Disclaimer:- The material is selective
and not all inclusive. The extracts do not necessarily reflect the
perspective of the original. Corporate denials and explanations have
not been included. No claim is made that all of the matters referred
to are true. The intention is to give the flavour of the material and
an idea of the extent of the allegations. Can there be so much smoke
without a large fire? This is a matter of public welfare and the
interests of the pubic must be placed before those of the
corporations.
Introduction to this web page
My thesis is that corporate individuals live and build their meanings in the world of the marketplace. They respond to the impact of the other worlds by compartmentalising them, denying them and rationalising when denial becomes impossible. This page reveals the marketplace. It is intersected by the other pages but not in a deep or human manner.
To fully understand what is happening you should consider what was happening in the other Vencor worlds at the same time, and also what was happening in the rest of the marketplace. The fraud was alleged to have started at least in 1992 and much of Vencor's financial success was probably built on this.
The problem of deficient care was endemic to the corporate nursing home chains at least since the early 1990's. A review of Hillhaven's conduct before it was purchased by Vencor was titled "Hillhaven Unsafe Haven". I have no information about standards of care by Vencor before it entered the nursing home market, but it seems very likely that it inherited problems from Hillhaven and did nothing about them.
COMMENT:- Vencor bought Hillhaven which was once owned by Tenet/NME. It was spun off in the late 1980's under the same NME directors. Hillhaven, and so Vencor, Horizon and Sun Healthcare were therefore exposed to and acquired much of the disturbing culture developed by Tenet/NME, HCA and other large corporations during the 1970's and 1980's.
That they pursued many of the same financially successful policies is therefore not surprising, nor that this culture has become so widespread. At no stage did Tenet/NME staff fully confront what had happened or link their misconduct to their policies. The health care market simply ignored the lessons. To confront them would have meant confronting fundamental beliefs in the validity of the marketplace model.
The misuse of patients and the extensive fraud should be seen in this historical context. The first two extracts relate to this history.
New 'M Watch them grow, And grow.
New Mexico Business Journal, April. 1996 April, 1996 Vol 20; No
4; pg 15
Arlene Odenwald
And so we have Horizon/CMS Healthcare Corp. and Sun Healthcare Group Inc. friendly rivals and. one might say, spinoffs of another health care company, Hillhaven Corp., of Tacoma, Wash. which -- in a rather daring move -- Horizon attempted to acquire last year. Instead, Hillhaven was acquired by Vencor. Inc., Louisville. Ky., a long-term acute care company, one-fourth the size of Hillhaven. the company where Andrew Turner: 49, Sun's chairman. and Neal Elliott. 55, Horizon's chairman. met.
---------------------------------------
What is possible. however. are large companies that will dominate different regions of the country. Will the Sun slip over the Horizon, or will the Horizon swallow the Sun? Or will Vencor, the company that acquired Hillhaven, look with heightened interest at Hillhaven's children and try to create one. big--very big--happy family once again?
I have put the full article on the web site
Justice Department Probes Medicare Billing
by Vencor
The Wall Street Journal 11/18/98
By Chris Adams and Michael Moss
Vencor, based in Louisville, Ky., began as an operator of long-term acute-care hospitals that specialized in treating patients dependent on ventilators to breathe. The hospitals thrived because of quirks in Medicare and private insurance policies and became enormously profitable. Today, Vencor owns about 60 such hospitals, although a majority of its revenue now comes from nursing homes and contracted services.
COMMENT:- The 1990's were years of vast profits and meteoric expansion by the nursing home chains. Vencor was out in front. It was the darling of Wall Street. I do not have many press reports from this time but have included references to it in the selected abstracts. It was take over or be taken over. Vencor's successful business was under threat from Columbia/HCA and it therefore moved into nursing homes by buying Hillhaven in 1995. Hillhaven (310 homes) was several times its size. This was before I became interested in nursing home chains. Like Columbia/HCA it tried to get into the HMO business and so control profits by being both purchaser and provider.
