Enhabit Returning to the Dark Side

StrangeTony,

Financial rapscallion Kinderhook Industries LLC is buying Enhabit, a home health and hospice provider in a $1.1 billion deal.  Hospice News reported:

At about $13.80 per share, the all-cash transaction represents about 24.4% of Enhabit’s closing stock price. The valuation implies that Enhabit has a roughly 10.3x EBITDA multiple for the Fiscal Year 2025, according to a report from Jefferies LLC.

That's far cheaper than hospice multiples in 2019-2020.

Multiples in the hospice and home care space reached a record 26x during 2020, according to a research report by PwC’s Health Research Institute.

Enhabit was spun off from Encompass in early 2022.  Encompass has financial rapscallion roots as it was once owned by Cressey & Company.  

Flashback to 2017 when our hospice was part of Kindred Healthcare:

Financial sharks circle Kindred Healthcare and some are inside the company. Take former CEO Paul Diaz, who received a $6 million cash bonus in May 2015 for closing the deal on Gentiva. Diaz went on to become an operating partner with Cressey and Company. Oddly, his bio on Cressey's website makes no mention of his current Kindred board service. Diaz is Vice Chairman of Kindred's Board of Directors.

We were sold down the river in summer 2018 to TPG Capital, Welsh, Carson, Anderson & Stowe (combined 60% owners) and Humana (40%).  Our new owners cut everything, including quality of care.

Humana kept the home health division but flipped Gentiva's hospice and personal care divisions to another rapscallion, Clayton, Dubilier & Rice

CDR just put affiliate Multicolor into bankruptcy and somehow will retain majority ownership.  That only happens if the rapscallion is on both sides of the deal, equity and debt.

Arm's length agreements and ethics are so yesterday.  I imagine Enhabit's hospices will funnel huge sums to Kinderhook, its executives and limited partners.  That is the way of the world today.  

Hospice deals with the eternal but must endure the greedy on our earthly plane.  I lived it and it was brutal.  Never again, Lord willing.

An attorney wrote a law review article titled "The Dark Side of Private Equity."  The anonymous author: 

"argues that the core tools of PE value creation—high leverage, cash extraction, and short-term exit incentives—externalize predictable risks to third parties including workers, healthcare patients, consumers, unsecured creditors, communities and the environment."

Sounds about right.

Anonymous   (yes, there are a lot of us)

Moody's Gentiva/Charlotte Buyer Rating Update

Strange Tony,

2026 is upon us.  Moody's debt rating for Gentiva is under the corporate entity, Charlotte Buyer.  After the sale of Gentiva's personal care division the company is primarily a hospice company.  

Financial rapscallion Clayton, Dubilier & Rice bumped up their ownership percentage from 60 to 65%.  Humana pulled back from 40 to 35%.

I joined you in retirement and what a relief it has been.  I haven't been back to the office since then so my view of the company is reduced to major news and what little financial information I am able to track down.

It was a privilege working with a great hospice team for so many years, one that struggled to stay good as executives eviscerated everything around us, all for their eventual, obscenely-excessive payday.  

Financial rapscallions are the anti-thesis of what hospice is all about.  They prize greed vs. love/support, taking vs. giving, earthly vs. eternal and power vs. service.  This too shall pass. 

Anonymous

The Financial Rapscallion Way

Strange Tony,

A former Director of Human Resources, Governance and Policy said the following on a Glassdoor review:

• Abrupt mass layoffs without notice or transparency 
• Severance packages offered and then rescinded without explanation 
• WARN Act compliance appears to be ignored, affecting hundreds of employees 
• Income not properly reported to unemployment systems, delaying benefits.
• Poor internal communication and lack of support for terminated employees 
• Senior leadership avoids accountability when legal or ethical concerns are raised 
• High turnover in HR and leadership — toxic cycle of “fixers” brought in, then removed 

Advice to Management 

If you expect loyalty, transparency, and compassion from your employees, they deserve the same in return. Executing mass layoffs at a company that provides hospice care — without even the basic decency of notice or severance — is not just unethical, it's possibly illegal under the WARN Act. Stop hiding behind silence. The values you market to patients and families should extend to your own workforce. Review your compliance processes, honor your legal obligations, and do right by the people who helped carry your mission — even when it's no longer convenient.

Financial rapscallions continue to eviscerate hospice services.  It began under TPG/WCAS/Humana and continues under CDR/Humana.  Executives actually win by canning large numbers of employees given their significant equity stakes and absurd incentive compensation.  

Financial rapscallions are happy to pay 10.4% interest on their 2nd tier loans but loathe to pay staff fairly, much less commit to keeping them employed.  The first wave of crappy Curo Hospice technology caused serious harm to service quality with its assumption that software could replace people.  

I imagine AI is defecating all over the floors of various Gentiva Hospices and executives are nowhere to be seen for the cleanup.  It's their nature to make a mess and make workers wallow in it while they lounge in their offices counting cash.

Anonymous

Hospice Crapification Hits Federal Government

Strange Tony,

Financial rapscallion majority ownership turned our nationally recognized hospice into a shell of its former self.  

• Office headcount reductions of 50%
• Over-reliance on "new" (but unreliable and incapable) technology that wasted staff time
• Cutting the number of holidays and holiday pay 
• Not giving raises for years
• Reducing office square footage (to meet C-suite spreadsheet expectations)
• Put in phone system that enabled calls to be overheard without worker knowledge
• Hospice office/clinical system robbed staff of fair reimbursement for miles driven
• Made nurses salaried, then overworked them horribly
• Reduced work to 30 hours for some positions - 25% pay cut

Training on these new systems was poor to nonexistent.  Dedicated hospice staff did not have the time to properly care for patients and do the checking needed to make sure they were paid fairly for hours worked and miles driven.  The company effectively stole hours and mileage from workers.

