Employees Moving Backward under Humana Ownership

Strange Tony,

Employees received a "Moving Forward" communication last December.  It said:

Q. What should I do during the transition?

A. It is business as usual for all of us at Kindred and your responsibilities will not change. Please continue to act with the same dedication and focus that you always have as you deliver compassionate care to your patients and support your fellow colleagues. 

Leaders cut five critical office positions under the ruse that technology would fill the gap created by their absence.  Unstable cloud technology and a home health medical record system created gobs of scheduling work that did not exist previously.  The company obstructed the delivery of compassionate care to the point that talented, dedicated, long-term employees are talking of leaving.

Our local director shared our owners Humana/WCAS/TPG cut our holidays 25% for 2019.  We no longer have an Employee Appreciation Day or our Floating Holiday.  Curo pays straight time, not time and a half, for holidays.  That change would mean a 33% holiday pay cut in addition to the 25% decrease in the number of paid holidays.

Last December executives informed employees:

Q. What changes will Kindred employees experience?

A. At the field level, we expect there will be little to no change. At this early stage we do not yet know the effect on support-level positions, but we expect that the separation into two new companies will create exciting opportunities for many of our employees. A team consisting of members of Kindred leadership as well as leaders from our other partners in this transaction is hard at work to determine how best to position these two new companies for success. 

Little to no change turned into decimating our hospice.  Co-workers learned other sites are experiencing the same destruction in service levels.  As stated above our leaders and new owners determined these changes which cause suffering for patients, families and employees.

Our leaders hold significant equity positions in our company.  Disturbingly, they will be enriched by the harm they have inflicted.  Cutting two benefit days and paying straight time on holidays will save the company at least $12 million.  That will flow to the bottom line as measured by EBITDA.

Humana will buy the rest of our company (60%) by paying a multiple of EBITDA.  The holiday benefit cut will add $100 million to Humana's purchase price.  C Suite executives will get a chunk of that.

Humana, WCAS, TPG and our executives inflicted employee pain for their earthly gain.  The cuts come after years with no raises.  Recent Kindred/Curo/Humana corporate moves indicate more cuts are likely.

Humana's new Chief Strategy Officer comes from another financial rapscallion, The Carlyle Group.

In the role of Chief Strategy and Corporate Development Officer, Agrawal will report directly to Humana President and CEO Bruce Broussard, and will serve as a member of Humana’s Management Team. Agrawal will be responsible for advancing the company’s strategic insights and planning process, establishing direction for merger, acquisition and joint venture activities, while maximizing capabilities to create competitive advantage.

Agrawal brings more than 20 years of experience in planning and implementing strategies to drive growth and performance improvement across publicly traded and privately held health care organizations. He comes to Humana from The Carlyle Group, a Washington, D.C.-based financial services and investment firm, where he served as Senior Advisor.

Previously, Agrawal oversaw strategy for Ciox Health, a health care information management company, as President and Chief Growth Officer. Agrawal has also served as President of Harris Healthcare Solutions and Partner at McKinsey and Company.  

In the same press release Humana announced that CFO Brian Kane, originally from Goldman Sachs, would lead Humana's Care Delivery efforts, likely the future home of Kindred at Home should Humana eventually buy the remainder of our company.

Humana's buyout brought staff cuts, worse health insurance and holiday benefit cuts which stand to further enrich our senior executives.  Employees are clearly moving backwards.  Those with standards will fight back or leave.  Our employees want to work for a local hospice that provides outstanding care.  It's a shame we have to look outside our company to find one.

Anonymous   (from a once great hospice site with lots of heartbroken staff)

Humana and Partners Set Hospice Roots Aflame

Anonymous,

I can't help but think of the roots of hospice and how far things have gone astray, especially your hospice's latest buyout from as you call them, financial rapscallions (60% owners) and Humana (40% owner). 

Hospice founders volunteered their clinical expertise and time with no expectation of payment.  Goodhearted people worked to keep patients comfortable, supported and pain free.  They created support systems for patients and stressed caregivers which included pastoral care.  They companioned the dying, often sitting with family as the time neared for God to call their loved one home.

When Medicare first considered covering hospice care one group fought against it tooth and nail, home health.  At every turn home health obstructed efforts by early hospice leaders for legitimacy, resources and support.  Home health has been hospice's enemy. 

Hospices went from nonprofit to the majority being for-profit corporate owned.  Many corporations have hospice and home health divisions.   My former hospice was acquired by one such company in 2011. 

Our Vice President said, "Running a hospice is easy.  Running a home health is hard."  That very same VP spent their time fixing hospices that experienced staff walkouts, risked having their license pulled by the state and coaching bad leaders on how to fire people.  During my time with the company I never heard this VP advocate for staff raises or thank staff for the incredible work done day in and day out. 

Humana's stated intent is to integrate hospice and home health into their home continuum of care offerings.  This move will further isolate hospice from its founding core values. 

I would like to hear more about Humana's efforts to turn your hospice into a homecare continuum of care offering.  I am especially interested in the perspectives of longtime hospice staff and clinicians to any changes. 

Retirement remains highly satisfying.  I heartily recommend it.

Strange Tony

Toad to Join Farber at Mednax

Strange Tony,

We learned our Vice President Operations (VP Ops) Toad has left the company to join former Kindred Chief Financial Officer Stephen Farber at Mednax.  Toad will take his pocket coin jingling to the neonatal medical practice company where Farber stands in line to take over as CFO in November.   

Kindred purchased Farber's house at a premium after our CFO's neighborhood turned into War of the Roses.  Farber received two moving packages from Kindred's executive enriching board.  Mednax is in Sunrise, Florida not Louisville, Kentucky.  Farber's Kindred buyout winnings of $2.1 million meant he could afford his own move. 

It's not clear where Toad will be or what his new role is with Mednax.  Open benefit enrollment for 2019 looms and executives used "sustainable" and "harmonize" in their announcement.  These are not good words for employees who've gone years without raises.  Did Toad get an early peak at benefit cuts and bolt?