Some of the articles which follow reflect its continued expansion, its egotistical belief in its success, its unwillingness to confront an emerging threat, and its corporate extravagance. There are hints of trouble brewing but not from Vencor. When its profits started falling in 1998 Vencor did move to protect its shareholders and buffer the vulnerability of its capital assets to bankruptcy by splitting off ownership of its nursing homes into a separate REIT, named Ventas. A number of Vencor shareholders now claim that this was a fraudulent subterfuge to preserve Vencor at their expense.
Vencor extends Transitional bid
Modern Healthcare
1997 May - June
Vencor, a Louisville, Ky.-based long-term-care company, has extended the expiration date of its $639 million cash tender offer for Las Vegas-based Transitional Hospitals Corp. to June 10 from June 4. Vencor said about 11 million of Transitional's 39.9 million shares of common stock have been tendered at $16 per share. The deal would merge the two largest operators of long-term acute-care hospitals and is under federal antitrust probe.
VENCOR TAKES ON RISK: INSURANCE PRODUCT
MAKES IT BOTH PROVIDER AND PAYER
Modern Healthcare June 30, 1997 Page 66 - News
A recent deal struck by Louisville, Ky.-based Vencor marks the first time a long-term-care provider has entered the payer side of the business.Vencor has partnered with CNA, a Chicago-based insurance company, to launch a new long-term-care insurance product called Vencor Gold this fall.
Vencor, the nation's second-largest long-term-care company, will reinsure 50% of the risk through a wholly owned subsidiary and provide clinical and utilization review services. CNA has agreed to share 50% of the profits and to market and underwrite the product.
------------------------------------
Reed said the product is targeted individuals over 50 who are looking for insurance to supplement their Medicare or Medicaid coverage.Policyholders will receive discounts, which have yet to be detailed, on services provided by 314 skilled-nursing facilities owned by Vencor and more than 1,000 facilities that contract with Vencor's Vencare division for rehabilitation and other therapies. If policyholders go outside Vencor's network, they can still receive benefits but at lower rates.
Reed said Vencor is betting that the private sector will be expected to pick up more and more of the nation's long-term-care costs as the government looks for ways to reduce the rate of growth in the federal Medicare and Medicaid programs.
-----------------------------------
With its deal, Vencor is merely getting its feet wet in the insurance business compared with the head-first efforts of other healthcare providers.Vencor's risks have been minimized, noted Stephen O'Neil, a vice president at Hilliard Lyons in Louisville, by partnering with an established underwriter rather than developing a new infrastructure or acquiring an existing insurance company.-
-Charlotte Snow
Vencor investor reduces its stake
The Courier-Journal (Louisville, KY.) October 18, 1998
Vencor has lost some support from a big backer, but picked up an endorsement from another corner.Franklin Resources, a mutual-fund company that includes noted investor Michael Price, apparently has cut its stake in Vencor by about a third,-
-----------------------------------------
-According to I/B/E/S International, Vencor was recently rated by one analyst as a strong buy and by two others as a buy; 10 analysts rated the stock a hold.
1997 HOSPITAL MERGERS, ACQUISITIONS, JOINT
VENTURES AND LONG-TERM LEASES (PT. 1 OF 5) Major corporate
activity
Modern healthcare Jan. 12, 1998 Page 41 Cover Story
Vencor, Louisville, Ky., acquired 56-bed Thompson Memorial Medical Center, Burbank, for undisclosed terms and renamed it Vencor Hospital-Burbank.
MARKET PROFILE: CHANGE IN OHIO'S BIG SMALL
TOWN: TRADITION-BOUND CINCINNATI GOES WITH HEALTHCARE FLOW
Modern Healthcare Feb. 2, 1998 Page 50 News
A number of joint venture outpatient surgery centers between doctors and hospitals are under way with more expected to come, and long-term-care provider Vencor recently announced it would open a facility in the market.
