The California Department of Managed Health Care (DMHC) can't resuscitate Lifeguard: The San Jose-based HMO will permanently shut its doors on Dec. 31, 2002, leaving 168,000 patients scrambling for new health insurance.

The move to close Lifeguard was made on Sept. 24, 2002, by attorney Richard Diamond, the California conservator who was appointed by the DMHC two weeks ago to decide how best to address Lifeguard's financial situation. The DMHC requires Lifeguard to have assets totaling $18 million, but the health plan's assets have dipped to $5.9 million, a 70 percent decrease. According to Diamond, those losses are too severe to overcome.

This is the fourth time since the DMHC's inception in 2000 that it has stepped in to assume responsibility for a financially ailing HMO. In 2001, the DMHC took over Maxicare Health Plans, Tower Health, and Watts Health Foundation. Of those three, only Watts Health is still in business.

Lifeguard members who need more information can contact Lifeguard Member Services at (800) 995-0380 or the DMHC's HMO Help Center at (888) 466-2210.