Thankful for Retirement

Anonymous,

Before I retired I'd noticed the disconnect between language used by executives and their actions toward hospice employees.  Generic Hospice employees suffered similar injustices as you've experienced under Gentiva, now Kindred.  Although I must say Generic Hospice executives lacked the complete tone deafness of Kindred's leaders.  Who gets $110,000 in relocation reimbursement and deserves another $250,000 for moving nearly two years after the hire?  It's not a lowly hospice employee.

I noticed a Kindred subsidiary will pay the $250,000.  It would be mildly interesting to know which one.  It would be sad if it were the hospice division with staff burdened by health insurance cuts. 

Our longtime medical director, a very talented hospice physician, advised executives to take care of their people with good pay, benefits, openness and respect.  He'd seen properly treated staff provide great hospice care with little turnover.  Last I heard he is widely ignored by Generic executives and turnover is through the roof.  What does he know with decades of hospice experience?

Healthcare has become bizarre with the over-enrichment of management to the detriment of staff.  The obsession of corporate profits over service is similarly distressing.  These two pipers will be paid.  I don't know how or when but it will happen.  Just observing from my rocker,

StrangeTony

Kindred Executive's Deep Appreciation

StrangeTony.

On this Thanksgiving it's important for Kindred/Gentiva employees to show our appreciation for the kind words executives share during quarterly earnings analyst calls.  This comes from the August Q2 earnings call.

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 the more than 1 million patients we care for. The excellent care delivery and clinical outcomes we generate are the direct result of their efforts.

Here's the most recent Q3 call from early November:

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 team mates across the country. Each day our partners at Kindred work hard to improve the lives of the more than 1 million patients we care for annually. The excellent care, delivery and clinical outcomes we generate are the direct results of their efforts.

Those employees finished enrolling in benefits for 2016 and many found worse health insurance and diminished paid time off benefits in the newly integrated Kindred.  Is this what Kindred President Ben Breier meant when he spoke to analysts in August?

But we just received back our employee engagement surveys last week. We do an employee engagement survey on the whole company, and I would say it's a good time to be at Kindred. The culture is very strong here and we'll continue to make sure that we keep our ear to the ground and do right by our employees.

Oddly, he didn't bring up the survey in the November call.  The survey is a faded memory at our hospice site.  All the talk of doing better has been followed by virtually no action.

A recent SEC filing shows who benefits from the direct result of more than 100,000 teammates.

On November 25, 2015, a subsidiary of Kindred Healthcare, Inc. (the “Company”) entered into an Agreement with Mr. Stephen D. Farber, the Company’s Executive Vice President and Chief Financial Officer, pursuant to which Mr. Farber will receive a one-time payment of $250,000 to offset relocation and other costs incurred by Mr. Farber in connection with his relocation to Louisville, Kentucky.

Mr. Farber served as CFO for Rural/Metro, an ambulance company that entered bankruptcy in August 2013.  The private equity arm of Warburg Pincus purchased Rural/Metro in March 2011.  Farber served as CFO for serial ethics abuser Tenet Healthcare until 2005 when he left to start an analytics company focused on collecting hospital bills.  Kindred hired Farber in February 2014.

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced the appointment of Stephen D. Farber as Executive Vice President, Chief Financial Officer, effective February 3, 2014.

Who waits twenty months to come up with a moving package, especially as the company already had a contract with Mr. Farber?

 • The Committee entered into a new employment agreement with Mr. Farber, the Company’s new Chief Financial Officer, to complete the succession plan from the Company’s previous chief financial officer.

Farber's contract resulted in $1,889,389 in executive compensation for 2014, with over $110,000 in "relocation reimbursement."

The extra $250,000 smells like a way to push money to a fellow member of the executive team, which actually got a raise in 2014:.

 • The Committee approved base salary increases and equity awards for the executive officers to maintain competitive total direct compensation generally within the 25th to 50th percentile of the Company’s peers; and 

Kindred at Home President David Causby has a potential $1 million bonus based on achieving integration cost savings:

The integration of Gentiva in Kindred at Home continues to proceed extremely well. I'm very pleased to announce that we're on track to exceed our previously stated goal for synergy realization this year by approximately $10 million. We now expect to realize synergies of roughly $45 million during 2015 and we also believe that we're on track to exceed our stated goal of $70 million in synergies by the end of 2016 and we'll provide more specifics on our next quarterly conference call.

We'll see if the color on 2016 includes benefit savings, experienced as reductions by the more than 100,000 team mates.  Many people in our office have not seen a raise in years and are struggling to deal with rising healthcare expenses.

How can they appreciate us so deeply without knowing the slightest thing about us?  It's a shallow form of appreciation, akin to happiness from profiting off the backs of "teammates."  It's a one sided engagement.

Anonymous (from Gendred)

Kindred Slashes Coverage for Many Gentiva Employees

StrangeTony,

Courting comes with such lofty words.  Consider these from a December 2014 edition of "Better Together".

