Friday, May 13, 2016

Ben Breier's Hospice Tale


Kindred held their earnings call last Thursday and President Ben Breier was effusive in his praise.  He said:

In the hospice segment our team has made terrific progress on the challenging reorganization we've undertaken over the past three years. We have seen significant stabilization over the back half of 2015 and this quarter we saw the first quarter of year-over-year census growth since our acquisition of Gentiva with patient days increasing 2.9% year-over-year. 

Not said:  Patient days actually fell from Q4 2015

This growth comes despite average length of stay decreasing by three days and branch network consolidation reducing the number of hospice sites from 193, at the beginning of 2015, to 175 at the beginning of 2016.   

Not said:  Admissions increased by 70 from Q1 2015  With 177 hospice sites that's an increase of 0.4 of an admission per site.  Average daily census rose by 223 for the hospice segment or an additional 1.25 patients per day census wise for each site.
Average hospice revenue per branch grew more than 8% between the first quarter of 2015 and the first quarter of 2016. 

Not said:  Less branches and stable revenues will do that.  Hospice revenues decreased by $1.8 million from Q4 and are the lowest full quarter since Kindred bought Gentiva.

We expect to see continued hospice growth driven by demographics as well as expected enhanced hospice utilization rates. We also look to expand our hospice presence with tuck-in acquisitions in markets not yet adequately covered by our existing branch network.

So far this year we have acquired hospice operations in North Carolina, Ohio and Florida. We're pleased with the margin improvement in our home health and hospice businesses as they each provided on a year-over-year basis up by nearly 1% when last year's quarter is appropriately adjusted on a pro forma basis to include January.  

Not said:  Part of that Q1 margin improvement came from health care and retirement benefit reductions for former Gentiva employees.
I am glad to do my part to make our hospice more successful in care delivery.  My hospice co-workers and I don't want to personally sacrifice to enrich senior executives.  Q1 included $38 million in incentive payments to Kindred at Home executives and a relative handful of other employees.  Their bonuses alone ate up 21.5% of our first quarter hospice revenue.  That is evidence of the distortion from above.  It can't be called leadership.  It's far too selfish.

Anonymous (From Kindred where revenue declines are growth)

Tuesday, May 10, 2016

Kindred Bought CFO's House for $2.15 Million


WDRB reported on the lawsuit saga for three neighbors who fought over a shared driveway, amongst other things.  The three share a historic property just outside Louisville, Kentucky.  All were relatively new owner of their respective properties, which included a permanent access easement for the shared driveway.

Mr. Fenley's lawsuit expressed a number of concerns with Mr. Farber's contractors which caused him to offer to build a separate drive for his neighbors.  Fenley and Haynes prevailed in stopping the building of a new driveway.  Their legal stance expressed a number of concerns about Fenley's proposal, including increased difficulty with stormwater control, the removal of large mature trees that were part of a former owner's landscape design and the loss of an aesthetically pleasing entrance.

On December 1, 2015 the parties attempted to mediate their conflict without success.  Oddly, Mr. Farber's employer Kindred Healthcare had their in house attorney attend the personal mediation. The Fenley amended complaint stated Kindred had plats and survey drawings of all three properties drawn up.  That's a high amount of employer involvement in an executive's personal dispute 

This mediation occurred less than a week after Kindred Healthcare gave Mr. Farber an additional $250,000 for "moving expenses."  (Generic Hospice reported on this development November 26, 2015.)

On December 18, 2015 a division of Kindred Healthcare purchased Mr. Farber's home for $2.15 milion.  Farber paid $1.7 million for the home before embarking on a $200,000 + renovation which upset his neighbor.

On December 30, 2015 Kindred began removing the very trees Farber argued to preserve the historic landscape design.  Mr. Fenley asserts in doing so, Kindred damaged his property.

The Fenley complaint has a number of tidbits that color the deterioration of neighborly relations. It reads of strong willed people wanting to have their way.  There is little evidence of civility or the ability to come to conflict resolution in a neighborly manner.  They could not come to resolution with highly paid mediation lawyers. 

