Goldman Sachs Shopping Our Hospice for Humana

Strange Tony,

Insiders leaked the status of Humana's planned sale of Kindred Hospice/Community Care.  "Axios" wrote:

A Goldman Sachs-run divestiture process aimed at private equity is underway, three sources tell Axios. The company last year explored a strategic sale of the hospice arm shortly after buying out its private equity JV partners, two people add.

• The company generates approximately $300 million in EBITDA, sources say.
• The sale aims to fetch 12x EBITDA for the assets, one person adds, which suggests a deal could be valued in the upper $3 billion range if that EBITDA is applied.

Between the lines: 12x is lower than recent private market trades for scale hospice companies. 

It appears our hospice will be once again saddled with financial rapscallion owners.  CEO Bruce Broussard's promise of a public listing turned out to be hollow.  

Humana will spin off Kindred Hospice/Community Care for 12x EBITDA, essentially the same price it paid TPG Capital and WCAS (11.5X EBITDA).

Debt rating agency Moody's rates Kindred at Home's debt under "Gentiva New":

Any divestiture of the hospice/ community care assets would trigger the requirement within the credit agreement to repay the debt and as a consequence could result in a different rating outcome. 

 The report indicates:

....at June 30, 2021, the company had a large cash position at around $200 million dollars, and consistently positive free cash flow. 

Moody's also notes that KAH has been paying down debt of roughly $125 million per quarter, which we expect would continue.

Humana, as operating partner, mobilized KAH's cash toward paying down debt of $500 million per year.  Hospice staff generate revenue from their hard work, yet received little in the form of raises or improved benefits.  

The financialization of our hospice continues with staff having no opportunity to have a stake in the company.  Going from financial rapscallion ownership to financial rapscallion ownership is not the least bit inspiring.  

Executives continue looking out for themselves.  Goldman Sachs is lining up their next king's ransom via a $3.6 to $3.9 billion sale.  

Greed is as greed does.  It's extremely grating and fatiguing for dedicated hospice professionals.   Lord, hear our struggles and comfort us.

Anonymous

Humana Ready to Reorganize Hospice Business

Strange Tony,

Humana's Q4 earnings call suggested our hospice may know about our new owners by April.  CEO Bruce Broussard said:

...we are committed to advancing our plans to divest a majority interest in our hospice business as we are confident we can deliver the desired experiences and outcomes for patients transitioning for restorative care to hospice through partnership models.

We have continued to explore various alternatives for the long-term ownership structure of the business and have initiated steps to reorganize the hospice business for stand-alone operations while also making investments to improve clinician recruiting and retention to position the business for further growth. While we're not able to share details today on a specific transaction structure or timing, we expect that we will be in a position to provide a meaningful update by our first quarter call. 

That means Kindred Hospice employees will not transition to Humana's richer benefits package.  Broussard did not mention causes for clinician turnover, like not paying staff fairly for hours worked and miles driven. He omitted sorry Homecare Homebase which added hours of extra work (often done at home and off the clock), sent clinicians down senseless rabbit trails and made it exceedingly difficult to find pertinent information (as it could be in numerous places or not charted at all).   

Humana purchased our hospice in June 2018 and promised no changes.  It then cut the number of holidays by 25% and holiday pay by 33%.   They jettisoned  administrative and clinical hospice staff and instituted time eating work processes for those remaining.  Our experienced hospice nurses left long ago.

Broussard admitted Humana had difficulty retaining hospice nurses they'd just hired.

We also reduced the number of nurses who attrit (quit) in the first 90 days of employment in the second half of 2021 for the first time since the pandemic began.

Before Humana destroyed our once great hospice we had nurses leave during the first 90 days of employment, mostly due to management painting a rosy picture and then not living up to what they'd sold.  

Turnover went into the stratosphere in 2019.  2020 brought the pandemic which isolated staff from one another, making them more susceptible to torture from Mean Girl management.  

