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)