Wednesday, February 28, 2007

Do You Feel the Undertow????3/3

The drain is swirling, and that's where Essent seems headed. New AHD figures are out, and Paris went from a net of $1.6M to $288,275. The gross was more, but I guess efficiency isn't their forte.

"But", you might say, "didn't we have $14.4M more that we didn't spend on RRVR???" Unless, gasp, Hud was a Liar??????? No, say it isn't so........

One might think that Hud might be juggling as fast as he can. If revenue is down, how is he keeping investors happy? Well, they aren't happy, but somewhat pacified by being told that the updates, building program, and personnel changes are to blame for the shortfall. Damn, wonder if he used that excuse for Crossroads????

So much for his 10-15% ROI......

Monday, February 26, 2007


What might end up as an axle-high speedbump to Essent is the legislation under consideration by Texas lawmakers for mandating safe nurse/patient ratios. However, in their sneaky little ways, they have already been preparing for some of that: Support staff lay-offs.

The way it goes is like this: Support staff was 'invented' to free nurses from non-nursing duties. Essent is cutting support staff. Result, nurses will be forced to do more of their own support. Remember the example of how things have changed?

The following job description was given to floor nurses by a hospital in 1887:

In addition to caring for your 50 patients, each nurse will follow
these regulations:

  1. Daily sweep and mop the floors of your ward, dust the patient's furniture and window sills.
  2. Maintain an even temperature in your ward by bringing in a scuttle of coal for the day's business.
  3. Light is important to observe the patient's condition. Therefore, each day fill kerosene lamps, clean chimneys and trim wicks.
  4. Wash the windows once a week.
  5. The nurse's notes are important in aiding the physician's work. Make your pens carefully; you may whittle nibs to your individual taste.
  6. Each nurse on day duty will report every day at 7 a.m. and leave at 8 p.m. except on the Sabbath on which day you will be off from 12 noon to 2 p.m.
  7. Graduate nurses in good standing with the director of nurses will be given an evening off each week for courting purposes or two evenings a week if you go regularly to church.
  8. Each nurse should lay aside from each pay day a goodly sum of her earnings for her benefits during her declining years so that she will not become a burden. For example, if you earn $30 a month you should set aside $15.
  9. Any nurse who smokes, uses liquor in any form, gets her hair done at a beauty shop, or frequents dance halls will give the director of nurses good reason to suspect her worth, intentions and integrity.
  10. The nurse who performs her labors and serves her patients and doctors without fault for five years will be given an increase of five cents a day, providing there are no hospital debts outstanding.
As nursing shortages plague our country, nurses become a valuable commodity. So why is Essent attempting to drive off the good ones?????

We might end up with good ratios, but if we are bogged down with the other things, where do the patients fit in? If we aren't careful, the windows we'll be dealing with will be Pella, not Microsoft....

Friday, February 23, 2007

Or Best Offer......3/6

Well, rumor has it that Hud might need some money. So, being the good neighbors that we are, we decided to help him sell his house.

Fer Sale

It’s a right purdy place, actually got inside plumbing! Got’s a neat porch so’s your dog can lay about a bit, maybe shake those fleas….Got’s real electric lights, and even cable hook-ups (Hey Ma, maybe we ought to wander over and check this out!)

5520 Stanford Dr, Nashville, TN

Heard the folks were taking in boarders, but he’s moved on to Paris, so they might give you a right-smart deal. 'yall come by and see us.....

Did I happen to mention that we have the actual listing* for the house? The asking is about $1.8M...frank

*The house sold.

Friday, February 16, 2007

Essent in the Spotlight...2/28

One of the most documented acquisitions that Essent has made has been Sharon Hospital in Connecticut. It is interesting to see some of the statements, in context, about that process, and Essent's preparation for it.

Political Connections:
A supporter for the privatization of Sharon Hospital was the governor, John Rowland, who later resigned. Former Gov. Rowland was subsequently convicted (and sentenced to a year in federal prison) for what was essentially accepting bribes during the period that included the Sharon purchase. "People seeking to do business with the state resorted to various sleazy means to curry favor with top officials."

On July 1, 2006, Rowland spoke to an association of scholar athletes in Kingston, Rhode Island, about the lessons he learned. A "sense of entitlement" and the arrogance of power" were two of the biggest things that ended his political career, the Hartford Courant quoted him as saying.

