Essent Lenders....11/28

Now isn't GE Capital one of Essent's lenders?

From Barrons
November 19, 2008, 10:46 am
GE: Meaning
Well, If Not Always Doing Well
Posted by stockstowatchtoday_topeditor
GE SEES $2 BILLION CAPITAL FAT; RISK TO WIND?

General Electric (GE) has become the corporate embodiment of the description of a sometimes-wayward so-and-so in a Lyle Lovett song: not always good, but always possessed of good intentions. Two earnings warnings in a year. Insistence that it’s bedrock financial condition remained intact, even though it managed earnings by paying more than $30 a share in buybacks before raising new capital at $22 a share. Pointing to its triple-A credit rating as evidence of its ample liquidity before raising more capital from Warren Buffett, to whom it’s paying a 10% coupon.

The latest reposte from the company that Brings Good Things: Tuesday’s announcement of changes of its GE Capital unit. The move was aimed at saving $2billion. Again, well-intentioned. But, as Deutsche Bank asked in a research note Wednesday: where’s the savings coming from, exactly? Can the company demonstrate where it’s taking costs out of the structure to realize the savings? How does any manager cut risks in a credit crisis that’s fraught with risks?

The problems with financing aren’t limited to GE’s capital operation. There’s increasing chatter in the market, fanned by a Bloomberg report Wednesday, that some of the wind turbine installations that GE is selling into are being postponed because their operators can’t finance the projects. GE said it hasn’t seen any outright cancellations. But some of the anecdotes certainly raise questions. After all, T. Boone Pickens has made himself the populist leader of the wind-farm movement. But Pickens is an oil guy - at heart and in his investments. It’s not to say that he’s anything but sincere in his ambitions to spread the gospel of renewable power. But anybody seen what’s happened to the price of crude lately, and think that might have had some impact on someone like Boone Pickens’ ability to finance new projects?

There’s no crisis in the wind-farm projects, as yet. GE said that it has a ‘’strong” backlog of wind turbine equipment. But Theolia, the French maker of power plant equipment, earlier this week backed off its financial and operational forecasts. That not only validates concerns about the integrity of wind turbine budgets over the short term. On top of it, Theolia’s 80% decline in market valuation certainly suggested GE’s 17% stake in the French company is worth less than it paid for it, another investment that hasn’t worked out.

Meanwhile, GE has made the ”green” movement a big part of its corporate identity, including such messages in its marketing and corporate imaging efforts, as it moves away from its image as a merchant of appliances, an operation it’s selling. A failure in the wind turbine business - even though all power generation represents less than 20% of the company’s sales - would hurt. GE shares declined 3% Wednesday.

I never thought that GE would be just over 12.

Healthcare Alternatives....11/28

I went back in the draft status posts--ones in which I hadn't completed the thought process--and ran across this list of waiting periods for procedures under the Canadian healthcare system:

For Canada, waiting times:
General surgery: 14.3 weeks
Orthopedic
surgery: 40.3 weeks
Cardiovascular surgery: 8 weeks
Urology: 11.5 weeks
Internal medicine: 11.5 weeks
Radiation oncology: 5 weeks
Medical
oncology: 4.9 weeks.

Now in some cases, those are to get the initial evaluation, not treatment. Realize that we still have Canadians coming over the border to American facilities for diagnosis and treatment because it is so much faster. It might be cheaper in Canada, but if you die while waiting for an appointment, cost becomes less of a factor. (My caveat to the Obama healthcare initiatives.)

Landing On His Feet....11/13

Like a big cat, Hud has apparently landed on his feet...so to speak. I'm not talking about a large jungle cat, more like Garfield. Just less cuddly.

Those who can, do. Those who can't, consult. Hud is now apparently a CEO in Performance Management Institute (seminars), and consults under Stroudwater Associates, as well. If you follow the link, the bio seems to leave out significant parts of his career, but that's just Hud.