What happens when management harms the quality of service while taking advantage of employees?  Census goes down and down and down.  In the earnings call Bruce noted hospice's declining volume for the last quarter and full year:

Fourth quarter 2021 home health admissions were up slightly while hospice experienced a low single-digit decline as compared to the fourth quarter of 2020. From a full year perspective, we have seen home health admissions up low single digits with hospice admissions down low single digits year-over-year. It is important to note that hospice volumes have been impacted by the higher mortality rates driven by COVID as well as lower post-acute facility volumes.

Hospice volumes have also been impacted by nurse turnover and lack of availability.  Our hospice continued to take patients and overload the few clinical staff left but that turns into poor service and bad word of mouth.  

Referral sources got the message that Humana did not care about serving customers.  Hospice staff felt how little management cared for us.  We saw executives focusing on enriching themselves while pretending technology would ameliorate the downstream impact of their greed.

While hospice volumes went down, margins remained robust.  That's the money that does not go to employees.  Humana's CFO said:

Hospice had slightly higher margins than the home health business, and those trends continue.

Four years ago a few of my hospice peers thought Humana and its financial rapscallion partners might make our hospice better.  Some looked at Humana's retirement match and wondered how long before they would have such a benefit. 

EMPLOYER CONTRIBUTION:  125% on up to 6% of employee 401(k) contributions

Humana dashed any misplaced hope.  I expect similar treatment from our new owners.  The question is how much money did Bruce Broussard make on our backs?  We may never know.

Humana has begun a divestiture process in collaboration with Goldman Sachs, Axios reported Monday, noting that the information came from three different sources. The process is supposedly targeting private equity interests.

Lord, deliver us from evil....that I pray.

Anonymous

Humana Reports Big Gain on KAH

Strange Tony,

Humana reported the following profit on its 40% ownership of Kindred at Home (KAH):

$1.13 billion gain recorded in the third quarter of 2021 associated with the company's previous minority ownership in Kindred at Home (non-taxable)

That's a doubling or 100% gain on its initial equity investment of $1.1 billion in 2018.  Contrast that with loyal employees who lost over 50% of the stock's value between Kindred's buyout of Gentiva and its sellout to Humana and two financial rapscallions.  

The big money does not go to the little person.

Transaction and integration costs associated with the Kindred at Home acquisition of approximately $128 million.

Fees paid to financial rapscallions are orders of magnitude higher than the paltry amounts KAH provided in its 401k match.  Has Humana harmonized benefits yet for KAH employees?  Likely not, as it plans to jettison the hospice and community care divisions.

Kindred Healthcare CEO and KAH President David Causby chose to enrich themselves and fellow executives.  They've received more than one king's ransom over the last three years.  Loyal employees got a kick in the teeth and many got kicked out the door.

Causby and Humana ruptured our hospice to the point it cannot be put back together.  Their giant gain is our significant loss.

Anonymous

Intentional Cruelty and Greed is Breier's Legacy

Strange Tony,

Ben Breier, the man who trashed his company's vision for integrated post-acute healthcare while making two king's ransoms, said of his new book Intentional Disruption:

"This is not a technical business book; it's an emotional leadership survival guide," Breier explained. "It encourages readers to be connected to a mission rather than just a salary. This book will hopefully help incumbent leaders, but was written with an eye towards inspiring emerging leaders of tomorrow."

Ben Breier is a jerk who sold our once great hospice down a river. While he counted his winnings Humana and financial rapscallions destroyed our hospice, harming employees and patient care.

Intentional Disruption is what Breier did to enrich himself multiple times.  He did not give employees an equity stake in the company.  Breier held that for fellow executives and his financial rapscallion partners.  

Breier disrupted employee trust when he abandoned us in summer 2018 for his first king's ransom.  Executives told us there would be no changes.  Yet, our new owners decimated staffing, cut the number of holidays and holiday pay (50%), drove away experienced hospice workers, and acted like everything was great when customer service scores plummeted and stayed poor.

Our leaders did not communicate with us, likely for their emotional survival.  They acted like there was no damage from the ongoing series of betrayals and reductions.  A management basic is paying people fairly for hours worked and miles driven.  Leaders failed abysmally in that regard.