He warned that the arrogance is very easy when you're put on a pedestal, and you "start to believe your own press releases. ... It [becomes] all about me. You start to block out what else is around you."
One would almost think he was talking about Hud. They probably got along well that the governor wanted to seal the deal for Sharon behind closed doors, but the Attorney General of CT got involved.

Another person of note that was encouraging the conversion to for-profit was Rep. Nancy L. Johnson, for which there were direct campaign contributions and attempt at a breakfast fund raiser at the hospital (see Breakfast...for a Price). Hud has never been terrifically shy as far as contributions.

Therrien (Sharon Hospital CEO) describes Johnson as "a true friend" of Sharon Hospital who has "been with us every step of the way, working with our staff to remove red tape and help us meet our shared vision." He did not detail the "red tape" that Johnson had helped to remove. A “paid for by” attribution at the bottom of the one-page letter said, “Paid for and Authorized by Nancy Johnson for Congress.”

But, the process of dealing with the Attorney General's office was revealing as well. Several errors were made, and documented in the findings:

55. Contrary to Mr. Connery’s July 10, 2001 testimony presented under oath that Essent had no plan, on July 17, 2001 Essent submitted a copy of an undated draft document entitled Business Plan & Due Diligence Summary, Proposed Acquisition of Sharon Corporation and Certain Affiliates in response to the Attorney General’s Request for Production, #15. Section 3 of this plan states, "Sharon Corporation and its subsidiary West Sharon Corporation, owns 13 parcels of real estate with an approximate value of $4.1 million. The total annual rent collected from the properties is approximately $430 thousand. It would be management’s intention to sell a substantial portion of these properties to offset the capital that will be committed to the property." It appears that this draft business plan was prepared in the latter part of 2000 or the early part of 2001.

70. At OHCA’s public hearing held on July 10, 2001, Mr. Connery and his associates failed to provide satisfactory answers to numerous OHCA inquiries concerning the assumptions and basis for the projections upon which the projected financial and inpatient volume statistics (with and without the proposed sale) were formulated. Mr. Connery assured OHCA that these assumptions would be submitted to OHCA during the following week with Essent’s Certificate of Need ("CON") application filing. The CON application was not officially submitted during the following week and no such assumptions and basis for the projections were ever submitted to OHCA in this proceeding by the Applicants.

72. On July 24, 2001 subsequent to OHCA’s public hearing, the Applicants submitted a "corrected spreadsheet" for Sharon Hospital showing revised estimated/actual and projected operating results and inpatient volume statistics with and without the sale of the Hospital to Essent. No assumptions or explanations of any of the numerical changes contained in the second submission of the information previously submitted to OHCA were included with the "corrected spreadsheet." In addition, there was no explanation or a breakdown of how many months included actual results and how many months were projected for the FY 2001 estimated/actual amounts.

77. Mr. Connery did not explain how "sheer stability" would directly result in the large projected increases in patient revenue and inpatient volume statistics with the sale above the levels currently experienced by the Hospital. In addition, there was no explanation given of why there were large decreases in projected inpatient volume statistics without the sale from those estimated for FY 2001, while projected outpatient volume statistics without the sale were greater in FY 2002 and FY 2003 than those levels estimated for FY 2001.

88. Essent did not submit, as requested, the Indigent and Charity Care policy of Crossroads Regional Hospital of Wentzville, Missouri for when it was known as Doctor’s Hospital prior to Essent’s purchase, nor did Essent explain the reason why the policy was not submitted.

We can say without too much fear of contradiction that a lot of the answers to those questions raised by the Findings of Fact are fairly self-evident:

  1. Their figures were just thrown at the wall to satisfy the hearings.

  2. They intended to sell off the properties included.

  3. They didn't want anything about Crossroads to come out.

  4. And, sheer stability---give me a break....

Tuesday, February 13, 2007

Medicare Fraud Raises Its Ugly Head...2/21

One of the biggest payers in the Paris mix is Medicare. Because we are so dependant on it, the thought of a Medicare audit strikes fear into the hearts of CEOs and billing personnel as well.

Well, the spectre of doom might be standing at Essent's door. The hospital is trying to pass this off as Dr. Xavier's responsibility.... Yeah, they'd love it if that were the case, but I think that we have to look deeper.

Can we say incompetence? These are mostly the same folks that forgot to bill patients for an entire year while the Minor Care Clinic was operational. These are the same folks who turned over billing for EKGs to RR when they were losing money at it, and RR made money. These are the same people that failed to pre-cert for surgeries, and to get provider numbers for locum CRNAs.