ARCON has disappeared, and various other head, er..milestones have been milled down, but it's Hud, just the same.

How Does It Stay Afloat?....1/1

I have been remiss, and not checking the site American Hospital Directory (AHD.com). Some new figures have come in which make the Essent Healthcare Corporation's future a bit more uncertain. Only one hospital is listing a profit: Sharon Hospital. The rest are swimming in red ink. The rundowns are as such:

Sharon Hospital********78beds $1,889,467
PRMC*****************255beds -$508,231
NVMC******************57beds -$638,864
SWMC******************73beds -$2,411,841
MVH*******************138beds -$4,323,137

Total********************601beds -$6,001,606 net annual loss

The names of the hospitals are also links to the full listing for each under the free information section of AHD.com. Note: The information included is provided by Essent itself.

These figures do not reflect the current crisis. The disclaimers on the pages indicated that these are last year's figures, and in part 2006! So, it doesn't show the construction costs, the locums, the RHCs, and so on....

You would think that the various newspapers in these communities would have picked up on the downward trend, but, then again, they missed the firing of Hud (by almost a month!), and locally the Knizely dismissal. When I can scoop them, just using my limited resources, what are their reporters doing?

Sub-lime or Sub-prime....2/26

Does the current credit crunch bode well for Essent? For PRMC alone, they borrow to pay their payroll, and with a half-million dollar loss/yr, how does this keep them out of sub-prime status?

With the last financing, Essent included a rolling line of credit, possibly against such an event. Otherwise, in the current financial situation, the money might not be available. Hopefully the institutions that offered that line of credit are still able to fulfill their commitment.

If not, meeting payroll for all the hospitals might be a financial nightmare. Essent borrows month-to-month to make payroll--a fairly common practice. But with credit tightening.....

One wonders how other hospital groups that are also in the same category are able to maintain?

Is This What We Want in Healthcare?....10/7

Looking back at the sub-prime mortgage mess, you have to consider what the original 'intent' was, and what has happened in practice. There are considerable parallels that can be drawn between that and what the future of healthcare holds for us. Freddie and Fannie were pseudo governmental entities--sort of like the Post Office.

"1970: The U.S. Congress creates the Federal Home Loan Mortgage Corp., nicknamed Freddie Mac."

What may play out could possibly be foretelling the fate of healthcare in a foreseeable future.

Well, what do I mean by that? De-regulation is being slapped about as the cause of the problems, but was it de-regulated? There were several mandates that were placed on lenders to make sub-prime loans. They made them, but in order to minimize their exposure (risk), they would re-sell those mortgages. Those were repackaged and sold as securities by Freddie Mac. When the mortgages were defaulted, the securities were devalued...do we see where this is heading?

"Freddie Mac is a shareholder-owned corporation whose people are dedicated to improving the quality of life by making the American dream of decent, accessible housing a reality. We accomplish this mission by linking Main Street to Wall Street--purchasing, securitizing and investing in home mortgages, and ultimately providing homeowners and renters with lower housing costs and better access to home financing. Since our inception, Freddie Mac has achieved more than 30 consecutive years of profitability and financed one out of every six homes in America."

30 years of profitability---didn't quite make 40, did we? And, for the last several years, the CEO of Freddie Mac was stating that the reported figures were not accurate! Why isn't the former management team of the F.M.s coming under the same scrutiny as Enron? There is far more money and far more impact in the trickle-down effects.

Do we want this kind of management turned loose on healthcare? How about the politics? Speaking of politics, Senator Obama has the honor(?) of being the recipient of the second largest amount given to campaigns of elected officials by Freddie Mac/Fannie Mae ($126,349). McCain's campaign also received contributions, but far less substantial ($21,550). I'd say both would be better off returning the money. (Note: The Republican 'leader' that is being touted by the Democrats as having reached an agreement on the bailout was on the list--the most money taken in by a Republican campaign from the F.M.s.)

Current members of Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that.

Can you say, "Deal Maker?"

