Sunday, July 17, 2016

Watching Company Assets Go to Kindred CFO



StrangeTony,

A company's chief financial officer has financial fiduciary responsibilities.  One CFO job description says:

The chief financial officer position is accountable for the administrative, financial, and risk management operations of the company, to include the development of a financial and operational strategy, metrics tied to that strategy, and the ongoing development and monitoring of control systems designed to preserve company assets and report accurate financial results.

Kindred CFO Stephen Farber is the recipient of a second relocation package which included $250,000, the purchase of his home for $2.15 million and payment of legal, design and construction of a new driveway.   Louisville's WDRB says:

Minow, who co-wrote a business school textbook called Corporate Governance, said it would be hard for the company to defend paying for Farber to move once he had settled in Louisville.

“A relocation fee is supposed to be for when they move in order to take the job,” said Minow. “You’re not supposed to pay for them to move because they don’t get along with their neighbor.”

Stout, who chairs the corporate governance group at the Minneapolis law firm Fredrikson & Byron, said the money Kindred has spent on Farber’s behalf is “nickels and dimes in a multi-billion-dollar company,” but it sends the wrong message about the “company culture” to Kindred’s thousands of employees.

Integrity starts at the top, and tone at the top is important because it sets the tone for the organization,” he said. “It’s very hard to get the employees of the company to take ethics and culture seriously if the people at the top aren’t.”

Top executives and the Board decided to mobilize significant company resources to manage their CFO's dispute with a neighbor.  It took two Louisville news organizations to shed light on the situation.

“The true test of a man’s character is what he does when no one is watching.” ― John Wooden

And this test reveals what about our company and its leaders?

Anonymous (from Kindrexecutive Sweet)

Saturday, July 16, 2016

Kindred's Executive Home Purchase Story Has Legs

StrangeTony,

The story behind Kindred Healthcare's strange purchase of CFO Stephen Farber's home in December 2015 continues to develop.  WDRB discovered Farber had moved from the home months earlier, casting doubt over Kindred's concerns regarding Farber's personal safety.  WDRB reported:

But records in a Jefferson County court case now show that Farber had already moved from the Glenview home months before he and his wife decided to sell it to Kindred in December.

The case also reveals the extent to which Kindred has committed its corporate resources to assist Farber in the ongoing dispute with his ex-neighbor, real estate investor David Fenley.

Last August, for example, it was Kindred that hired and paid the invoices of a land surveying and engineering firm that designed a new driveway on what was then Farber’s property. The driveway, now under construction by Kindred, could cost as much as $360,000 in all, according to a deposition.

Governance expert Nell Minnow weighed in on the home purchase by Kindred:

“There certainly can be no question of safety if he has already moved,” she said. “At the very least, it sounds deliberately misleading.”

Nell Minow is vice chair of ValueEdge Advisors which advises big investors on corporate governance issues.

John Stout, a Minneapolis lawyer who previously chaired the corporate governance committee of the American Bar Association, said the situation “obviously doesn’t reflect well on the company, and it doesn’t reflect well on how they explain this.”

Susan Moss, Kindred’s corporate spokeswoman, did not respond to a phone call and a set of emailed questions from WDRB. Moss has not responded to inquiries about the Farber home purchase since January.

Jan West, an attorney representing Kindred and Farber in the ongoing litigation over the driveway, also did not respond to a request for comment.

I can see the company is non-responsive to more than employee needs.   From pay to home purchases Kindred's new executive drive is clearly designed to benefit senior leaders.

Anonymous (from Kindred small fry)

Saturday, July 2, 2016

Bad Dream: Kindred to Centralize More Functions for Greater Sinergy?

StrangeTony,

I dreamt Kindred at Home President David Causby met with senior hospice leaders in search of savings for the remainder of 2016 and 2017.  This came despite Gentiva's extraordinary contribution to Kindred's financial health:

Gentiva currently makes up about half of the company’s earnings before interest, taxes, depreciation and amortization “which is pretty significant.”

My dream visioned how hospice functions might be centralized to drive cost savings and raise margins.  I saw a new CBO, Centralized Bereavement Office, where the bereaved can call for help with their grief? 


I heard the company's phone response to a calling griever:

You've reached Kindred at Home Hospice's Centralized Bereavement Office.  Our hours are 8:00 am to 5:00 pm Central Louisville time.  Please listen to the following options as our menu has changed.  If you are grieving the death of a spouse in English, press 1.  Para Espanol, marque Dos.  For Cajun, shout "TREE."  If your loved one died before you signed the mandatory arbitration clause for dispute resolution - Kindred at Home Hospice bereavement services are not available to you at this time.  Thank you and have a great day!"

When I hung up my smart phone spoke to me:

"Hello, I'm CORE (pronounced CORRIE).  I'm your hospice social worker." 

I told CORE that I did not need a social worker  She replied:

"God forbid you ever need hospice, but should you, I'll be glad to help with your social service needs."

I told CORE we have five talented social workers and I would not need her service   She said:

There are no longer five social workers at your site.  I am the exclusive social worker for all Kindred at Home-formerly Gentiva Hospices.  Once our re-branding is complete someone will update this message."

I rushed to our site to find five empty offices.  The name posted next to each door was CORE BITDAR.