Humana offers employer sponsored insurance products and our 40% owners could reverse our ever declining coverage for outrageous sums of money trend.   There's no mention of that only the need to harmonize benefits between Kindred at Home and Curo Health Services.  That usually means settling on the lower benefit between the two companies.

Curo Health's Larry Graham heads our Kindred at Home hospice division.  Under his leadership at Amedisys and Curo unethical acts occurred.  As COO at Amedisys Graham oversaw operations during a period of fraudulent Medicare home health billing.   Amedisys settled with the Justice Department for $150 million in 2014.

Curo, founded in 2010, paid a $12.2 million settlement with the Justice Department in April 2017 for paying kickbacks in exchange for hospice referrals.  The illegal practice began in 2007 but continued until 2014, four years after Curo purchased Dallas based HospicePlus.  The settlement does not mention Curo's compliance program or why CEO Larry Graham did not catch this practice.

Admittedly Graham was busy with the sale of the company from financial rapscallion GTCR to fellow rapscallion Thomas H. Lee.  Holding onto revenues is paramount in a sale evaluation process.  It would be interesting to know if GTCR disclosed Curo's paying for referrals or if Thomas Lee's due diligence discovered anything shady.  Financial rapscallions are not forthcoming on those issues.

Our hospice awaits a new executive and our new benefits.  It's hard to believe but both can be worse than what we have now.  Jingle, jingle go executive pockets (filled on the backs of workers).

Anonymous (from Curo at Home HospiceMinus)

Humana Medical Director & CFO Talk Kindred at Home

 Strange Tony,

Recent stories revealed Humana's plans for Kindred at Home/Curo.  Humana Medical Director Roy Beveridge, M.D. wrote a column for "Home Health Care News."

Since Carol lives with COPD, the nurse can use predictive analytics to alert the physician to a potential exacerbation or use remote monitoring to make sure her breathing is stable. Moreover, through telemedicine, the Kindred at Home nurse can instantly connect Carol from her home to her doctor — including a specialist or pharmacist, ensuring Carol gets optimal care and assures she is doing everything she can to stay in her home.

Humana and Kindred are a powerful duo and have the ability to transform home health care. Together, through post-acute visits, care coordination, clinical services, technology, and data and analytics, we’re able to extend the physician and their practice so Carol and others (Humana insureds) are able to stay where they want to be — at home.

Our hospice's predictive analytics are ignored by clinicians as meaningless.  We don't have telemedicine and I hope we don't get it.  Hospice patients deserve the peace, comfort and dignity that medical technology cannot bring.

After closing the Curo deal Humana/TPG Capital/WCAS demoted Kindred at Home's National Hospice Medical Director.  I don't know if Humana's Medical Director Roy Beveridge had any say in that decision.  Dr. Beveridge made $2.7 million from selling Humana stock in early August.

Humana CFO Brian Kane said at an investor presentation, “What we are trying to do with health care is fundamental transformation."  CFO Kane worked for Goldman Sachs for 17 years before joining Humana in 2014.  Kane sold stock worth $418,000 earlier this year and currently holds $6.2 million in Humana stock.  

Humana and its two financial rapscallion partners paid nearly twice as much for Curo (15 times EBITDA) as it did for Kindred at Home (8 times EBITDA).  Loyal employee shareholders lost big when Kindred's executives and board sold out on the cheap.

Kindred/Curo executives profited handsomely under their deals with Humana and its greedy partners.  Kindred at Home employees continue to wait for raises as they've patiently done for years.  Glassdoor employee reviews indicate lack of pay raises to be a common experience across the company.  The pressure to keep wages down will remain under Humana/TPG Capital/WCAS ownership.

I wonder how Kindred at Home will do all the new things Humana executives want if they don't reward talented employees.  One in four KAH employees leave the company annually.  Kindred at Home President David Causby received a bonus for increasing staff turnover last year.  How high can both numbers go?

Humana's goals for Kindred at Home/Curo face considerable headwinds from executive leadership's blinders, employees who are waking up to the unbalanced hand the company has dealt, the failure of technology to deliver relationships with depth and commitment and the fragile economic position of a highly leveraged combined KAH-Curo.  As a minority owner Humana is not in control.  You wouldn't know it from CFO Kane's and Dr. Beveridge's comments.

Anonymous (from Curo at Home Hospice)

Curo's Hospice Staffing Model

StrangeTony,

Our local hospice branch manager mentioned the new Curo staffing model.  They've provided no details thus far but prior Curo employees weighed in around the web. 

The staffing model is very lean, leaving the team over worked and under paid.

Management does not care about overworking employees and their mantra is “everybody is replaceable, leave if you don’t like it”.

All the good experienced employees are being forced out to be replaced with uneducated employee's, to allow low dollar hourly pay rate. 

Management is poor and not a good environment. All they focus on is the numbers and not the patients.

The people in charge are incompetent and dishonest. More drama within company than a teenage school dance.

There are too many patients, and not enough staff. 

The management was ungrateful and disrespectful. Never satisfied and always adding more to the nurses weekly. Nothing was ever good enough. They were all about the numbers and not the patients.

Those who do good work are rewarded, those who do not will not be.  

Census is all that matters and expect all staff to work non-stop. Until burn-out happens, retention is not important to them. 

Nurses are the ants of this operation where they make you work 70 hrs, average a week and salary you for 40. They pay you $2 for on call and don't pay you for your time to do you visit. They expect you to work all day, all night, all weekend, and of course, be happy about it.

If you question anything you become a target and soon be goon, seen it too many times with co workers.    

Management drinking on the job. Management covering for one another. If you question what is going on you become their target.    

Management has no respect for employees, they will replace you at any time for no reason.

Management encourages cutting cost to pad their bonus structure and turns a deaf ear to complaints from patients/families about needs not being met.  

Leaders who don't listen will ultimately be surrounded by people who have nothing to say.

They don't care one iota about their employees. All they care about is twisting the numbers as they report "adjusted" EBITDA. They will make the numbers say anything they want.