We see the purpose as providing 'accessible' housing. Isn't that similar to the mantra of 'accessible' healthcare.

Can you see the writing on the wall?

I Understand....9/29

Yep, my attention has been diverted as well--the election looms in two months! Bet the decision on our case comes out within the week (after the election results.) Any takers?

But, let's go back to the election. It became a horse race in the middle of the Republican Convention...and with such a weak start, I was beginning to feel that it was all over.

Senator McCain took some advice, and brought in a ringer. She has to be. This was a conservative's wet dream: A working MOM, a member of the NRA, Pro-Life, happily married, active, a governor, and bucks the 'good ole boy' authority in the Republican party. And she can stand up before a record number of people and deliver a punchline. And a punch.

Salvation.

Maybe there are some fleas, but the Democrats are panicking. There are more PIs going through Sarah Palins life (and trash) than the number of times that Obama can say 'uh' in a speech. Their version of recycling is to hand the garbage to the next investigator in line.

And the more that the Democrats poke at non-issues, the more popular and the more of the sympathy vote the Republicans get. Kind of like the blog. When Essent was pursuing hot and heavy, they stirred up national attention. Now, the blog is barely hitting a thousand-fifteen hundred hits a week. (The record is about that in a day!)

But why bring the election up? Just trying to play on the Palin effect? Maybe, but Duc-boy's 'practice Scotish spending' reminds me of the Obama plea to fill your tires to solve the energy crisis. Far too little, Far too late

Universal Healthcare....9/01

In case you haven't noticed, when the government owns a program, they really own it.

Healthcare. Something that we've taken for granted that we have some choice in. But, would that be true in a single payor environment? I ran across a blog post that casts some doubt towards that assumption.

It was mentioned in the Coyote Blog, which pulled it from Qando, which sourced the Jewish World Review. I went to the source. What it boils down to is the wishes of the patient, and his family were ignored.

"Golubchuk is an Orthodox Jew, as are his children. The latter have adamantly opposed his removal from the ventilator and feeding tube, on the grounds that Jewish law expressly forbids any action designed to shorten life, and that if their father could express his wishes, he would oppose the doctors acting to deliberately terminate his life."

One would think that a patient's religious beliefs would hold some weight, but not so:

In response, the director of the ICU informed Golubchuk's children that neither their father's wishes nor their own are relevant, and he would do whatever he decided was appropriate. Bill Olson, counsel for the ICU director, told the Canadian Broadcasting Company that physicians have the sole right to make decisions about treatment — even if it goes against a patient's religious beliefs — and that "there is no right to a continuation of treatment."

Notice, this was in Canada...not Russia, not a dictatatorship. But, in some ways it is. The moral of the story is, in bumper sticker logic: "Those who would trade freedom for security deserve neither" -- Benjamin Franklin

But, you say, I'm not Jewish. True, but does your faith have tenants that impact your healthcare? Say, against transfusions? Autopsies? Surgery, or other treatments? I can think of many that do. Separation of Church and State can have an interesting consequence in that situation.

When it happens to my neighbor, it's a shame. When it happens to me, it's a tragedy.

And Then There Was One....8/25

West Paris RHC is the latest: Brandi Chadwick gave notice and will be working with Dr Cannon.

So, based on Essent's keen understanding, process improvement, financial management, and support of its employees, there will be only one semi-functional Essent run rural health clinic by mid-September.

So, what will be the impact? Maybe not that much. More likelihood of patients going to hospitals other than PRMC. Puckett can refer to Bonham, Higgins to ETMC. The West Paris crowd will probably jam the ER with low acuity. Unless Cooper gets quickly established, Commerce will pick up their patients.

What will it take to keep the RHCs operational? Recruiting new NPs/PAs (with associated fees.) Keeping the rest of the staff intact (less change for patients to absorb.) And be ready for the associated loss of income from the former employees, now competitors, taking their patients with them.

But, it's unlikely that Nashville gets it. They haven't so far....