I needed someone to talk to so I called our Chaplain on call.  Instead of my dear, wise friend I got:


Hello.  Welcome to Kindred's Chaplain by Phone line.  God is closer to you than the phone you are holding to your ear.  If you are using a microphone and earbud please adjust accordingly.  If what you've heard thus far has not provided you comfort please remain on the line and a person of faith will be with you shortly. 
Your call will be answered in the order it was received.  Kindred at Home Hospice's spiritual care coordinators specialize in providing customized spiritual support at key junctures in the dying process.  Please answer a few questions that will help our staff better meet your needs.  Press 1 if you believe in God, 2 if you believe there is no God and 3 if you are agnostic.  

Beep.  Your expected wait time to be served is ____ minutes.  There are _____ people (believers, atheists or ignoramuses)  ahead of you in the Kindred at Home Hospice bereavement queue.  

Kindred at Home Hospice believes matters of faith are individual and personal.  That's why we set up Kindred at Home Hospice's 24 hour a day Chaplain by Phone service.  If you are a struggling griever please hang up and call the Kindred at Home Hospice Centralized Bereavement Office.  Your courtesy in this regard will enable our chaplains to serve patients and families yet to experience the tragic loss of their beloved. Thank you and have a great day!

I was not having a great day at all.  I just needed someone to talk with, someone who I knew and cared.  Surely, one of our big hearted, giving volunteers was around.   Our Volunteer Coordinator's office had large chains on the door.  The sign said to go to www.KindredatHomeHopsiceVolunteerbyDroneservice.com.

What the ...?  Kindred leaders instituted a Volunteer by Drone service.


Their website read:

Drones currently provide most of the tasks historically performed by a human volunteer.  A drone can hover in a patient's living room providing an extra set of Kindred eyes for reassurance (Note:  drone recharging times may vary). 
Should you or your loved one live in a high crime area Kindred offers the option of an armed drone.  Kindred's trained staff would have the sole ability to engage the drone's security features. 
This Kindred at Home Hospice - Personal Home Drone Security Service (KAHH-PHDSS) is provided for an extra fee as it is not a core part of Medicare's hospice benefit.  

When I awoke I was sure Causby and company had their thinking caps on as to how to reduce heads, the employee kind, while centralizing critical functions.  I venture they want Kindred at Home Hospice employees gathered en masse for potential leadership interventions.  Proximity makes it easier to apply management attention, which expressly excludes compensation increases or any form of sincere thank you.  It's a corral and control function.

Cost savings, also known as sinergies, are needed to drive executive pay.  Sinergies will arrive a multitude of ways, most poorly planned and woefully executed.  It's Kindred where "Executive Pay Matters."  The rest, not so much.

Anonymous (wishing Kindred was just a bad dream)

Saturday, June 25, 2016

Causby's Next $1 Million Bonus to Come from Showing Up

StrangeTony,

On March 30, 2016 Kindred Healthcare added another employment agreement for Kindred at Home CEO David Causby.  For staying 16 months with the company Causby will earn another $1,000,000.  Causby merely has to make it to August 1, 2017 and his work must be satisfactory.

During this time former Gentiva employees will lose their retirement match from Kindred at Home.  It's slated to end December 31, 2016.  Causby should have a great 2017 as his pay soars on the backs of those delivering care.

How many Gentiva employees knew about Causby's retention bonus?  How many know about the stepped down 401k match for former Gentiva employees?  How many know when the company will make good on the match?

Gentiva employees are providing Kindred's synergistic cost savings through greatly reduced benefit contributions from the company.  What Kindred pocketed in 2016 should grow exponentially in 2017.  That's when the 401k match evaporates completely.

Cauby's agreement was executed by Kindred's Stephen Cunanananan, Chief Peephole Officer.   Former Gentiva employees would recognize Cunanananan's role as Vice President for Human Abuse.  We're now part of Kindred, where the executive mantra is "My Pay Matters."

Anonymous (from Kindredful)

Wednesday, June 22, 2016

Kindred Pays $39 million for Arkansas at Home

StrangeTony

Kindred Healthcare plans to purchase the State of Arkansas' home health, hospice and personal care agencies in an announced $39 million deal.  This deal is 18 times larger than Kindred's last buyout, the $2.15 million purchase of CFO Stephen Farber's personal home.


Kindred intends to keep the Arkansas agencies, yet plans to sell the multi-million dollar Louisville estate.  When will it be listed?

Anonymous (from Kindredful)

Thursday, June 16, 2016

Kindred's Low Bar Investor Presentation


StrangeTony,

Kindred Healthcare President spoke to the Bank of America Merrill Lynch Healthcare Conference in Las Vegas.  An early remark expressed regret at keeping attendees away from the bar.  Then he moved on:. 

"God forbid you need hospice."

Many of our hospice patients spent their life bellying up to the bar.  There is a price to pay for habitually seeking solace in things incapable of providing it.

Kindred at Home has 38,340 caregivers.  How would they take his comment? 

Eventually our hospice may need hospice due to high financial leverage and poor health choices.. Our President might recommend another drink or smoke to relieve anxiety.  

Anonymous (from Kin-forbid)

Friday, May 13, 2016

Ben Breier's Hospice Tale


StrangeTony,

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)