Disruption should not mean stealing wages and mileage reimbursement from the people you supposedly lead.  Ben Breier will atone for his actions when he faces his maker.  I expect no insights into the distorted reality he created while enriching himself at the expense of the worker.   Rupture is a word I associate with Kindred Healthcare and Ben Breier.  That he did it all intentionally shows what a sorry person he is.  

Anonymous

Deals Drive Down Kindred Employment

Strange Tony,

Kindred Healthcare had 2,100 employees in Louisville, Kentucky in December 2017 when it announced its deal with Humana and two financial rapscallions to carve up the company.  Buyers said it would be unlikely that the local workforce would be impacted. 

As of December 2020 Kindred Healthcare had 1,185 employees in the Louisville area, a 44% reduction.  That's the portion of the company Humana did not buy.  

Oddly, there is no employment data for Kindred at Home in Louisville, Atlanta (Gentiva) or Mooresville (Curo Healthcare).  Humana reported an increase of 40,000 employees after buying out its KAH rapscallion partners.  That number should be at the top of any employment list.  It is missing.  

Our local Kindred Hospice experienced a 40% headcount reduction after Humana et al bought us.  That made Kindred at Home CEO David Causby's holdings far more valuable.   Yes, he profited handsomely from screwing over employees.

We are for sale again.  I don't think we can survive another greedy owner that partners with self-dealing executives.  Employees lose again.

Anonymous

Humana Drives Away Medicare Advantage, TPG Going Public

Strange Tony,

Our hospice waits for Humana to decide the method it plans to use to ditch us for a huge chunk of change (yet again).  Humana's stock is taking a beating today, down $80 per share due to Medicare Advantage enrollees dumping Humana coverage during Medicare's recent open enrollment period.  

For 2021, most Humana MA members will also have access to Go365, the insurer's health and wellness program that rewards users for improving their healthy behaviors.

Extrinsic rewards often demotivate people, the exact opposite of their intention.  Did that contribute to people switching away from Humana MA plans?

Eligible MA members will also have access to Humana at Home, a program in which they will be provided with a personal care manager who will reach out regularly with education and assistance in accessing resources to assist with medication, transportation and other needs.

How many of those who left Humana had the same personal care manager for the whole year?  Turnover in that position could motivate those with coverage to leave.  

Hopefully CEO Bruce Broussard will explain why so many insureds walked away from Humana's offerings in his upcoming earnings call.  A little color on that would be helpful.

TPG Capital, our former 30% owner, plans to go public.  Financial rapscallion founders will make billions from their equity stakes in the company, but that isn't near enough.

TPG's top dealmakers will force the buyout firm to pay them the cash value of tax savings it expects to receive, currently estimated to be worth $1.44 billion, in the years following its initial public offering (IPO)

These obscenely wealthy individuals pay taxes at a lesser rate thanks to the U.S. Congress.

Congress never passed into law proposed legislation that would have taxed payments made through tax receivable agreements as ordinary income. 

I know how TPG and Humana harmed our hospice after buying Kindred at Home in July 2018.   Our owners were quite skilled in driving away talented, dedicated hospice employees.  It is not surprising they did so with their customers as well.

Anonymous

Vultures to Own Our Hospice Once Again?

 Strange Tony,

Humana is yet to sell or spin off our hospice after acquiring 60% of Kindred at Home from financial rapscallions TPG Capital and Welsh, Carson, Anderson and Stowe in August.

From 2012 to 2019, the number of hospices owned by private equity companies tripled. The pace of acquisitions seems to have only gotten faster during the COVID-19 pandemic.

Our time under private equity ownership was particularly painful.  Financial vultures decimated staffing and our service levels.   

Bad deaths, once very rare, became more common due to lack of staff and greatly increased operational complexity.  The company put in place bureaucratic steps for medications and supplies formerly readily available. 

Our hospice will likely end up under greedy ownership, yet again.  Lord help us all,

Anonymous