Top 100....10/17

PRMC made the top 100 hospitals.... Wouldn't you just hate being in one below that? Realize, first off, that it was based on performance improvement, not position. The positional results were announced earlier in the year.

Now follow me, if you will, in a logical fashion: If you are at the bottom, and you move up 20 places in a field of 3000, you might be improving, but are you in the top? Not even close.

Realize too, that they only review data that is sent in from the hospital. And, theoretically, you could be most improved, but still file for bankruptcy....

"Lies, damn lies, and statistics" according to Mark Twain

Note: The graphic is from the math department at Vandy--Vanderbilt also made the list!

Rural Health....9/18

Been by Honey Grove lately? The Puckett Family Clinic is the new game in town, and that has caused quite a stir with the hospital's other rural health clinics. It looks to be doing well, and is up to speed. Drop in some time.



Patricia Higgins was apparently planning something similar, but was informed on by her medical director, at the time, Dr. Green.

The next Friday, in their typical bulldozing fashion, the hospital DEMANDED that the NPs in the remaining clinics sign contracts complete with geographical non-compete clauses by 5PM or they would be summarily terminated. They could also not hold any outside employment to supplement their income.

So, Pat Higgins (Bogata) quit. Annie Patton (Cooper) gave her 30 days notice. Brandi Chadwick (West Paris) refused to sign, but the hospital backed down.

Now this is on top of what they pulled on Jane Tijerina a while back.


The hospital has done so well in providing healthcare to the community, wouldn't you agree? Can you say "Hello Emergency Room...."

...and goodbye to any sense of loyalty by their outlying patients....

Who Knows....8/25

Frank,
When is the decision about the blog's anonymity to be made? We haven't heard much of anything lately. Have you been given a deal to lay low, or what?

No, no deals have been offered, or made. I'm suprised as anyone how long this has dragged out. 'pears that a pending decision won't chase away supporters prior to the election, so why give the legal blogs the chance to throw stones? Conversely, why piss off the largest employer (is it still? Figures, please...) in town?

As to why I've been absent as of late, well, that's a good question that I really can't answer yet.

We're all kind of in limbo until the 'big move' to the North Side. Just looking to see who goes north and who leaves...and how it's all going to fit into Essent's master plan.

Heck, maybe they'll be creating a specialty heart hospital, and sell the South to ETMC as acute care. The original population base would have sustained two of that nature, maybe with that mix it still might--unless the area turns vegetarian...Nahhh.... Not with the most popular eatery called The Fish Fry....

Maxi--mum Support....7/29

I received an email quite off the theme, but worthy of publishing, just the same, from a Red Cross volunteer. It got to me a bit late, but since it indicates that it is the 'first', I have no doubt that there will be others.

Hello friends,

I make it a policy not to forward e-mails, but I ask you to please pass this on to all your Paris-area friends and family.

Tomorrow - Friday, July 18 - is the first donation collection event for our troops in training at Camp Maxey.

Please have a look at the list of needed supplies on this website: http://www.lamarcounty.redcross.org/ - click on "Camp Maxey" in the menu.

Drop items off between 10 a.m. and 4 p.m. at Ramseur Baptist Church gymnasium, 3400 Lamar Ave, Paris.

Anything you can give will be much appreciated and well deserved.

In case you haven't heard, several hundred troops are in the last stages of training at Camp Maxey before heading to Iraq. They will be there the rest of the summer and a community effort is underway (through our local Red Cross chapter) to make them feel welcome, encourage their spirits and show the true colors of Lamar County. More events are planned in the near future and will be publicized on East Texas Radio stations and in The Paris News. (And in the-paris-site....)

