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.