Yet, Kindred's Board of Directors chose to take two highly unusual acts.  First, they gave Farber $250,000, on top of the original $110,000 in moving expenses for 2014.  Second, the board bought his house for a premium price then took an action that Farber legally fought against with the aid and support of Kindred's legal counsel and contractors.

One Kindred employee received $360,000 in moving expenses in twenty one months.  We have hospice employees who it will take nearly fifteen years to make in wages Farber's Kindred moving benefit.

It's good WDRB reported on the story.  It's sad priorities are skewed for executives lacking the basic skills to resolve conflict.  Frankly, we see the same distortions at our local hospice site.

Anonymous (from Kindredview Avenue)

Tuesday, April 5, 2016

Kindred's Shameless Executive Compensation Made Public

President Ben Breier received nearly $5.5 million in executive pay.

Kindred at Home President David Causby's pay, fueled by his second $1 million event under Kindred, got over $4.4 million. His first $1 million event came in lump sum cash, the second $1 million was bonus money.

However the oddest compensation went to Kindred CFO Stephen Farber who needed $2.15 million to flee a dangerous neighborhood of millionaires incapable of sharing a driveway.  Kindred's board did not call the police, but instead wrote a check for nearly $500,000 more than Farber paid for the house, throwing in an additional $250,000 in moving expenses (on top of the $110,000 for moving expenses in 2014).

Kindred executives look out after their own.  The other 101,500 employees aren't so lucky.

Saturday, April 2, 2016

No April Fools: Breier Gets $3.5 million in Restricted Stock


Kindred CEO Ben Breier received 283,203 shares of restricted stock on March 24, 2016.  Kindred's stock closed at $12.57 per share on April 1 giving Breier $3.5 million from one portion of his executive compensation package.  That's no April Fool's joke but a sad reflection of misplaced priorities. 

Hospice roots are antithetical to leadership greed which spread like a cancer in the last ten to fifteen years.  Ethically our hospice site is dead, rotting from the head down.  Fortunately, we still have a few people who live and breath the origins of the hospice movement.  When they leave or retire the stink will spread.

The question is how much Ben Breier will have earned in total compensation by then.  We'll get a peek at his 2015 pay soon enough.  The executive money trough is full and overflowing.  I bet the pigs don't even need calling. 

Anonymous (from Dredkin)

Thursday, March 17, 2016

Kindred's Obsession with Numbers to Grow Exponentially


A Kindred executive once told me data is the only thing that matters, that staff achieve the targeted numbers or they're gone.  That person used intimidation and fear without any understanding that bullying distorted the accuracy of the very data they'd received.

Rather than remove the fear and intimidation, such that people can gain a common understanding of what's happening, this Machiavellian leader's solution to data distortion was to automate data collection as much as possible.  Removing the worker from the data generation chain, then beating them up for unfavorable outcomes is a form of dehumanization.

Kindred is doubling down on their numbers obsession strategy with a new effort.

Predictive analytics is the use of data, statistical algorithms and machine-learning techniques to identify the likelihood of future outcomes based on historical data.

Our hospice has a new predictive service index score for each patient.  I asked an experienced hospice nurse about the PSI score.  They said, "That number is useless."

It feels like management wants to play with numbers rather than talk to hospice clinicians.  The number enables managers to order quantifiable amounts of specific disciplines from the hospice team.  It does not feel like a tool for decision making or resource allocation.  It's a buffer or bumper from having to talk with real hospice professionals about what is going on and what the patient and caregivers truly need.

The "likelihood of future outcomes" is probability which is based on a number of theoretical distributions that rarely exist in the real world.  It reaffirms my belief that Kindred executives, like their Gentiva brethren before them, live in their own world.  It rarely makes contact with the world our hospice team works in.