- Allan Hubbard
Communications Coordinator (volunteer)
Lamar County Chapter American Red Cross
Community + Camp Maxey
http://www.lamarcounty.redcross.org/ - click on "Camp Maxey" in the menu

I don't care what your politics are, where your leanings take you, if you had a son or a daughter being deployed over there, how you would wish that they were treated while in a different town/state/country. Time to check the list, and see what you can give. Undoubtedly you can donate at any time....frank

Cheap To Keep?....7/26

Back to the drawing board, I guess. I wonder what I cost to recruit the last guys and what the hospital will pay for the next bozos.

Well here's some interesting news....seems the Full Time Radiologist, of whom they were soooooooo pleased to have, has turned in his notice. Seems he doesn't like being the ONLY full time rad and, shucks, the money is too dern low to boot. Awwwww. Back to Ye Olde Locum Tenums.

Rio Rojas boys don't look so bad now, do they???

(Photo of Jim Mabe, also known as "Droopy Drawers".)

As an update, since we are talking about money: Paris remains the same, Sharon increased it's profit to $1.8M, Nashoba Valley stayed the same, Southwest dropped to $-2.4M and Merrimack Valley is certainly in the valley...$-4,323,137. What it comes down to is a loss of $-4.5M per year.

So, Essent needs to sell, but who would buy? Investment capital is getting tighter, and you could see that Vestar, GE, and T-C might want to lighten their load.

And, obviously, I must not have had an effect on the bottom line of PRMC...why it's been sitting at a half-million dollar loss for a while now.

Staying Out Of Politics?....7/19

Is this the same company that Hud Connery founded? Hud, who gave so much to political candidates? In checking the Essent PAC record, it would seem that this is the election that they're staying out of...a far cry from previous elections in which Hud personally gave thousands ($70K+, minus the $7,250 returned for over contributing) in campaign contributions. Likewise did top Essent executives. They even tried to have a fundraiser for a political 'friend of Sharon Hospital'...but, we're not trying to buy Sharon Hospital any more, are we? And, besides, the fundraiser was cancelled as being in violation of federal rules governing campaign finance. I still wonder why Hud donated $500 under Arcon Healthcare/COO, in 2004. Wasn't it defunct in '98? Ahhh, it must have been for old times sake....

But the current crew doesn't seem to be givers. Take that as it may....

Hey, speaking of the current crew, have you noticed that Dick Salerno is back with FTI? At least his name is on the website. He wasn't a big giver, either. $250 when he was with Healthtrust.

How Low Can You Go?....8/25

If true (and only those actually at the hospital can confirm) this little snippet is pretty damning for Essent's profitability:

Last week Nashoba Valley Medical Center set a new record for their inpatient census. There was a grand total of FOUR INPATIENTS. Yes, I said FOUR INPATIENTS.

Essent should start thinking about changing from a FOR PROFIT status to NON-PROFIT status. Staff continues to be sent home daily and there aren't many elderly still choosing NVMC for their healthcare needs. The next generation knows to stay clear of NVMC and travel another 20 minutes to the next facility.

While census is usually lower during the summer, the depth of this low sends an obvious signal: Not viable in its current configuration.

Reactions....8/16

Some people only read the posts--a mistake on their parts. I can kick a topic to life, but the people that are living it may have several different viewpoints on the subject matter. These were generated by the last post:

Tell Todd/Matt that if the blog has lost steam it's because some people are afraid to post lest they lose their jobs. The lawsuit has done more to damage Frank's rep and his business than the other way around!

I know what he means...fear is always a factor....

Todd/Matt/whoever this guy is writes (most likely on his company's time):

"Frak-a-rino:
I only check your blog every few weeks anymore.....You have run out of steam, bro'. Looks like despite your best efforts you have been singularly unsuccessful in bringing Essent to its knees.

This may be a good response in your court case.....you haven't caused a whit of damages, so why the h@#$ are they wasting their time and money suing you? "

Do your homework, Toddster- had you read some of the posts and did a little homweork (in between playing solitaire and tetris on your company's computer), you would have read this company is awash in red ink. From a heavily profitable year (50 grand- woofreakinhoo) to the 4.5 million loss recent reported.