Lies lies lies! Bad employee morale. Leadership act as if they are children at school. Constant drama. 

Employees are over worked with poor compensation. Expectations are unrealistic. 

Small changes turned into firing half our staff and taking away everything that set us apart from other hospices.

Three TOTAL staff in the office if you have less than 100 patients, this is including the DOO, DCS, and one other person.       

Our hospice has way more staff than some of these comments.  Our branch manager displayed some of the listed characteristics under Kindred.  I expect those will be magnified soon.

Reductions can come from honesty/fair severances or from bad leaders psychologically breaking people and kicking their carcasses out the door.  Our hospice saw enough psychological torture under Kindred and prior owners.  Our team does not need or want any more.  If positions need to be reduced Curo's management should be adult about it.  

Anonymous  (from New KAHtivacare-plus Hospice)

Toad Now Curo Level Executive

Strange Tony,

Executives held a conference call on Kindred at Home's progress in splitting from mother ship Kindred Healthcare.  Kindred bought Gentiva in February 2015.  Hospice, home health and community care were strategic post-acute care services until December 2017 when Kindred executives and the board decided to cash in, lever up the subsequent companies and roll the dice that they could make yet another fortune in a few years time by partnering with financial rapscallions.

Thirty four and a half months of integrating companies had to be undone.  Executives planned the split with change in control compensation and new equity positions swimming through their greedy heads.

KAH President David Causby updated the hospice division by introducing new senior executives, all from Curo Health Services.   After a few moments of technical difficulties hospice employees heard the voice of our new chief, Larry Graham.  He shared a lot of words about people he's worked with a long time and trusts, i.e. not Kindred.  Graham and his predecessor made two different financial rapscallions big money, Thomas H. Lee Partners and GTCR Golder Ranuer.  Larry enters the new arrangement with outsized pay, an equity stake not available to employees and massive incentive compensation. 

Regional positions have both Kindred Hospice and Curo Health executives sharing roles.  I expect the Curo people will mine the unbalanced brains of Kindred Hospice executives before sending Kindred leaders packing.  Gentiva-Harden and Kindred-Gentiva employed a similar strategy of milking knowledge then jettisoning excess leadership.

Nearly every executive spoke about the importance of our people but not one mentioned fair pay, competitive benefits or the possibility of a raise.  Fellow hospice employees at our site have gone years without a raise.

I learned after the call VP Toad is Curo material and been promoted.  His new title is Senior Assistant Executive Vice President of Market Finance Compliance.  Toad will hop in and inflate himself in any situation that threatens the future financial success of our Senior Executive Team, be it severe competitive disadvantage, financial peril from paying employees fairly or legal jeopardy from admitting and keeping patients that do not qualify for hospice.

How did an executive with poor people skills and unbalanced priorities get promoted?  Apparently Toad's father-in-law works for one of the financial rapscallions intent on making a fortune from flipping Kindred at Home and the Kindred Hospital company. Greed is all in the family and our hospice is square in the middle of it.

A few long term employees are determined to keep hospice service levels up but it gets harder with each new hire.  Experience out, question mark in.  I wish I could identify the criteria for bringing new people in but at this stage it is not discernible.

With Toad's promotion our hospice will get a new Vice President.  Unfortunately they can be worse.  It seems improbable with Toad's multiple failings but Glassdoor comments indicate Larry Graham is up to the task of appointing someone less appealing.

Anonymous (at Southern KAHtivacare Hospice)

Broussard Talks Hospice in Humana's Q2 Earnings Call

Strange Tony,

Humana owns 40% of our hospice alongside two financial rapscallions.  CEO Bruce Broussard spoke of Humana's interest in caring for patients with terminal illness in the recent earnings call.

Over the last year, we've continued to make significant advances in our enterprise strategy, particularly in the past few months as demonstrated by our recent investments in both Kindred at Home and Curo Health Services. With a continued focus on helping seniors achieves their best health, we are striving to reshape healthcare by expanding access to high-quality, value-based care in both primary care and home health. 

Humana's CFO said the company used approximately $1.1 billion in parent cash to buy the 40% stake in Kindred at Home and Curo.  Parent cash could've bought 100% of Kindred at Home and had two divisions to spin off, LTAC hospitals and RebabCare.  Humana would've had $280 million leftover to invest in Curo.  Instead Humana did a squirrely deal with Welsh, Carson, Anderson and Stowe (WCAS) and TPG Capital, the employer of a Kindred board member.

In the call Humana's CFO added "we expect reasonable adjusted EBITDA growth in our healthcare services segment, as the Kindred results are annualized and our other businesses in the segment, particularly our own clinics, improve."

Broussard stated in his prepared remarks.

Turning to home, we recently announced the completion of the acquisition of a 40% interest in each of Kindred at Home and Curo Health Services, collectively the largest home health and hospice operator in the nation. As we previously indicated, we are striving to do something that has never been done before in home health -- transform the payment model into one that is value-based, encouraging a transition for maximizing volume to focusing on managing health and chronic conditions, such as COPD, congestive heart failure, and diabetes to prevent or slow disease progression. This movement to value-based care and aware from a predominantly therapy-based methodology, is aligned with the recent CMS proposal for changes to the home health payment methodology, which was anticipated when we entered into the transaction.

Broussard partnered with leveraged buyout firm WCAS, which employs ex-Medicare Chief Tom Scully.  WCAS is also Broussard's former employer and sponsor of his first fortune.

In that regard, we appreciate the model proposed by CMS and welcome change that aligns home health with pay-per-value and improved clinical outcomes, reducing preventable events. While the ultimate transformation will take many years, upon closing of the transaction, we immediately launched test-and-learn pilots aimed at both operational and clinical improvements in four markets: Richmond, Virginia; Charlotte, North Carolina; Virginia Beach, Virginia; and Dallas, Texas. These pilots incorporate a pay-per-value mechanism in addition to the traditional fee-for-service payment based on four quality measures: hospital admissions, hospital readmissions within 30 days, emergency room visits without hospitalization, and timely initiation of home care specifically within 48 hours of referral or an M.D. order.