Anonymous (from Dredkin)  

Thursday, March 3, 2016

Kindred Eliminates Employee Turnover Statistic


Kindred's recent annual report filing, known as a 10-K, omitted a key statistic for a company that "takes care of its people."  The annualized employee turnover number was missing.

Oddly Kindred President Ben Breier said little about employees, other than his opening pander, in the February 26 earnings call.  He failed to mention information about employees included in Kindred's 10-K. 


As of December 31, 2015, we had approximately 53,600 full-time and 48,400 part-time and per diem employees. We had approximately 2,900 unionized employees at 25 of our facilities as of December 31, 2015. 

 The market for qualified nurses, therapists, physicians, clinical associates, home health and hospice employees, and other healthcare professionals is highly competitive. We, like other healthcare providers, have experienced difficulties in attracting and retaining qualified personnel such as nurses, certified nurse’s assistants, nurse’s aides, therapists, home health and hospice employees and other providers of healthcare services. Our hospitals and nursing centers are particularly dependent on nurses for patient care. Our Kindred at Home and Kindred Rehabilitation Services divisions continue to seek qualified home health and hospice employees and therapists, respectively, to fill open positions. The difficulty we have experienced in hiring and retaining qualified personnel has increased our average wage rates and may force us to increase our use of contract personnel. We expect to continue to experience increases in our labor costs primarily due to higher wages and greater benefits required to attract and retain qualified healthcare personnel. Salaries, wages, and benefits were approximately 64% of our consolidated revenues for the year ended December 31, 2015. Our ability to manage labor costs will significantly affect our future operating results

Gentiva employees represent 40% of Kindred's total.  The recent earnings call had Kindred President Ben Breier say:

While Kindred at Home now represents about one-third of our revenues, it's approaching half of our consolidated EBIT.

As I mentioned a moment ago, with its capital light profile, Kindred at Home's contribution to the enterprise is approaching half of our consolidated EBIT with the strongest EBIT margin profile among our divisions.

At no point in the report did Kindred cite rising labor costs in home health and hospice.  Here's what the company said:

Home Health
Operating margins increased in 2015 primarily as a result of the Gentiva Merger and related operating efficiencies.

Operating margins increased in 2015 primarily as a result of the Gentiva Merger and related operating efficiencies.

Gentiva employees know what we experienced in 2016 with Kindred's far worse health insurance coverage and more expensive dental and vision insurance.  The company removed employee's prior ability to see the company's contribution to the portion each of us pays for benefits.  Gentiva employees know Kindred eliminated the 401(k) match in 2012 but aren't sure the status of any match for 2016..

The turnover stat disappeared just like the hospice division's policy to pay people fairly and equitably, internally and externally.  This leadership group is committed to former Gentiva employees like a parasite on a host.  They said it:  One third the revenue produces nearly half the EBIT. 

Monday, February 29, 2016

Who Do Kindred Execs Appreciate?


Kindred CEO Ben Breier opened yesterday's earnings call with:

"Let me start as I usually do by extending my deep appreciation on behalf of the entire leadership team to our more than 100,000 teammates across the country. Each day our partners at Kindred work hard to improve the lives of more the 1 million patients we care for annually. The excellent care delivery and clinical outcomes we generate are the direct results of their efforts."
The 40,000 from Gentiva don't feel the least bit appreciated by the leadership team if they've encountered our benefit reductions for 2016.  I'd be shocked if the other 60,000 feel appreciated given Kindred eliminated their retirement match in 2012.

Recent actions show who the leadership team appreciated.

Kindred's Chief People Officer has not been clear at all with former Gentiva associates on reductions in healthcare, retirement and sick leave benefits.  Kindred recently removed a hospice policy that committed to paying people equitably on an internal and external basis.

CEO Ben Breier talked repeatedly about Kindred's over $300 million in cash flow.  Surely a portion of that could return a 2% retirement match, provide health insurance employees can afford to use and ensure employees are paid fairly and equitably for the work they perform for the company.  It's clear they'd rather pay themselves. 

Anonymous (from Kindredful)