These very things are occurring in the federal government under Elon Musk.  Musk's henchpeople are rapidly seeking headcount reductions, square foot eliminations and implementing crappy technology.  It's not clear if Musk's henchpeople have multiple full time, well paying gigs (like many insiders in our Age of Sponsorship).

Financial rapscallions have no problem ordering physicians around, negatively impacting the practice of medicine with hard spreadsheet targets.  This has been seen across multiple medical specialties.  

The greed imposed on our hospice resulted in significant and immediate disintegration.  Our census never returned to pre-rapscallion levels.  I expect that very thing is happening across the federal government as Musk's team crapifies operations.  Dang. it sure brings back bad memories.

Anonymous

Gentiva vs. Bristol Hospice: Glove Up

Strange Tony,

Clayton, Dubilier and Rice's Gentiva Hospice sued Webster Equity Partner's Bristol Hospice and a former Gentiva nurse administrator for damages resulting from the nurse violating a non-compete agreement and revealing Gentiva trade secrets.  

Bristol Hospice entered the Brewer, Maine market, hired Gentiva's nurse administrator who then tried to hire other Gentiva employees.  

Gentiva requested a jury trial.  I would love for Gentiva CEO David Causby to testify under oath as to the company's practices when they enter a new market.  I'd love to hear which Gentiva trade secrets the nurse administrator spilled to Bristol.  It it's to rob fair pay for hours worked by making nurses salaried or having a crappy software product that shorts staff for miles travelled, then I hope someone from the Department of Labor is in the courtroom for the whole trial.

I'm sure Bristol is just as abusive to staff as Gentiva.  Financial rapscallions require their numbers be met and that excrement flows downhill and downhill and further downhill. 

I expect a settlement as neither rapscallion wants to reveal their trade secrets in a public court of law.

Anonymous

Egregious Breaches at Vital Cheating

Strange Tony,

A judge ruled against two financial rapscallions and April Anthony, the former founder of Encompass Health, for "egregious breaches" of fiduciary duty.   As a CPA Mrs. Anthony clearly knew about fiduciary duties.  As a Christian she is supposed to have a basic moral code, one above "earthly desires."

April's partners in crime?  Vistria Group and Nautic Partners.  I imagine these firms are similar to the financial rapscallions that denigrated our once great hospice.

Welsh, Carson, Anderson & Stowe

TPG Group

Clayton, Dubilier & Rice

Anthony and her greedy co-conspirators did the following in their "building" of VitalCaring.  

At first she tried to buy the company (Encompass), in secret partnership with Nautic and Vistria, and then later chose to form a new, competitive company (VitalCaring) with her new PE partners.

Anthony served on the board of First Financial Bankshares, a regional bank based in Abilene, Texas.  Her board bio states:

... as a certified public accountant, Ms. Anthony brings strong accounting, management, strategic planning, technology and financial skills important to the oversight of our financial reporting, enterprise and operational risk management.

Her board bio indicates that she founded Homecare Homebase, the crappy hospice software WCAS and TPG pushed on us after their summer 2018 takeover.  Homecare Homebase made it nearly impossible for our hospice staff to receive fair pay for hours worked and miles driven.  April made $422 million from selling her equity in Homecare Homebase over a number of years.

It's never enough for the greedy.  All that knowledge, money and deep faith did not prevent April Anthony from acting unethically in the pursuit of even more money than the $740 million she had accumulated as of 2023.

I'm afraid this is the state of hospice, healthcare and more.  It is sad as it is a form of death, the extinction of ethical leaders.

Anonymous

Gentiva Settles False Claim Suits for $20 million

Strange Tony,

Having lots of names came in handy for Gentiva/Kindred/Curo in its settlement with the Justice Department for fraudulent billing.  The nearly $20 million settlement involved mostly Curo branded hospices.  The bad behavior began in early 2010 and went on until year end 2023 over various individual hospices.  The settlement agreement has the specific breakdowns.

That Curo hospices behaved unethically is no surprise and calls into question the judgement of Humana and its financial rapscallion partners (TPG and WCAS) as they chose to impose the Curo model on Kindred's hospices (which were generally much larger and greater in number than Curo's brands).

That decision destroyed our once nationally ranked hospice.  We went from a Kindred sized hospice of over 100 hospice patient census to half that (Curo sized).  It turns out referral sources expect someone to answer the phone and show up when needed.  Curo's technology and staffing model did not enable this level of service delivery.

Left out of this settlement were any of the company's owners whose financial practices encouraged, almost demanded, unethical behavior.  If the company can steal pay and mileage from employees, surely an enterprising branch manager can steal from Medicare/Medicaid/Tricare.  

Humana, TPG, CDR and WCAS  take a bow.  Bad behavior from June 2018 to December 2023 rests on your shoulders.  

I wonder how far Humana CEO Bruce Broussard's Washington, D.C. office is from the Justice Department and how many trips he made to Capital Hill to put this issue to bed.  Surely he and the boys from CDR/TPG/WCAS put a bug in someone's ear.

The latest Gentiva/Kindred settlement makes me realize how our legendary Medical Director kept the ethical wolves at bay for so long.  Our census stayed high due to his care and concern for patients and their families.  Money flow kept regional and national corporate parasites in check.  

He loved to tell our corporate visitors about the special closet in the national office where new recruits were taken in and had half their brains sucked out.  Their facial expressions were priceless.  Thank heaven he retired before Humana/TPG?WCAS trashed his baby.  Our legend was a hospice doc to the very end.  God rest his soul and God help those suffering under greedy fools.

 Anonymous