In addition, in order to create differentiated home health model, we had the opportunity to weave the richness of Humana at Home telephonic and in-home engagements, as well as Humana pharmacy resources, into the skilled nursing provided by Kindred at Home clinicians. Over the next year, we plan to leverage Humana predictive modeling to identify additional clinical interventions, integrate Humana pharmacy resources to conduct comprehensive medication reviews, and extend our care management best practices from Humana at Home into the Kindred at Home homecare environment.

We will also reduce friction in the authorization process to ensure Kindred professionals are in the home within 48 hours of a referral or supplement the ordering physician through telehealth with a virtual M.D. to expedite the delivery of care. We expect the changes we are making in the home health space will not only benefit our Medicare Advantage members, but also our Medicaid members over time.

The continued development of our in-home capabilities, together with our demonstrated clinical capabilities in Medicare Advantage uniquely position us to serve the Medicaid population, giving us confidence that we'll be successful in growing our Medicare platform through procurements. Under our recent statewide award in Florida, we expect to serve an additional 141,000 members, an increase of 44% from our existing Medicaid membership.

The Florida contract was awarded based upon the ability of plans to achieve the Medicaid agency's goals. These goals included creating enhanced provider and member experience, the ability to reduce preventable inpatient and outpatient events, high-quality scores, innovative and effective methods to deliver integrated care, and integration with the community and support of Medicaid beneficiaries.

We've been successful in achieving strong results across these areas by leveraging the capabilities that have positioned us as a top Medicare Advantage plan, including our capabilities in chronic condition management, integrated care delivery, value-based provider relationships, and community programs designed to address social determinants of health, such as food and security, and social isolation. While we are confident in our capabilities and expect to be successful in the procurement process, consistent with our previous remarks, we will continue to assess length of time to scale and potential barriers to entry at the state level, while considering potential M&A opportunities in the Medicaid space. In that regard, we appreciate the model proposed by CMS and welcome change that aligns home health with pay-per-value and improved clinical outcomes, reducing preventable events.

Broussard's excitement over home health is clear in his remarks.  What about hospice?

David Windley -- Jefferies -- Analyst
Good morning. Thanks for taking my question. Going back to Kindred and Curo, and understood those are investments not full acquisitions. Integration is maybe not the right word, but how do you think about optimizing or harmonizing your workflow between those entities and your internal home health initiatives to drive more cost savings for the member base? I'm thinking about what could manifest as a trend-bender as we think into 2019 and what has to happen to make that a reality?

Bruce D. Broussard -- President and Chief Executive Officer 
At the time of close and pre-close, we had a lot of planning of what would be our top priorities in engaging with Kindred. I'll wrap around a few things. First is we're going to test and learn in a number of markets and be able to really focus more on just not about bringing our home health business over to Kindred, but more importantly, bringing the ability to prevent preventable events from happening. We have a number of things going on that are focused more on nursing-oriented patients that have chronic conditions that can be managed in the home.

First, we're just rerouting more effort nursing area as opposed to the therapy area. That's the first thing. As you mentioned, the trend-bender out of this is reduced admissions, readmission, our rates going down, ER visits going down. That's our measurement of success there, by focusing on these chronic conditions.

Part of that test will also be how we bring telehealth into the home. The telehealth platform will not only allow us to be more convenient in bringing care into the home, but the second thing is it also will help us with our star scores and other preventative measurements that that we can get into the home quicker, both in being able to do it more convenient as a result of not having to get people transported there and, in addition, working through the appointment schedule. So, we see two combinations here in our test-and-learn. One is around how do we reduce the preventable events from happening and then secondarily, how do we continue to increase our performance on our quality measurements.

David Windley -- Jefferies -- Analyst
Thank you. 

The following interchange showed CEO Bruce Broussard soft pedaling Humana's vision of being the largest hospice operator in the U.S.  Humana paid a huge premium for Curo relative to Kindred deal pricing.

Frank Morgan -- RBC Capital Markets -- Analyst
My second question, obviously with the Curo acquisition, you must like the hospice business. So, my question is, with hospice being carved out of the MA benefit today, what's your short term and your longer term view there and also just any thoughts in the context of the future for value-based purposing for hospice? Thanks.

Bruce D. Broussard -- President and Chief Executive Officer
Hospice for us is really, we look at that as a service we are participating in and providing to the healthcare community, and we leave it ultimately up to the caregiver, the family, and the physician to decide where is the proper place for an individual.

But once that decide that it moves from a restorative to pain management kind of treatment, then we are there to serve them and integrate that into offerings we have. In regard to is it in or outside of Medicare Advantage, we really look at it more is it the right thing to do for the family member and then ultimately be able to help them with the transition of quality of life.

We do believe, over time, that hospice and palliative care will continue to be more and more important parts of the care model as we see the need for it. We see people living longer and at the same time, treatment options at end of life become more intense or there are fewer of them and people make this choice that is probably one of the less used area of healthcare today that probably have a large, positive impact on people's life as they think about where they are in their stage of life.

 For us, we are more a recipient of it. We are believer it's the right thing to do and we are a believer that we will provide that service to our members if they choose to.\

The payment model is less of an issue for us and insignificant in our decision making.

Frank Morgan -- RBC Capital Markets -- Analyst
Thank you.

 
Broussard provided mixed messages to hospices in his call.  It's an important service for families and the payment model isn't important.  However, as people have less treatment options hospice has a role to play.  What if insurance denials result in more insureds having few to no treatment options?  In that case hospice would be a cost saving measure for Humana.

If payment were insignificant why would Humana's CFO talk about Kindred's contribution to reasonable EBDITA growth for the second half of 2018?  He went past EBDITA as a measure saying the company would only report adjusted EBDITA for Kindred at Home/Curo.  Adjusted EBDITA is a financial rapscallion measure. 