But, we also have to look at the corporate guiding lights--Hud and his crew came from Columbia/HCA to a great extent, and others, which have had Medicare billing problems before. These are also the people that feel that getting fines for non-compliance is cheaper than paying a director's salary.

Maybe Medicare will change their minds....

Friday, February 09, 2007

Patience, Hud, Patience...2/19

All the tag lines indicating "PR" are either interviews or Essent PR releases....

PR: Connery said he was prepared for public scrutiny.

frank:You asked for it, you got it.

PR: To tell the difference between diamonds in the rough and lumps of coal, Connery says he relies on his instincts and something he calls "experiential capital," meaning his experiences as chief operating officer of HealthTrust, a company that owned 110 hospitals before being bought by HCA.

frank:Now remember, this is the guy that sued HCA unsuccessfully,twice. He stayed with HCA how long after acquisition?

PR: Essent has acquired Crossroads Hospital in Wentzville, Mo., formerly known as Doctors' Hospital, and Merrimack Valley Hospital in Haverhill, Mass., which was previously called Hale Hosptial. Those hitherto financially failing institutions, Mr. Connery estimates, should turn a profit of at least 12 to 15 percent within two years.

frank: Is this relying on his fabled 'instincts'?? Crossroads failed miserably, MVH lost money in 2005, and none of the hospitals are returning a net of even 10%.

PR: After all, the company he leads, Essent Healthcare, has grown its revenues to $300 million this year from $20 million just three years ago.

frank: It really doesn't matter what your gross is, it's the bottom line, folks. The retailer that sells something at cost, but gives a quantity discount because he'll 'make it up in volume' must attended the same school as Hud.

PR: “We’ve made significant investments in Crossroads over the past five years, including the construction of three medical office buildings, renovations to the emergency room, and a new 3,000 square-foot outpatient physical therapy facility,” said Bill Heburn, executive vice president, operations, Essent Healthcare. “Despite these significant investments, Crossroads posted a positive operating income only one year out of the five we’ve owned it."
PR: It would be easy to forget that Hud Connery Jr. is a patient man.

frank: Or running scared. If he'd bailed on Crossroads when it was obviously a loser, it would have been all over---he just made it look better than it was until he could pick up Sharon Hospital and NVMC. (Enron could have taken lessons!) Dumping Crossroads after he doubled the gross made it easier to swallow for investors.

PR: Connery said he was prepared for public scrutiny.
PR: The chief executive officer of one of four suitors seeking to purchase Muskogee Regional Medical Center said he will answer any questions from the board, but not in public.

Wednesday, February 07, 2007

Third Time's the Charm....2/9

I really wish I'd placed a counter on the blog the first year I started; I really have no idea on historicals, and the only comparison is last year's counts. I started it in Feb, because January was a high month and I kind of wanted confirmation that I was on the right track.

I got it.

114,444 was the count at midnight the 31st of January. What does that say? Remember The Customer? If people get good service, they possibly will tell their friends...if they received bad service, they will tell...and tell...and tell....

We have been served badly, and a lot of people are saying so....

So many, that customers are leaving....

So many, that staff are leaving....

So many, that two other communities said no way to the Essent way....

This is kind of a "third time's the charm"...Hud has to prove that he's still viable as an acquisition corporation. If he's not, then he's either too cautious, or Essent's business model is no longer consistent with an investment strategy....

Saturday, February 03, 2007

Here at Essent...2/23

We make you read your own X-rays....

I'd say that's one way of taking the radiology groups out of the equation....
Is this how we make patients invest in their own care?
...and do they have to fee-split?

Friday, February 02, 2007

Jersey Devil?......2/15

Hammonton, NJ is the next target. The Kessler Memorial Hospital has been losing $60,000 per month in their dialysis center, which, in comparison to some of the Essent attempts, doesn't seem that much. The forclosure hearing of their center is scheduled for Feb 13th, possibly taking a facility valued at $733,000 out of play.

But, they're getting ready to close...the hospital filing for bankruptcy in September...and have to make some serious decisions. One would hope that of the three other suitors, one would be a better choice.

Someone from Cherry Hill, NJ has been keeping an eye on the blog, but who knows, they might be from Essent. In any case, the fix-ups in the hospital were for a dog-and-pony show. Personally, I'm just looking for the pony.

Some news articles:

Seeks relief....

Undisclosed suitors....

Increased useage of facilities....