Friday, November 30, 2007

Awfully Quiet in Nashville....12/4

I figure that they're actually beginning to realize what Hud saddled them with. One scenario:

He bought hospitals that no one else wanted, but looked good on paper, tried to run "the big con" ala the Sting, and with him gone, things will probably fall apart.

He could sell the idea that the hospitals weren't profitable while they were being renovated. That renovation would take years. And years to start. Meanwhile, he could acquire some actually good properties (Muskogee comes to mind, as well as Weatherford) and borrow against the idea that his corporation owned five hospitals that they were willing to put money into. Sort of how they got Paris.

He actually believed that he could package a working system that would make the 15-20% return that he forecasted from bankrupt hospitals.
Your choice.

Tuesday, November 27, 2007

Essent should keep community informed....12/7

This is the first time I've seen the Paris News take a chunk out of the hospital:

Staff reports
The Paris News

Published November 26, 2007

Officials at Essent Healthcare, the parent company of Paris Regional Medical Center, need to keep this community informed of events such as a change in leadership at the top as happened earlier this month in Nashville, Tenn.

The Paris News became aware through a third party, and almost a week later, the companys founder, Hud Connery, had been forced to step down as chief executive officer by the companys board of directors and that Mike Browder had been named acting chief executive officer.

Essent public relations specialist David Jarrard did respond to a request for information for a Nov. 19 story, but an e-mail communications problem prevented us from receiving a response in time for that days edition.

Jarrards response was brief, stating the board of directors has a commenced a search for a permanent chief executive officer. He also said in the written statement that Browder joined Essent in 2001 as chief financial officer and that he served in a similar post for TMC HealthCare. From 1993 to 1999, Browder served as vice president of finance operations for Health Management Associates, Inc., where he was responsible for financial operations at 32 hospitals.

We should have received that information as soon as an event of this magnitude took place, not a week later and only at our request.

Members of our community should be kept abreast of what is going on with Essent. Paris Regional Medical Center is one of this communitys largest employers and serves the medical needs of the majority of our residents. In the past this newspaper has been supportive of our local hospital, but being left out in the cold about major events does little to help a relationship. After all, it is the responsibility of this newspaper to keep residents informed. A change in Essent leadership certainly warranted an immediate notification.
Actually, Hud's change in status happened in October. I posted the news on the 9th of November.

Monday, November 26, 2007

What If....12/8

Dux has been more than willing to say that he wants to get rid of those elements that Bitch, Piss and Moan at the hospital, but let's look at that....

His definition of bitching, pissing and moaning might be a bit different than ours. For one thing, those that are recognizing problems, and suggesting solutions are the ones that aren't saying, "That's not my job." Maybe administration would prefer that they were, but patients don't.

Housekeeping used a wax that was softened by the cleaning solution they used to mop it. It produced a sensation of sticking to fly-paper as you walked. Solution: Change the wax, or change the cleaner. The extra money spent would be paid back in public perception almost immediately.

An effective suggestion program can make the difference between red and black ink, but the opinion is anyone that doesn't believe that the moon is made of green cheese (admin's view), is a troublemaker.

Toyota is often cited as having one of the best suggestion programs of any corporation. They also had not laid off any employees since 1950 (not sure if that still holds true, but probably so.)

When you feel that your ideas do not fall on deaf ears, you are far more likely to feel appreciated for your efforts. As admin has found, complaints that you hear are backed 10 to 1 with those you don't. This blog could be a demonstration of that.

Complaints are opportunities (ironically, the link is about Vandy.) And the first part of a problem-solving process is to identify the problem. Those that don't appreciate that fact are doomed to failure.

Say the hospital did get rid of all those who have read or commented to the blog. Can you say, Ghost Town?

Friday, November 23, 2007

Rumors and Propaganda....11/26

Not quite the latest rumor, but it is said that former CEO W. Hudson Connery Jr. was walked from Essent by security and that he is under investigation for embezzlement (a possible criminal charge, forthcoming?) I'd say that it qualifies as not "not unfriendly". What do you think? I can't say that this is first, or second, or third-hand (can you say anonymous?), but you never can tell.

Remember, this is dealing with a capitalization of over $200 million dollars. How tight is the cookie-jar lid? (Note: The real financials from Crossroads were never made available to the CT officials when they were considering Essent's purchase of Sharon Hospital. That was mentioned in the decision summary.)