Cost control measures have already begun at our hospice.  WCAS, TPG and Humana have set clear financial performance expectations.  The only window into these is Humana's SEC filings.  Financial rapscallions don't disclose.  

Anonymous (from KAHtivacare Hospice managed by Curo Executives)

Pushing Kindred Hospices into Curo's Management Structure

Strange Tony,

Kindred at Home (KAH) President David Causby welcomed a new hospice division executive in Curo Health's Larry Graham.  Together they are integrating Kindred's 178 hospices into Curo's 245.  Kindred at Home's hospices are much larger than Curo's, over twice the size on an average revenue basis.   Significant overlap exists in a number of hospice markets..

Kindred at Home's new owners, TPG, WCAS and Humana, expect significant cost reductions in the hospice arena from combining Curo and Kindred at Home.  Causby oversaw the integration of Harden Hospice into Gentiva as a newly promoted Executive Vice President-Chief Operating Officer.  That integration came up $150 million short of revenue expectations.   That's a lot of business to drive away.

Moving Forward communications have avoided personnel reductions to date.  Early casualties can be found in the medical director arena.  Kindred's former Hospice National Medical Director now fills a regional position.

Cost control is the mantra under KAH's new National Medical Director.  Insurance like approvals are needed for a number of hospice interventions.  Board certified hospice physicians have to ask management for approval for certain medications or treatments to treat symptoms and/or manage pain.  It's not clear how this process might delay needed care for hospice patients or deny it altogether.  That will play out over time.

Very little has been shared locally about changes but our hospice managers seem distracted, even disconnected.  They may be trying to wrap their minds around new targets to meet, possibly Curo's staffing model.

The way work is done is important.  Hospice was founded on compassion, teamwork and collaboration.  Respect, integrity and openness are in short supply at the moment.  Win/lose competition has reared its ugly head at our site.  Management fomented chaos since the double KAH-Curo buyouts were executed.  

Gratitude, appreciation and raises disappeared long ago.  There are no signs of a pay increase.  Hospice has its own intrinsic rewards but the work carries an emotional toll.  Bad management adds an additional unnecessary burden that can drive employees away.

Financial rapscallions prefer a lower average wage.  This emphasis discounts the value of seasoned, experienced employees, something critical in the hospice arena.  Seasoned staff are integral to quality patient care/customer service and are necessary for mentoring/training new employees..

Massive change is underway.  It's mostly subterranean at this point.  To date leaders have been massively enriched while employees wrestle with stagnant pay and deteriorating benefits.  I'll write as more information arrives that illuminates executive priorities for our hospice. Hopefully it won't be years before my hospice co-workers get a real raise.

Anonymous (from KAHtivacare Hospice)  

Kindred Sold Cheap, Curo Went for Far More

Strange Tony,

Brigade Capital sued to stop Kindred's breakup sellout to two private equity firms and Humana.  The investor claimed the deal severely undervalued Kindred. The court ruled in Kindred's favor on March 27, 2018.  Kindred shareholders voted March 29, 2018 to sell out.

Humana and its financial rapscallion partners announced the deal to buy hospice provider Curo Health on April 23, 2018. 

Both Kindred and Curo had leverage around 6 times EBITDA.  The two companies shared a similar capital structure.

Had the Curo deal been announced earlier Brigade Capital would have had a stronger case.  Kindred at Home sold for 0.78 times 2017 revenues while Curo went for 3.03 times 2017 revenues.  Buyers paid nearly four times more for Curo than they did for Kindred at Home.

Long term Kindred investors did not make out well.  Kindred's last 10-K showed a mere 1.87% return over a five year period for long term shareholders.

The end result is Kindred at Home will have $3 billion in revenues.  It will also have $3 billion in debt, a massive increase from pre-buyout levels of $1.1 billion.

This is the new face of Kindred at Home.  Despite buyout after buyout, legacy employees have never been in this precarious a position.  Pray for coworkers as management gets marching orders from executives and owners who vastly overpaid for Curo relative to Kindred..

Just as Brigade Capital received short shrift, so may Kindred Hospice employees under Curo's executive rule.

Anonymous (from KAHtivacareplus Hospice)

Humana, Financial Rapscallion Partners Close on Curo

Strange Tony,

The second leg of our hospice buyout happened today.  The first leg had Humana and two financial rapscallions purchase Kindred at Home.  That occurred on July 2nd.  Nine days later the same owners closed on Curo Health Services, another hospice provider with 245 locations.  Prior news reports indicated Curo's management would lead Kindred at Home's hospice division.

Curo settled with the Justice Department in April 2017 for $12.2 million to make an investigation go away.  Curo was accused of paying kickbacks for admissions. Curo's President Larry Graham has not publicly addressed the settlement. 

Our new owners have confidence that Mr. Graham is the right man to lead the hospice segment.  Graham does have a record of growing margins at Amedisys.  Employees asserted the company manipulated patient assessments, as well as treatment plans, to maximize Medicare reimbursement.

Curo's average hospice census is 40 patients.  Kindred at Home's average hospice census is 75 patients.  Gentiva's Justice Department settlement for fraudulent billing occurred in February 2012. 

Two have become one, under the ownership of three.  The smaller will lead the larger.  The more recently unethical hospice will head the division.  Kindred at Home has 245 new little hospices with a documented history of cheating in the Dallas-Fort Worth area. 

Something is moving.  Our hospice employees will find out what soon enough.

Anonymous (from KAHtivacareplus hospice)

VP Toad to Join Curo's Dubious Executives?

Strange Tony,

It's been one week since Humana and two financial rapscallions purchased Kindred at Home, the Old Gentiva plus Integracare and Professional Medical's home health and hospice agencies.  There's a slight unease at our hospice.  We've not seen hide nor hair of VP Toad.

With the Curo Health Services buyout looming I expect Kindred hospice area/regional managers are rather nervous.  Our new owners plan to put Kindred's hospice division under Curo, despite our having nearly twice the revenue and much larger hospices by volume.  Their rationale is Curo's management is more entrepreneurial.