We know that many of you have questions specific to what benefits – including insurance, 401(k), and PTO– will look like for the combined company, and we want to reassure you that our Integration teams are hard at work to address these issues. We are committed to providing a robust benefits package for our teammates within the combined company, and as soon as we have a better idea of what that will look like, we will share a comprehensive communication with you. 

The corporate marriage was consummated in February 2015. Kindred's Chief People Officer promised a smattering of plans for employees to choose from and informed Gentiva employees the health insurance marketplace would be familiar to them.  He assured California employees they would continue to have access to their HMO, which ensures physician access through a primary care gatekeeper.

The marketplace I viewed bore no resemblance to Gentiva 2015, which had at least two levels of insurance coverage higher than anything Kindred is offering for 2016.  I searched for coverage for physician visits like my current plan, $X copay for a primary care visit and $XX for a specialist visit.

I could not find one plan with this basic feature.  Kindred omitted the "ro" and has a bust of a benefits package available to many employees, especially those outside California. 

Anonymous (from Gendred)

DOJ Settlement Looms

StrangeTony,

After hours news revealed:

Kindred Healthcare confirmed it is engaged in active discussions with the DOJ in an effort to find a mutually acceptable resolution to the investigation of RehabCare Group (KND) : 

Based on the progress of continuing settlement discussions through October 2015, the Company, in accordance with GAAP, recorded an additional $30 million loss provision in the third quarter of 2015 (for a total loss reserve of $125 million) related to this matter. The Company recorded a $95 million loss reserve for this matter in the first quarter of 2015 and disclosed an estimated settlement range of $95 million to $125 million. The Company accrued the estimated loss contingency in the first quarter of 2015 at the minimum of the estimated range in accordance with GAAP as no amount within that range was a better estimate than any other amount. These continuing settlement discussions also indicate that a corporate integrity agreement will likely be required as part of any final settlement related to this matter. 

The discussions are ongoing, and until they are concluded, there can be no certainty about the timing or likelihood of a definitive resolution, the scope of any potential restrictions that may be agreed upon in connection with a settlement or the cost of a final settlement. 

The skeleton dances with renewed vigor.

Anonymous (from Kindred)

Earnings Call & New Board Member

StrangeTony,

Thank you for your words of wisdom to render unto Caesar that which is Caesar's.  This week looks like rendering time with third quarter earnings scheduled for after hours release on November 4th and Kindred's earnings call the next morning.

We may need the other mourning for Kindred's new board member.  YahooFinance reported:

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (KND) today announced that its Board of Directors has appointed Dr. Sharad Mansukani to the Board effective immediately. 

Dr. Mansukani serves as a Senior Advisor to TPG (formerly Texas Pacific Group), a global private equity investment firm with a capital portfolio of over $74 billion, and as Strategic Advisor to the Board of Directors of Cigna Corp.

Kindred already has a COO from private equity.  Now it's adding a board member from a company that makes money from buying and selling companies.  This is not a good sign, given private equity's propensity to put their profits over everything else.  Mansukani isn't new to private equity.  He's been with TPG since March 2005.  That's over a decade and reflects allegiance to the private equity model and all its management distortions.. 

Dr. Mansukani worked for Health & Human Services, specifically on the new prescription drug benefit which became known as Medicare Part D and Medicare Advantage health plans.  Private equity companies have mined both arenas for huge profits.

Consider this blast from the past, which shows how Mansukani navigated both sides of health care public policy for big profits, corporate and personal.

However, to succeed Medicare prescription drug plans (PDPs) need a lot more. Enter NationsHealth (NASDQ: NHRX, NHRXW, NXRXU). This nimble, fast-growing player demonstrated its chops by successfully enrolling and servicing over two million seniors in Medicare drug discount cards. No small feat. Sharad Mansukani, MD, NationsHealth's new chief strategic officer and a business-savvy authority on Part D, was most recently a senior advisor to Medicare Administrator Mark B. McClellan, MD, PhD. 

By teaming with NationsHealth, the folks at CIGNA are showing the market they understand the critical importance of having a enrollment and customer service infrastructure that is flexible, scalable, AND Medicare savvy.

Revolving door Mansukani did a fellowship in quality management at Wharton Business School.  Apparently he missed the part where leveraged buyout organizations, since re-branded private equity, are anathema to quality.  The world's greatest quality guru spoke those very words.

Speaking of re-branding one has to wonder how name changes for Gentiva sites are impacting volumes?  Gentiva trashed much of the value of Harden Healthcare's hospice and home health sites with its botched re-branding.  Might Kindred make a similar mistake?

Thursday's earnings call may shed some color on that.  Will it be red or black?  Dr. Mansukani is off to a strong personal financial start with over 11,000 restricted shares of Kindred stock.  That will help him continue to speak the language of business in the boardroom.  It's definitely not the language of quality.

Anonymous (from the re-branded Gentiva)