Essent doesn't need Frank's help in FUBARing its facilities, swallowing up all that investment money. They're doing just fine all by themselves. All this humble blog is doing is reporting the truth, which in itself is a dangerous weapon. THAT is what Essent has their shorts in a wad over- people are paying attention to the man behind the curtain, and not the smoke-and-mirrors display run by Dud, dick and Duckboy.

Actually, I must give Essent a little credit- they're the perfect model of how NOT to run an allegedly for-profit company.

-The poster NOT known as Frank a/k/a John Doe number any

When it comes down to it, they are just trying to blanket all possiblities with the 1-10 thing. Even if it's determined that my comments were not libelous, they can say that the only way to find the 2-10 is through my account. Were it true, that would be one thing. Now, even with the settings set to forward, blogger doesn't and I haven't even a clue when comments are made.

"According to the latest American Hospital Directory (AHD.COM)data, when you add up the fiscal performance of all Essent hospitals for fiscal 2007, the company lost $4.5 million. Contrast that to fiscal 2006 when the combined operating profit was $55,000. How long are these idiots going to be able to keep their jobs with losses like these?"

Waitaminit...........this is a for-profit chain, right? Supposed to make some money, right? If I were pouring millions of dollars into a corporation, I'd expect them to make a little money, right?

This ain't a for-profit anything- it's a massive tax write-off, a money pit. Pouring good money after bad is not what I call a sound investment.

Matt/Todd/whatever the h___ his name is this week mocks this blog for "not bringing Essent to its knees". I'd say Essent and it's carload of circus clowns are doing a nice job of wrecking this company all by itself- what could this little ol' blog from Texas do, other than report on the train wreck taking place in Nashville, Paris, Ayer, Sharon and SW Pennsylvania.

And, finally:

Seems not much different than when the big mining companies ran the towns and the company store. Essent may be hoping that the Judge forgot that era, and the laws that prevent slavery....

So, you see, the posts aren't the fun part: the reactions are. You have to click a few times, but it's all there.

Vote, and Vote Often (Part Deux....7/4

A question has been asked:

Any news yet? Or is the ozone cloud that is emanating from the judge's brain still hanging over the courthouse, as he ponders this decision.......

Watch it come down to a coin flip: heads, guilty; tails, innocent.....

......and Essent provides a two-headed coin.

Actually, I'd hate to be in his spot. Basic liberties vs the largest single employer in town (might not be any more with the outsourcing, but for argument's sake let's say it is)...and with an election coming up. The dissection of his decision will be in the legal reviews as well as the boardroom.

But, I'm not wild about mine, either. Legal representation is not free, and I'm going to hate being back in the state court of appeals. As Todd (formerly known as Matt) comments:

Frak-a-rino:
I only check your blog every few weeks anymore.....You have run out of steam, bro'. Looks like despite your best efforts you have been singularly unsuccessful in bringing Essent to its knees.

This may be a good response in your court case.....you haven't caused a whit of damages, so why the h@#$ are they wasting their time and money suing you?

That's a question for the ages. Hud's ego, initially. Now, probably the point is moot. They want my name, but probably not for an actual trial. It wouldn't gain them anything, and more than likely hurt them--I do have enough to prove what I say. They can impose economic sanctions without that--just look back at Holly and her family. Come to think of it, it probably is still ego. These are still Hud's picked cronies. Dick is still at Essent. Browder was picked by Hud. Dickie picked Duckie.

Smoke Gets the Ayes!....8/25

In roughly two months the entire campus will be smoke-free. Finally, something I agree with! I never could understand why a patient that was sooo sick that they had to use a bedside commode--that was unable to bear the pain of sitting up on their own--could beat a street racer to the door to go out and puff. Besides, it takes a surgical patient about 20% longer to recover if they smoke after surgery. Oxygenation of tissue....



The excuse that was used: It's the norm for Dallas hospitals. Yeah, right. Since when has Duc-boy been concerned with what was done in Dallas--unless the advent was in his favor. One thing it will get rid of--smokers.