Size does matter; healthcare industry
mergers and acquisitions; Cover Story
Hospitals & Health Networks June 20, 1998 SECTION: No. 12,
Vol. 72; Pg. 28;
Blecher, Michele Bitoun
FIVE LARGEST DEALS OF 1997
1. Vencor acquired Transitional Hospitals $ 628 millionREHABILITATION -- FIVE LARGEST DEALS OF 1997 (millions)
1. Vencor acquired TheraTx $ 515
J.C. Bradford & Co. analyst upbeat on
Vencor stock
Business First-Louisville October 5, 1998
A number of changes at Vencor Inc. prompted one analyst to put out a buy rating on the company's stock. Frank Morgan, an analyst with J.C. Bradford & Co. in Nashville, increased his rating from neutral to buy. "While earnings visibility is admittedly low for Vencor and the industry, we sense a turn in the company's business prospects," according to a Sept. 29 report.
__________________________
The new payment system gives Vencor a chance to make a profit, if it can keep its costs below the Medicare payment, Lechleiter said. He said the Medicare census has been more than 4,100 a day recently. In addition, Vencor is making strides in its cost-reduction program - -
__________________________
Vencor's appointment of Edward L. Kuntz as president and chief operating officer is good for the company-
-----------------------------------
-W. Bruce Lunsford, Vencor's chairman and chief executive officer, gave up the title of president to Kuntz. Vencor began by operating long-term, acute-care facilities and didn't enter the nursing home business until it acquired Hillhaven Corp. in September 1995.
__________________________
Ventas is a real estate company that owns and manages the facilities where Vencor provides patient care. Morgan also revised his 1999 estimate to a gain of 12 cents a share, up from 10 cents per share. Vencor isn't making any projections about earnings and isn't saying whether or not it agrees with analysts, Lechleiter said.
Vencor Inc. planning to buy One
Commonwealth place
Business First-Louisville October 5, 1998
Vencor Inc. is negotiating with Aegon N.V. to buy its One Commonwealth Place office building on Broadway between Fourth and Fifth streets. Vencor plans to consolidate its headquarters operations there at least temporarily. Buying the three-building complex from Aegon, which acquired the property in its purchase of Providian Corp. assets in 1997, does not mean Vencor is giving up on the $ 60 million signature skyscraper planned for River Road and Sixth Street, said Susan Moss, Vencor's vice president of corporate communications. "That is still a dream Vencor has," Moss said. "This just means it is on hold for right now. This is our immediate solution to have everyone in one building."
__________________________
One Commonwealth Place, which is assessed at $ 36 million for tax purposes. A closing date for the sale has not been set, but Moss said Vencor plans to begin relocating as many as 800 employees, now located in four buildings, to the complex during the second quarter of 1999.
__________________________
Vencor delayed construction of a swirling glass-encased office tower designed by internationally renown architect Henry Cobb. The postponement is just one of several steps Vencor has taken to reduce operating costs by $ 100 million and to shore up sagging stock values.
__________________________
The decision to relocate to an existing structure - even though temporary -may mean that Vencor likely will have to give up some of the $ 11 million in incentives provided by the state and city to keep the company from moving its headquarters to Cincinnati in 1996.
__________________________
The $ 11 million financial commitment was contingent on Vencor spending at least $ 35 million for corporate offices and having a minimum of 900 employees at the headquarters operation before the end of 2000.
Vencor Reports Third Quarter Results;
Turnaround Plan On Track
Business Wire October 22, 1998
W. Bruce Lunsford, Chairman and Chief Executive Officer, commented, "This quarter has been one of the most challenging in our history, and I am pleased to report significant progress in our turnaround efforts.-
-----------------------------
-Our nursing center average daily Medicare census in September approached 4,000, and our cost reduction programs were implemented successfully in our three operating divisions and our corporate office. The improvements in our operating results demonstrate that we are managing effectively the unprecedented changes in Medicare reimbursement impacting our industry.
Ventas, Inc. Reports Third Quarter
Results
Business Wire October 22, 1998
Ventas reported that it has invested $ 14.5 million through October 15, 1998 to acquire healthcare-related properties. The properties purchased include two skilled nursing centers and eight personal care facilities for individuals with acquired/traumatic brain injuries.Ventas, Inc. is a real estate company whose properties include 219 nursing centers, 46 hospitals and eight personal care facilities in 36 states.