An aside: In searching for records on Connery and CT, I ran across a house owned by Hud and an Ann Moore. It would appear that Ann Moore used to be in the clique of former Governor John G. Rowland, who pleaded guilty to a corruption charge (his administration approved the Sharon conversion from not-for-profit to for-profit, first in CT). I can follow Ms Moore's career through the CT governmental positions she held, as a lobbyist, and to a law firm (UPDIKE, KELLY & SPELLACY, P.C), after which she disappears (career-wise), apparently not practicing. They even hired an attorney to prepare a variance for submission on the house.
Looking at Hud's replacement, Mike Browder's duty description caused another series of questions, see if you can find and answer them:
"Michael Browder joined Essent in 2001, and is responsible for all traditional corporate financial functions including routine reporting and capital structure development. In addition, he is responsible for information systems development, corporate risk management/insurance and detailed acquisition support functions, including due diligence."
Did you see? Corporate risk management, insurance, and due diligence. Responsibility for due diligence puts him in the hot seat for failing to recognize PRMC's shortcomings, insurance for the gay couple's lawsuit, and risk management for the go ahead on the actual Essent-Doe lawsuit. You wonder why he wasn't out the door before Hud....

Thursday, November 15, 2007

Can You Say: Sub-Prime?....11/24

$55 million term loan and $20 million revolving line of credit from GMAC-RFC
$80 million from Vestar Capital Partners of New York City
$50 million Thoma Cressey, plus another $10 million

So, with over $200 million invested, what do they get?
Two hospitals that are paddling in red ink.
One that has gone up and is headed down.
Two that are reasonably profitable. (However, nothing close to what was forcasted....) They're the ones absorbing the losses of the other two.

This, my friends, is called venture capital. They would have done better investing in liquor stores and pawn shops. With the bottom falling out of sub-prime real estate loans, one wonders if this is in the same catagory. Banks and lending institutions all over the country are feeling the pain--just look at the stock market.

But, don't worry, GE only lost $17 million of the $25 million they had in Arcon. (Source: Final Decision, Sharon Hospital.)

I really want to see how Michael Browder's vision for the company is going to pull this one out of the fire....

Tuesday, November 13, 2007

Essent's Future....11/25

I suggested to a person in the industry that there are only a few possibilities for Essent: Sell or turn into a kinder, gentler Essent--more of what they pitched to Paris in the courtship.

He replied:

Hud was the central focus of this whole thing. With him gone, the venture capital guys have to either expend a lot of effort to put a new team in place and hope that things improve or they can cut their losses, get what they can through a sale and move on to something else. I don't think any of them have a particular passion to manage hospitals. If the company were bigger, I could see them wanting to salvage things with a new management team. But with just 5 hospitals, I'm guessing they'll let someone else have them.

The sale might be compromised by the pending settlement with Hud, depending on the length of time it takes. Ironically, he might be the only winner in this mess, or the spoiler that will destroy the value for everyone. I'm betting on the petulant child.

What could that do for or to Paris? The biggest problem Paris has is the joining of the two hospitals. Too much property, too many duplicated services, and a lack of competition to make it work. If Hud holds out, it could force a fire sale, or, an actual bankruptcy that might split it up (how long have I been saying this?) Or, if he settles early, we're stuck with the status quo.

I can't see any progress on the new Heart Hospital. This was originally delayed until April from the new year. What is the projection now? If Essent is going to bluff it out, it almost has to get going with the plans to show that management hasn't slipped.

I'd say they're dancing on banana peels.

Monday, November 12, 2007

History Repeating....12/10

Looks like Hud has another lawsuit to deal with. When HCA merged with HealthTrust, Hud lost his stock compensation plan (it didn't pay 'til the year end)...and so these are the elements that lawsuits are made of.

It appears that Hud has actually been out of the office for the last couple weeks--and the settlement between he and Essent is not amicable. Several million dollars worth of he said--you said, and wrangling about actual contractual obligations. Wonder if either will be able to use a Nashville law firm?

Anyway, Hud lost the first one, and its appeal. Wonder what happens to this one?? Stay tuned.

And, if anyone was wondering about Matt, I thought I would mention this:

One of the 'discussion groups' that he logs into also logs the IP address that he uses. I have a readout of his as well. And, a lot of his phraseology is the same. Tracking back his comments gave me his posted vocation (but all people lie, according to House). So, either he's Mattndallas, or a co-worker (that has picked up his manner of addressing issues) is. He just picked a poor mentor.

Friday, November 09, 2007

Connery forced out at Essent Healthcare....12/1

According to the Nashville Post, W. Hudson Connery has been forced out of Essent. The former CFO Michael Browder has been named to take his place.

The irony is, he might make out better by that happening than by captaining it into the rocks. If there is a corporate buyout of his stock, it might save his nest egg.

It doesn't mean it's over, folks. Maybe just starting....frank has learned that Essent Healthcare founder and 30-year industry veteran Hud Connery has been forced to step down as CEO by the company’s board of directors.

According to sources, the hospital operator’s CFO Mike Browder has been tapped to serve as the acting CEO and, they claim, is a candidate for to take the helm of the company permanently.