Curo Health Services, Inc. have agreed to pay $12.21 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for patient referrals.

Curo's  leaders settled for $12.2 million with the U.S. Department of Justice in April 2017.

First, from 2007 through 2012, kickbacks were allegedly paid to American Physician Housecalls, a physician housecall company, in exchange for patient referrals to these hospice companies. The alleged kickbacks took the form of sham loans, a free equity interest in another entity, stock dividends, and free rental space. 

Second, from 2007 through 2014, kickbacks were allegedly paid to medical providers, including doctors and nurses as well as hospitals and long-term care facilities, in exchange for patient referrals to these hospice companies. The alleged kickbacks took the form of cash, gift cards, and other valuable items.

Hospice employees don't have the means to offer sham loans, free equity, stock dividends or free rental space.  Those are all the auspices of management.

Curo spent years under the ownership of financial rapscallions.  Their executives are well trained in giving sponsors what they want, steady streams of cash and a huge final payday.

What changes await our hospice?  Is Toad Curo material?  I sense they share the same distorted values but only so many area/regional managers are needed in the combined company.

Anonymous (from KAHtivacare Hospice)

Ben Breier's Day One Pay

Strange Tony,

Kindred CEO Ben Breier received over $8.5 million on Day One for selling Kindred to financial rapscallions so it could be carved into pieces.  Breier's piece got the lion's share of revenue and lightened its debt load.

Breier became President of Kindred's Rehab Division in 2005 when the stock hit nearly $40 a share.  As President/CEO of the whole company he drove the stock price down to the $9 sellout price.  During the last three years of under performance Breier received $5.4 million, $6.5 million and $11.4 million in executive compensation.  Add his $8.5 million DAY ONE payday and the total is $31.8 million.

For the last three years Kindred paid $18.1 million to fund retirement benefits company wide.  These numbers are a direct reflection of board and executive priorities.  Financial rapscallions tend to do even less for employees, a bad omen for either new Kindred company.

Ben Breier and other Kindred executives had a banner Day One.  The shiny, happy people in Employee Experience have yet to mention the gross inequity of already rich executives bringing home millions more on the first day of our new "journey together."  They also have been silent on stagnant pay and deteriorating benefits.

Kindred at Home has been saddled with a massive debt load and is highly leveraged. Add that Humana wants to use Kindred at Home's cash flow for acquisitions and a pittance might be left for employees.  That is if executives don't need that morsel more.  The lesson in all this is:  Their will be done.

Anonymous (from KAHtiva Hospice--soon to be Curoed)

Day One: Extremely Good for Executives

Strange Tony,

July 2 served as Day One for the two private companies formed by Kindred's buyout by two financial rapscallions.  The industry refers to such owners as sponsors but other employee populations experienced them more as tormentors. 

Kindred executives did very well on Day One.  Enriched executives informed employees right off not to expect raises as a result of the buyout.  That guidance has not changed.

I'll need to re-read the shiny, happy Day One message from the amorphous Employee Experience group.  I'll hold up graph showing executive proceeds on Day One as I read their missive.  It should be a stark contrast of executive words vs. deeds.  That's par for the course in management today.

Anonymous (from KAHtiva)

Last Week as Publicly Traded Company

Strange Tony,

Our hospice will soon be sold as part of Kindred at Home, formerly Gentiva.  Our first day under our new sponsors will be July 2, 2018.

It's a reverse independence day as financial rapscallions will own 60% and Humana 40%.  The three plan to add another hospice company, Curo Healthcare, after the first deal closes.   Our hospice will be placed under Curo's executives, who've spent years training under various financial rapscallions.

Humana and our new owners will saddle us with massive amounts of debt, over $3 billion in borrowings for a company with just $3 billion in annual revenue.  Kindred had $6 billion in revenue for a similar amount of debt.

Moody's cited Gentiva/Kindred at Home's very high leverage levels starting out, likely at 8.0 times earnings before various items (interest, taxes, depreciation, and amortization).  Increasing borrowings is odd for a management team that cited 6.0 times leverage as a reason to leave a publicly traded stock market.  

Our executives plan on hitting a home run and personally profiting from flipping the company to Humana.  That's the financial rapscallion model.  They face many challenges as they place our hospice on the edge of a financial razor blade.  Our site's management just got bonuses, likely as an incentive to hang around.

I don't expect them to be nearly as generous with our nurses, social workers or chaplains, many of whom have gone years without a raise.  The dirty men near and they have one priority, their bank accounts.  Fireworks are coming and I expect regular employees will be burned.

Anonymous (from KAHtiva)

Humana's Chief Consumer Officer Cashes In

Strange Tony,

Health insurance consumers often buy coverage on the basis of price.  One might expect a Chief Consumer Officer to do their part to keep premiums down.  Not Humana, our looming 40% owner. 

Humana's Chief Consumer Officer Jody Bilney exercised stock options worth $8.5 million.  Her net proceeds from the sale amount to $4.3 million. 

In weeks Humana and two financial rapscallions will buy Kindred's home health, hospice and community care divisions.  Many hard working, dedicated Kindred employees have gone years without raises.

Financial rapscallions did the following to employees of one acquired company:  They "eliminated positions, loading responsibilities onto other workers. Schedules became unpredictable. Employees had to pay more for fewer benefits."  That is Gentiva/Kindred at Home's likely fate, especially given the obscene levels of debt being loaded on our company.

Chief Consumer Officer Bilney just got hers.  I'm not sure how $4.3 million in stock option compensation will enable her to empathize with consumers struggling to keep outrageously expensive health insurance coverage.  I expect it will be a hindrance to her performing her job on behalf of consumers, however it will help her relate to board members, fellow executives and our new financial rapscallion owners.  She might take a chunk of her new wealth and become a TPG Capital or WCAS investor.

Lord, give us joy and peace as our earthly takeover occurs.  Protect us from arbitrary management decisions and actions inspired by greed.  Keep our hearts humble and focused on loving you and your beloved children.