Vencor Inc.'s third-quarter loss is
smaller than expected Period was first under flat-rate Medicare
rules
Courier-Journal (Louisville, KY.) October 23, 1998
Vencor Inc. announced a third-quarter loss yesterday, but it was smaller than analysts had predicted as the Louisville-based long-term-care company worked to adapt to a new Medicare payment system. It reported a loss of $ 1.1 million, or 2 cents a share, excluding special charges and gains. That was an improvement from a loss of $ 8.7 million, or 13 cents per share, in the preceding quarter. Analysts had expected a loss of 7 cents a share.-
---------------------------------------
-''You get to a quarter which shows, at least upon first glance, a lot of improvements,'' said Charles Lynch, an analyst at Schroder & Co. who has a ''neutral'' rating on Vencor.-
---------------------------------------
-The third quarter was marked by an executive shakeup as Vencor struggled to recover from financial losses and damaged credibility in the second quarter, when red ink was revealed just weeks after the company predicted a profit.-
---------------------------------------
-Ventas Inc., the spinoff created this year, said funds from operations totaled $ 23.7 million, or 35 cents per share, for the period. -------- Ventas shares closed up 62 cents at $ 11.06 yesterday.
Mount Carmel owner faces scrutiny
elsewhere From Minnesota to Florida, Vencor is drawing regulators'
attention
Milwaukee Journal Sentinel October 25, 1998
COMMENT:- An outcry about
deficiencies in care in Vencor homes had started. The reports
describing what happened at Mount
Carmel are in separate files
Vencor, formed in 1985 and specializing in intensive care hospitals, burst into the nursing home business in 1995. It instantly became the fourth-largest chain in the nation when it bought up the 310-home for-profit Hillhaven chain. Its nursing home revenue topped $1.7 billion last year.
Lunsford drops Ventas CEO job
The Courier-Journal November 19, 1998
Bruce Lunsford, chairman of nursing-home giant Vencor Inc. and its related real-estate company, Ventas Inc., is giving up one of his Ventas positions.Ventas, which owns the properties in which Vencor operates nursing homes and long-term-care hospitals, was split off from Vencor in May (1998). At the time, Lunsford was chairman and CEO of both companies. -- - - - - Ventas formally becomes a real-estate-investment trust in January and said the company wanted to have Ladt's promotion in place before then.
SPURNING HOME HEALTH HEALTHSOUTH CEO:
WANING INTEREST CAUSING NOV. 1 EXIT
Modern Healthcare Nov. 2, 1998 Page 6 News
COMMENT:- We still hear
the claim that care is not compromised by profit. In the market
profit opportunities rather than need determine health care policy
and the services available to citizens. Economic theorists obtain
social outcomes by pulling economic strings. The USA has been
manipulating the system this way (e.g. 1997 Medicare funding changes
) and made a horrible mess of it. When confronted by a profit driven
distortion in the distribution of aged care services Australia's
federal minister for aged care Mrs. Bronwyn Bishop (Jan 2001)
promised to correct the problem the same way. This article describes
the phenomenon in home care services in the USA and shows how
available care is determined by profit and not the needs of the
community.
The 30 home health agencies will accept no new patients as of Nov. 1, and existing patients will be transferred to other providers. "Patient care will not be compromised," said Executive Vice President Anthony Tanner.-
----------------------------------------
-HealthSouth is not alone in viewing home health as unprofitable. The National Association for Home Care estimates that more than 1,200 home health agencies have closed this year, representing about 12% of total agencies, due largely to lower reimbursements under a transitional Medicare payment system. The system, which took effect in October 1997, reduced reimbursement by an average 14%.Vencor, a Louisville, Ky.-based long-term-care company, announced in May it was getting out of the home-care business. On Friday, IHS announced that it will sell its home health nursing division.
ABANDONING SHIP: IHS, POST-ACUTE CHAINS
JOIN OTHER HOME-CARE DROPOUTS
Modern Healthcare November 09, 1998
COMMENT:- Here is another
example of profit rather than need driving care. Some may recall the
enormous enthusiasm for post acute care by Sun Healthcare's Andrew
Turner and the way it inspired Australia's federal Minister for
Health. Remember also the way Mayne
Nickless adopted the
policy of "One Stop" medicine. While all of these ideas have merit in
meeting the needs of patients they are dysfunctional when organised
for profit. This article reports their failure. Note that the new
funding system prevents cost shifting. This is one of the advantages
for corporations but as we know in Australia a big problem for
funders.