If you have to go off campus to smoke, then you have to punch out to smoke. Anyone who doesn't---off with their head! And, last I heard, only two breaks were allowed plus lunch, per shift. So when they're Jonesing over that smoke, and they either find a place to blow it out the window, or punch out so many times they have to pay the hospital to work here....gotcha!



And you wondered how they were going to thin out ranks before transitioning to the North? Meet the new boss...same as the old boss....

News From Connecticut....11/26

An interesting tidbit from the CT branch of Essent. Sharon hospital had seemed detatched from the problems plaguing the rest of the hospitals. However the article does refer to the nursing ratio concerns, as well as the all-consuming debt that Essent carries.

From TCExtra.com

Lakeville Journal
Sharon Hospital opens its books
By TERRY COWGILL
05/29

SHARON — It’s been six years since the first hospital conversion in Connecticut from nonprofit to for-profit.

When Sharon Hospital was under nonprofit ownership, its operations were essentially an open book. Its tax-exempt status required it to reveal much of its finances to the Internal Revenue Service and to state officials.

Essent Healthcare, the privately held company that acquired the nearly 100-year-old hospital in 2002, is required to report less to those authorities. Now Essent executives such as new Chief Executive Officer Michael Browder have decided to disclose unusual amounts of data regarding the hospital’s operations, finances, patient care and comparisons with competitor facilities.

“We want to be more connected to the general public,” said Ben Heller, a member of the hospital’s governing board. “For so long it’s been this mysterious entity.”

Aggressive investing

Heller, Browder and Sharon Hospital CEO Charlie Therrien spoke with this reporter and Lakeville Journal Company publisher Janet Manko last week in the hospital’s board room.

In a four-page insert purchased for insertion into this week’s Journal, hospital officials also revealed that Essent is carrying a significant debt load, which has funded the company’s aggressive expansion. When Essent was founded in 1999 by venture capital firm Thoma-Cressey, Essent’s board of directors and then-CEO Hudson W. Connery saw the firm invest $120 million right away. Since then, Essent has taken on $115 million in debt — borrowed mostly from GE Capital. Essent hopes to retire that debt, or refinance to lower its obligations, by 2013.

“Sharon Hospital today is strong and so is Essent,” said Browder, who replaced Connery last year after the founding CEO was reportedly forced out. “We are comfortable with the debt load. By pure market standards, we are underleveraged.”

From a high of $3.6 million three years after Essent acquired it, the 78-bed hospital’s net income declined to $1.734 million last year. During that time, interest expenses have risen more than 18 percent to $1.729 million, eating into the hospital’s operating profits. However, under nonprofit ownership, the hospital had lost about $16 million in the six years before Essent bought it. Essent owns four other hospitals: two in nearby Massachusetts and one each in Texas and Pennsylvania.

Decline in patient volume

The three men said that Sharon Hospital’s challenges are quite simple. Increasing patient volume remains a priority. From 2004 to 2006, for example, Sharon’s discharges went down 5.3 percent and emergency room visits declined by 5.4 percent. Browder and Therrien said patient volume is down at Sharon’s principal competitors (New Milford, and Torrington’s Charlotte Hungerford) by a similar percentage.

Many hospitals across the nation are experiencing similar declines since mid-2006, owing perhaps to the alternatives including walk-in clinics, outpatient surgical centers, hospices, home therapy and visiting nurses. Browder said he believes that recent improvements in pharmaceuticals and a declining economy have also kept would-be patients away from hospitals. In acquiring new facilities, Essent has always looked for hospitals that do not have a proximity to outpatient surgical centers, Browder said.

The physicians associated with Sharon Hospital, most of whom work as outside contractors to the hospital, are also vying for patients’ attention.

“Doctors are trying to plug the hole and do more in their offices, so they are also our competitors,” Browder explained.

