors who lack the same commitment to patient care."
In the face of Endeavour's threats to take them to court, the two founders "did not cave; they made it clear that they would do whatever they needed to protect patient safety and care," according to their filing.
However, in the same filing they admit that they have agreed in concept to letting Endeavour take over Zoom+Care.
It's just a matter of working out the details, they say, but complain that Endeavour's legal action could drive away patients, vendors and employees with its "destructive public relations campaign."