ELNA Medical Group | In difficulty, the network of clinics begins to lay off people

Two weeks before Christmas, several doctors and employees of the ELNA Medical Group are devastated to learn that the company risks bankruptcy. To get out of this situation, she had to quickly sell several very loss-making clinics and immediately began laying off staff to reduce payroll.

“There are layoffs that were made today,” he told The Press the controller responsible for the file at Raymond Chabot, Benoît Fontaine, Friday.

According to its report, at least “three medical clinics with significantly negative financial performance” will have to be sold by January 31. Otherwise they risk closing.

In Quebec, ELNA has 26 family medicine or specialized clinics where care is paid for by the Régie de l’assurance santé and 11 100% private clinics. It describes itself as the largest network of medical clinics in Canada.

The company placed itself under the protection of the Companies’ Creditors Arrangement Act (LACC).

“Horror scenarios”

Raymond Chabot’s report underlines the disastrous consequences that a bankruptcy of ELNA would have, which would lead to “hundreds” of layoffs and the closure of “around 100 care points”. “About 1,000 doctors and some three million patients are expected to be reassigned to other clinics. » We also read that a major employer would disappear in several provinces, which would have repercussions on the health sector.

In internal emails obtained by The PressELNA told many employees that it did not intend to interrupt services in their clinics and that it would notify them “as a priority” in the event of changes, so that they could “ [se] prepare » and adapt [leurs] activities accordingly.” Others received a separate email saying their “clinic is not included in [le] restructuring process”, but that they would be “informed of significant developments”.

In some places, the anxiety is already palpable, according to an ELNA source, who is not authorized to speak to the media.

This source also expects an exodus of doctors. “You have to put yourself in their place. Do they want to wonder if they will receive their next paycheck? Nurses will desert, assistants will desert, all kinds of professionals will desert. It’s sad. »

Many are already looking for a new employer. “As soon as the news came out, I received 15 calls from doctors and staff members,” says Rémi Boulila, owner of the 11 clinics at the Mieux-Être Medical Group.

A general practitioner at the end of his career agreed to speak to us on the condition of not being named, since internal ELNA emails obtained by The Press ask staff to refuse any interviews. “In our team, we are all very confused and uncertain about the future. We are also thinking about leaving and staying together if possible. »

Buy on credit

According to Raymond Chabot, ELNA has been losing around 1.5 million per month since 2023, but could maintain its activities until mid-February, thanks to a loan of 5 million granted by the National Bank of Canada, as part of restructuring.

His report explains how COVID-19 testing had become a real cash cow for CDL Laboratories.

In 2021, the ELNA subsidiary earned record revenues of 54 million in this market, while receiving nearly 9 million in federal aid to confront the pandemic. When the government lifted restrictions in the fall of 2022, this entire revenue line collapsed.

The conglomerate has nevertheless increased its acquisitions on credit. According to the application filed under the CCAA, he owes millions to the lenders who allowed him to buy other networks: the Physimed group (located in Saint-Laurent), the La Cité Médicale group (in Quebec) , the Brunswick group (in Pointe-Claire) as well as Medicentres and m-Health, in Ontario.

The Raymont Chabot report specifies that ELNA spent 45 million, during the 2021 and 2022 budget years, to acquire these two Ontario networks and seven Quebec clinics. She subsequently purchased Physimed, Cité Médicale and Brunswick.

We also learn that ELNA tried to find a way to refinance itself and reduce its losses in the normal course of its business. As of May 2023, the company has entrusted Raymond Chabot and its main creditor, the National Bank, with the mandate to examine its accounts and assets.

They also had to find candidates to invest in ELNA or buy part of its assets. Even though the company received several letters of intent, discussions could not continue due to lack of funds to finance activities in the run-up to possible transactions.

“To continue, it took money,” explains Benoît Fontaine, the controller responsible for the file at ELNA. Hence the application under the CCAA, which makes it possible to obtain first-tier interim financing. »

Under the supervision of the court, the ELNA controller must now start the solicitation process from scratch. He hopes to be able to analyze a first series of offers from January 31.