Anonymous

Executives Say "No Changes" Coming with Buyout

Strange Tony,

My hospice co-workers believe our upcoming buyout will bring no changes.  They believe the latest missive from executives that answered micro questions about paychecks and PTO, avoiding the financial elephant in the room, the addition of massive debt.

Both Gentiva/Kindred at Home and Curo Health have leverage of at least 6 times EBITDA according to Moody's.  Our new owners will borrow over $3 billion to complete the two deals.  Moody's rated the new debt less than investment grade.  Their rating "reflects the company's very high debt/EBITDA following the leveraged buyout transaction and acquisition of Curo."

What kind of executives cite high leverage as the need to sellout then up the level of debt at least an order of magnitude?  Kindred at Home/Gentiva leaders did just that by inviting more moneychangers to set up in the temple. They did so in a rising interest rate environment, meaning additional debt will be more expensive.

"Three dark personalities, narcissism, Machiavellianism, and psychopathy have been studied in businesses.  Although the first two share similar traits with psychopathy, such as superficial charm, lying and manipulation, the inability to accept responsibility for their actions, and the complete lack of empathy, guilt and humility, a large body of research has demonstrated that psychopathic individuals are more dishonest, treacherous and destructive than the others.'

'While all three dark personalities can be bad news for a company, corporate psychopathy is the most dangerous.  Nevertheless, because they use hard/deceitful manipulation tactics, are perceived as more dominant, and use overt means to appear more 'attractive' to those they wish to manipulate, psychopathic individuals may have the upper hand when it comes time to identify and select the most likely to succeed candidate for employee selection and promotion."-- Cynthia Mathieu, The Devil Lurks In the Suit

"Psychopathy is a personality disorder characterized by twenty well-documented traits and characteristics.  The most visible are glib/superficial charm, a grandiose sense of self worth, a strong need for stimulation (that is, psychopaths are easily bored) and impulsivity.' 

'However, there are others, which they successfully hide from view, in particular pathological lying, conning, manipulation, a lack of empathy, remorse and guilt.  Over time, one might begin to see examples of irresponsibility, lack of realistic, long-term goals, and their failure to take responsibility for their own actions."-- Paul Babiak, co-author with Robert Hare of Snakes In Suits

Massive changes are coming, even as health insurance, PTO and mileage reimbursement remain the same.  Staffing is Kindred's biggest expense and executives count on integrating Curo in a way that saves big money and preserves revenues.  That did not happen when Gentiva integrated Harden's hospice division.  Revenue disappeared from poor management decisions that reduced the quality of patient care.

Greed is in the air and my co-workers think all is well.  Lord help and protect them.

Anonymous 

Kindred to Squeeze Hospice Division into Curo

Strange Tony,

Kindred at Home's new owners, Humana and two financial rapscallions, plan to combine its hospice division with Curo Health Services, another hospice acquisition.  The bigger hospice entity will be put under the smaller.  Curo has more hospice sites but Kindred's do more than twice the work as reflected by revenue numbers.

Curo has been owned by two different financial rapscallions.  Curo management knows the language and needs of greedy owners.  They skillfully met their owner's needs for cash and return.  This bodes ill for hospice employees with a calling to do good work in this world.

Both Curo and Kindred are highly levered, i.e. each has a big mortgage to pay with lots of interest expense. 

Kindred even cited high leverage as a reason to sellout.

Oddly Kindred at Home will tackle its leverage problem by nearly doubling the amount of debt associated with the deal. 

So many aspects of Kindred's sellout make no sense under God's laws or timeless business principles.  We are but a bet by greedy leaders that they can dance on the edge of a financial razor blade and be enriched beyond all measure.  Judgement will come, maybe not on this earth or in our time, but it will come.  Lord, help us all.

Anonymous

Money Changers: The Humana-WCAS Connection

Strange Tony,

Two of our hospice's new owners, Humana and Welsh, Carson, Anderson and Stowe (WCAS), are longtime bedfellows.  Their planned buyout of Kindred is not their first deal.  

Current Humana CEO Bruce Broussard worked for U.S. Oncology when it was acquired by WCAS in August 2004.  At the time Broussard served as U.S Oncology's Chief Financial Officer.

The proxy statement listed Broussard as one of a number of continuing investors under WCAS.  CFO Broussard held $3.1 million in U.S. Oncology stock and $4.4 million in options at the time of the buyout.  SEC filings indicate Bruce partnered with WCAS by purchasing stock in the private company, .

Bruce rose to CEO in early 2008 and helped WCAS flip U.S. Oncology in November 2010 when drug giant McKessson bought U.S. Oncology for $2.16 billion.  A financial news site reported at the time:

Welsh Carson has unofficially been looking for a buyer for years. The New York PE firm invested in US Oncology in 2004. “Welsh Carson has owned it forever,” the banking source says. “It’s well past time they wanted to sell.”

Welsh Carson also has another health care company up for sale. Earlier this year, the PE firm put Concentra, which provides health care and wellness services to employers and the general public, on the block. Barclays is advising.

The Concentra auction has stalled because there are not a “lot of logical buyers for it,” the banker says. Concentra is trying to transform itself from a worker’s health provider to a provider of primary care clinics, the source says. “The auction is not going well and they’re trying to sell themselves to another sponsor,” the person says.

Humana bought Concentra from WCAS for $790 million in November 2010.  A year later Humana hired Bruce Broussard as CEO.  The rationale for hiring Broussard included his experience running physician clinics.  He could help Humana integrate and optimize Concentra.

The Concentra deal is echoed by Humana's moves around physician clinics (recently branded Conviva) and its foray into home health and hospice care with its Kindred and Curo acquisitions.

Only Humana did not stick with its strategy.  It sold Concentra back to WCAS in 2015.