Births at the hospital, however, have been a bright spot. They’ve increased about 10 percent since Essent acquired Sharon. A new 11,000-square-foot women’s services center finished last year could have something to do with that.

Financial advances, stability

In the six years it has owned Sharon, Essent says it has retired the hospital’s previous debt, financed an $8-million renovation project, helped fund a locally controlled community health foundation worth between $16 million and $20 million, and restored the hospital’s long-term fiscal health — all without a reduction in patient services.

And there was last year’s $17 million capital improvement project, which included not only the birthing center, but a new emergency department, an addition to the radiology department and a new 1,200-square-foot facility to house the magnetic resonance imaging equipment.

Through its first five-and-a-half years of ownership, Essent says it has spent more than $34 million in additions and improvements to Sharon Hospital’s physical plant and equipment. That amount is greater than the hospital’s net annual revenue when it was purchased.

Response to community concerns

Still, in the statements put out by its governing board in this week’s Journal, Essent officials concede that patient “volume has not yet sufficiently increased Essent’s significant investments [and] the debt created to increase business is large.”

In a letter to the editor in The Lakeville Journal earlier this year, Victor Germack, a financial analyst and member of the Community Association To Save Sharon Hospital (CASSH), a group that opposed the sale to Essent, raised what he called “several troubling issues.” Therrien acknowledged that today’s insert in The Journal is, in part, a response to Germack’s letter.

Germack went to Hartford to the headquarters of the state Office of Health Care Access, whose approval was critical to the Essent sale. He reported that of Essent’s five hospitals, “only Sharon Hospital was marginally profitable. The four others showed net losses for fiscal 2006.” Germack raised questions about Essent’s debt load, its overall financial condition and was particularly concerned about staffing levels and the degree of charitable care given at Sharon.

Indeed, The Lakeville Journal received a letter last April complaining that “as a result of the spending on the physical appearance of the hospital, the nursing staff has had considerable changes to their working conditions.”

The letter, which was signed only as “a group of concerned employees at Sharon Hospital wanting quality healthcare,” said nurses are “being forced to work” under a lower staff-to-patient ratio and that often “nursing personnel are being canceled and told to stay home.” Complaints to the administration fall on deaf ears, the letter claimed, so there have been some discussions about “joining a healthcare union.” Therrien said those employees’ concerns have been addressed.

“We follow national standards and our own determinations. I feel confident that our staffing levels are appropriate,” Therrien said. “There will always be people who disagree, but we have worked with nursing leadership to make sure they have the right support and resources.”

Finding quality doctors

Another significant challenge for Sharon Hospital is recruiting doctors. Shortages exist in adult and pediatric primary care, where Therrien said he would like to have four more physicians; and in endocrinology/diabetes, where the hospital could use one more.

The ranks of medical school graduates have been declining nationwide, Therrien noted, in part because of increased demands on physicians’ time and resources in order to comply with regulatory burdens and insurance. Combined with the cost of living in the Northwest Corner and an ailing national economy, the climate for finding qualified physicians leaves a lot to be desired.

“Recruiting doctors is hard,” said Heller. “Stop to think what it costs to buy a house here.”

Therrien has had less trouble recruiting qualified nurses, but was quick to “knock on wood.” He also insisted that Sharon Hospital fulfills its legal obligation to care for those who cannot afford care.

“We do not screen for financial ability,” Therrien explained. “We do go through a process to see what people can pay. Whether you have insurance or not is not necessarily the determining factor.” He added that Sharon Hospital has financial counselors who work with patients and direct them to local services that can help them further, if needed.

But all three men emphasized the importance of the concluding sentence of this week’s insert: “Finally, we are faced with the largest problem of all: How can the nation’s 2,000 small community hospitals survive in today’s atmosphere of intense governmental, economic and medical pressures?”


© Copyright 2008 by TCExtra.com

Just remember: Sharon Hospital is profitable. One of two in the Essent chain. They are talking about retiring Sharon's debt in that time frame, not Essent's.