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GuidesKeto HEAL Clinics suddenly close
, medical review by Dr. Andreas Eenfeldt, MD
in Dr. Eric Westman, For doctors, Keto 
A network of medically-supervised low-carb clinics across the US, co-founded by Dr. Eric Westman, announced this week that it was ceasing operations because the business model was not viable.
A well-respected, pioneering researcher and clinician in the low carb movement, Dr. Westman said he still believes strongly in the benefits of the keto lifestyle, but the premium-priced medical service the clinics offered to patients “is no longer suited to capitalize on the current enthusiasm for the keto lifestyle.”
Dr. Westman’s comments were made in a video posted on the company website and in an FAQ also posted on the site May 31, 2019.
My passion has always been to bring the benefits of a keto lifestyle and the remission of type 2 diabetes and obesity without medications to the masses. To that end, I hope HEAL Clinics has helped educate and spread awareness. But as a business model we’ve concluded that HEAL Clinics cannot be financially sustained.
In the video, Dr. Westman explains that the decision to close down arose after the company’s CEO Richard Koffler resigned May 20th, 2019, “for purely personal reasons to pursue other career opportunities.” Koffler began with the company in 2014 and took over as CEO in 2018. Dr. Westman said Koffler was critical to the creation and implementation of the company’s business strategy and to the raising of capital. With his departure, Dr. Westman said, the board of HEAL Clinics felt they were no longer in a position to continue operations.
The news came as a huge surprise to HEAL Clinic patients, investors, and the global low-carb community. Many comments on the HEAL Clinics Facebook page expressed deep sadness and thanked Dr. Westman for his hard work to spread the benefits of the low-carb lifestyle over the last 15 years.
However, a number of people — especially individual investors who believed in the power of low carb to improve health — expressed dismay, concern and even anger. That is because the company as recently as a month ago was still actively promoting shareholder investment opportunities in the clinics through an online public offering. Why didn’t they shut down HEAL Clinics prior to taking money from new investors? The FAQ said this:
We earnestly believed the Online Public Offering would carry us until our financial model turned cash-flow positive. It is clear it will not. We decided the best course of action in terms of all our stakeholders was to stop the continuing losses and wind down the business while we still had cash to pay our bills and make a “soft landing.”
The company said on its websites any funds remaining after paying final bills will be returned to shareholders on a pro rata basis. As well, they stated that patients with active subscriptions at the clinics will also receive a refund on unused portions and be sent an email listing medical resources to help them in continuing their low-carb care.
This is an unfortunate development for all concerned — patients, founders, doctors and staff who worked in the clinics, and long-time and recent investors who believed in the company’s future.
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Guide Are you a doctor or do you know a doctor? Are you interested in low carb and keto diets? Then this resource could be something for you to use or share!
It will be interesting to see how Virta progresses. Their capitalization was always huge compared to Heal. They recently got a contract with the VA, and that is a giant step in the right direction. If the VA pushes it, you will indeed capture patients that never heard of the basic concepts before. And it will force doctors within the VA to get current.
I am one of the original Heal investors, and if I have any advice for Westman, it is to be joined at the hip with a law form and accounting firm that follows the law explicitly, no exceptions. It is no time to be fair, only to be legal. If not, the liquidation could drag out for years and you can forget about any immediate tax write off or even a return of remaining capital. It will all get eaten up in legal fees. In hindsight the phenomenally successful Start engine campaign should not have happened, but when the board of directors saw the writing on the wall they sought to shut down and preserve capital, and that was the right thing to do.
Hi Dawn -- there are actually 2 Dr. Bernsteins. Dr. Richard Bernstein is the US type 1 expert who has made such a huge impact on the blood sugar management of type 1s.
Dr. STANLEY Bernstein is a Canadian doctor, originally out of Toronto, who has set up medically directed weight-loss clinics . There are some 50 of them in Canada (and I think he is only in Canada, but I could be wrong.) These clinics have from my understanding a very low-fat, low-calorie weight loss program -- sometimes as little as 500-800 calories a day. I am not sure whether they have updated or altered their program in recent years. But I have had friends go through the program over the last decade (for a large fee) and lose weight initially, but not be able to sustain it and rebound higher. One close girlfriend struggled with extreme hunger and fatigue on the diet and did initially lose 40 lbs, but then gained it all back. Both friends have now turned to keto and had much more sustainable success without hunger and fatigue.
I know many people were helped with my investment funds.
The low carb - Keto diet has helped me to lose 75 pounds and keep it off for 7 years. Thank you Doctor Westman, I have the tools to stay this way, healthier than before. :)
Diet Doctor is unable to advise on the status of Heal Care settlements or provide tax advice.