The board, led by investors from Thoma Cressey, has not announced the change, even to the Essent’s staff, as the shift, apparently, is not an amicable one. Allegedly, Connery and the board are currently at odds over a severance package and that his options in the company could total several million dollars.

Sources went on to claim that the board and a number of Essent’s investors would like to sell company.

Connery launched Essent in 1999. The company’s first hospital was purchased in April of 2000. Prior to that he was the leader of the now defunct Arcon Healthcare. That company, which was based on a “hospitals without beds'' concept filed for chapter 11 in 1998.

I'm going to add as needed to the original post (one has to be flexible....) just for continuity of the thought. The latest:

[Update, 2:26 p.m. Monday:]
Following the posting of this article on Friday, David Jarrard, a spokesman for Essent, sent an email to confirming the departure.

Jarrard disputed’s characterization of the shift saying, “the transition is not unfriendly.”

In the e-mail, Jarrard also said that “Connery has no options with Essent,” and “Essent staff were informed of the transition earlier [last] week.” While repeated attempts to contact Jarrard seeking clarification have so far gone unanswered, was informed that Connery does in fact have a sizable equity interest in the company, though the use of the word "options" was technically incorrect. Further, has been told that despite some staff’s having been informed, as of Friday afternoon the vast majority of Essent’s employees were unaware of the move.

According to Jarrard, discussions of a possible sale have been tabled for the time being noting that “every Essent hospital is profitable and growing in their markets."

Last thing first: Merrimack Hospital is sitting at $-1,498,033 for last period listed, according to American Hospital Directory (
Southwest Regional Medical Center -- $-212,615, and with a net of $860,296, Nashoba Valley Medical Center (57 beds) is over twice as profitable as this (PRMC) hospital (228 beds listed, what happened to the other 100 or so?).

Not "unfriendly"??? What, we haven't dug out the squirrel guns yet? The board has back-doored at least two offers that fell through and finally pitched Hud out. They aren't selling because there are no buyers. What kind of value does that ascribe to Essent??? You do the math:

No wonder Hud wants to take his money and run.....

Wednesday, November 07, 2007

In Need....11/9

There have been a few requests for publicity sent to me, generally for a good cause, and that brought forth an idea. Normally a blog on blogspot is filled with ads for a variety of less than desirable products.

I'd suggest that I can do some local good with announcements for fundraisers/benefits/non-profit affairs. The blog does get a fair amount of attention, and if the cause is a good one, send it in.... I'm going to play with some html tags and see if I can put some of the unused space to a better purpose.

This in no way suggests that the organizations are supporting the blog. This just means that some of the people that read the blog support the organizations.

With some of the limitations on soliciting for even good causes, maybe you can make a difference. 'tis the season....

Monday, November 05, 2007


You might ask yourself: What could one state of 140.....not to mention the 31 state senators do that would affect this case one way or the other?

They can't. They are going to have to legislate for the next incident that might show up on the horizon. I suppose Essent could refile, maybe better thought out, but that's another case, not this one.

The appeals court has a bit of a problem. And second guessing might not be my strong suit here: If they rule strictly on the basis of law, the case is finished, and Essent stews in its own juices. But there is a gap that needs to be plugged. Will the legislative body move with haste to plug it?

If they feel that it wouldn't, do they rule against the rule of law? There is a lot of interest in this case on a national level.

This is where one (or more) of the representatives steps up and proposes legislation to fill the gap. And it truly is an issue that should be bipartisan.

I should imagine that there is cross-channel communication between the branches, and this might be an issue that is approached in that fashion.

Friday, November 02, 2007


The internet has changed the face of news, advocacy, and social consciousness forever. I don't know what else has been as revolutionary in the distribution of ideas since the advent of moveable type. Television, certainly, but the production and distribution cost takes that out of the reach of most of the population. The internet is a true leveling of the playing field.

For the cost of a computer, an internet connection and an idea, anyone can be published, quoted, and assessed for worth--on an international level. My ideas, comments (rants, if you would), have caught a level of awareness and kindred spirit of which I was previously ignorant. I knew the problems existed, just not how many others did.

But, this hasn't just been my blog, there are thousands of like ilk, advocating almost every conceivable subject. (There are millions of blogs, but most are of the on-line diary type.) I think that the tendency is to try to make an old law fit a new venue. We need legal guidelines that actually fit the circumstances, not that are taken like a square peg, and whittled down to fit.

An example is a blog in Galveston, GISD Watch, which is under legal attack, as well. One would think that the board, since they are elected posts, would be considered public figures, and as such have little to contest, as long as the comments made were true. According to the blog, the board members are willing to spend the district's money to put an end to that idea.

The board wants several items on the blog removed, and is suing the blogger to do so. Kind of sounds like a freedom of speech issue, and vaguely familiar.