On June 1, 2015, we completed the sale of our wholly owned subsidiary, Concentra Inc., or Concentra, to MJ Acquisition Corporation, a joint venture between Select Medical Holdings Corporation and Welsh, Carson, Anderson & Stowe, a private equity fund, for approximately $1,055 million in cash, excluding approximately $22 million of transaction costs. In connection with the sale, we recognized a pre-tax gain, net of transaction costs, of $270 million which is reported as gain on sale of business in the accompanying consolidated statements of income for the year ended December 31, 2015. The accompanying consolidated statements of income include revenues related to Concentra of $411 million in 2015. 

Broussard said "Concentra’s operations did not ultimately align with Humana’s strategy as well as we had originally anticipated."  Broussard was hired to make Concentra work but four years later he flipped Concentra back to WCAS, his former employer.

It’s familiar territory for Welsh Carson, which previously owned both Concentra and Select Medical.

With Humana's financial resources Bruce Broussard could have easily bought Kindred without former employer WCAS or TPG Capital.  Including TPG Capital was a nod to the Kindred Board which has TPG director Sharad Mansukani, M.D. as a member.  Bruce had this to say about buying Kindred.

Bruce D. Broussard, Humana’s President and Chief Executive Officer, said, “Humana is focused on enhancing our capabilities for care in the home to prioritize patient wellness while delivering high-quality care in a low-cost setting. This transaction with Kindred underscores the successful and ongoing execution of our strategy by joining with the most geographically diverse home healthcare provider in the country. We are confident that these new capabilities will help Humana continue to modernize home health and meaningfully improve the member and provider experience. We look forward to completing this strategic transaction with TPG and WCAS.”

Low cost?  Humana and its partners will saddle the home division of Kindred with huge interest expenses by doubling debt for the deal.  Kindred borrowed $1.1 billion to buy Gentiva. 

Humana/WCAS/TPG will borrow $2.1 billion for virtually the same assets.

Total financing shows over $4.9 billion in debt/equity to buy Kindred for $4.1 billion.  The extra $800 million will likely go toward the Curo transaction and to pay fees/special dividends to Kindred's new owners.

When WCAS bought U.S. Oncology it listed executives and board members who committed to take a stake in the privately held company.  The proxy statement read:

Holdings expects that certain executive officers and directors of US Oncology will participate in the merger by making an investment in Holdings and acquiring shares of preferred stock and common stock on the same basis that Welsh Carson and its co-investors are investing in Holdings.

No such disclosure exists for Kindred's sellout to Humana and two financial rapscallions. SEC filings mention employment agreements for David Causby and Ben Breier that may cause conflicts of interest.  There is no wording as to how our current board might participate in the deal going forward.

Hospice delivers on Christ's Sermon on the Mount calling and is the strange bedfellow in this greed filled mix.  I expect numerous employee violations from CEOs Bruce Broussard and David Causby, the mysterious Curo crew and Humana/WCAS/TPG.

Evidence indicates they prize the earthly over the sacred, the profane over the holy and the diminishing of people over nourishing God's beloved children.

Money-changers will soon buy our hospice and impose their twisted priorities.  Lord, help us all.

Anonymous (wanting to serve God's children, not Mammon)

Massive Change Looms for Kindred

Strange Tony,

Kindred Healthcare's sellout to Humana and two financial rapscallions looked traumatic enough for dedicated employees.  The deal involved splitting Kindred, a company cobbled together in early 2015.  It also drove a knife through Kindred's strategic vision of a one-stop shop for post acute healthcare services.

Executives and conflicted Board members defended the deal.with:

The structure was developed based on extensive work with investment bankers and other advisors who have experience with similarly complex transactions.  It was determined that a structure with two companies owned by a group of investment partners would yield the most optimal result for our employees executives, our patients and our stockholders..

Investment bankers, other advisors and our new owners charge fees for advising and executing the deal.  Kindred executives could release the total amount of these fees, which will dwarf the paltry $4.4 million the company paid for employee retirement benefits in 2017.  This "optimal result for employees" includes no changes to base salaries or pay rates after the transaction close.

The first challenge is trashing Kindred's strategic vision..

The next challenge arises from purchase of Curo Health Services, the second complex deal announced by Humana and its financial rapscallion partners.  Our new owners like Curo's "highly capable management team and a tech-enabled, centralized model for hospice care."

The double merged company "will leverage data and analytics to measure and advance evidence-based clinical outcomes for patients and seamlessly coordinate the transition from home care, to in-home palliative care, and thoughtfully into hospice."

Curo does not have home health.  Its systems are hospice only.  Curo employees suffered under financial rapscallion owners GTCR and Thomas Lee Partners.  Curo's systems measure financial performance in order to give their private owners the cash they desire. 

Our consortium ownership wants Kindred at Home to grow EBITDA, which is the basis for Humana to buy out its partners in future years.  Our owners may pull out chunks of company cash along the way.  It's what financial rapscallions do. 

Curo has more hospice locations, 245 vs 178 for Kindred.  There will be huge overlap in some markets and new owners normally salivate over slashing redundant expenses while keeping all the revenue.  Flashback to Gentiva's buyout of Harden Healthcare in 2014:

Harden-related synergies are expected to be approximately $28 million by 2015. This includes approximately $16 million from the elimination of overlapping corporate costs, and the remainder from the consolidation of regional area and branch organizations, as well as other cost-savings initiatives. 

Gentiva butchered the integration with Harden Healthcare's hospice sites.  Hospices aren't puzzles that can be casually disassembled, combined and reassembled.  When service suffers patients and referral sources notice. If service gets bad enough they switch their preferred hospice.  Employees can do likewise.

Curo's hospices are less than half the size of Kindred's on an average revenue basis.  For the year ended 9-30-17 Curo averaged $2 million in revenue per hospice vs. Kindred's $4.1 million. 

Merging Kindred at Home's 178 hospices into Curo is a huge challenge, especially as it's hot on the heels of the Kindred split.  Curo encompasses eight hospice brands, while Kindred at Home still has a smattering of various home health and hospice brands.

Over time Humana will want brand harmony.  What's a potential solution to Curo/Kindred's brand proliferation?

Con may be appropriate for our new ownership group.  How much Viva will they bring employees?

Anonymous (soon to be Curo'ed)