Hit by lower Medicare reimbursement rates under a transitional payment system implemented in October 1997, Medicare-certified home health agencies are leaving the business in droves. ---- More than 1,200 have closed this year, according to the National Association for Home Care.-
----------------------------------
-Vencor, a Louisville, Ky.-based long-term-care company, closed its 21 home-care agencies over the past several months as part of its effort to refocus on core operations, long-term acute-care hospitals and nursing homes. The home-care agencies accounted for only 2% of annual revenues, the company said.-
----------------------------------------
-''The idea was to be a one-stop shop,'' Dodd said. Theoretically, offering services along the continuum of post-acute-care allows a company to feed patients from one operating unit to another. But many companies, including IHS, apparently were unable to make such cross-referrals profitable, she saidPart of the problem, Dodd said, is that some companies were interested in their home health units less from an operations standpoint than from a financial one.
''The recognized cost-shift that was out there was a windfall for a lot of large organizations,'' she said. Under the new reimbursement system, companies can charge Medicare only minimal overhead costs.-
------------------------------------------
-NAHC spokesman Ron Kolonovski said he expects more closings.''You will see a wave of agencies reorganizing and downsizing. The next six months will be a critical period,'' he said.
COMMENT:- By the end of 1998 Vencor is being forced to confront its falling profit flow and belatedly starts to do something about it. It fails to recognise the extent of its problems. It appoints a lot of new staff. The inevitable happens and it crumbles into Chapter 11 bankruptcy.
Several Nursing Home Companies Placed on
S&P CreditWatch Negative
PR Newswire November 3, 1998
Standard & Poor's today placed its ratings for several nursing home companies on CreditWatch with negative implications (see list below). The CreditWatch listings affect over $8 billion in rated debt.-
---------------------------------
RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONSVencor Operating, Inc.
Corporate credit rating ------- B+Subordinated debt ----------- B
Bank loan rating ------------ B+
Vencor Announces Receipt of $ 22 Million
From Sale of Its Investment in Colorado MEDtech, Inc.
Business Wire November 6, 1998
Vencor, Inc. (NYSE: VC) today announced the receipt of approximately $ 22 million from the sale of its investment in Colorado MEDtech, Inc. (NASDAQ: CMED). Proceeds from the sale were used to reduce outstanding indebtedness.
Thomas T. Ladt Named Chief Executive
Officer of Ventas
Business Wire November 17, 1998
The Board of Directors for Ventas, Inc. (NYSE: VTR) today announced that Thomas T. Ladt, President of Ventas, will become Chief Executive Officer effective January 1, 1999. Ladt will replace Bruce Lunsford, who is currently Chairman and Chief Executive Officer of Ventas. Lunsford will remain Chairman of Ventas."Tom Ladt is the ideal choice to become CEO since he has served as President of Ventas from its inception," said Lunsford. "This will allow me more time to focus my day-to-day energies on Vencor. "
U.S. attorney investigating
Vencor;
The Tampa Tribune November 19, 1998
COMMENT:- By the end of
1998 several Qui Tam whistle blower actions were before the
government and it had commenced its fraud investigations. The press
reports on these are in
another file.
Since May, Vencor's stock has fallen more than 67 percent. Vencor shares closed Wednesday at $ 4.683/4.
Vencor names three division chiefs ;
Reorganization now complete
The Courier-Journal (Louisville, KY.) November 25, 1998
COMMENT:- Note
Schweinhart is from Columbia/HCA
by this time under investigation for a massive fraud
Vencor Inc., the Louisville-based long-term-care company, has completed its reorganization by naming presidents for its three divisions, including a nursing-industry executive from outside.The company yesterday announced the appointment of Donald D. Finney, CEO at HCMF Corp., as president of its nursing-center division starting Jan. 4. ---------- Frank Battafarano will become president of Vencor's hospital division, and Frank Anastasio will become president of Vencare, the company's ancillary- services division.
Vencare provides respiratory, rehab and other services to other companies.-
----------------------------------
------ In September it appointed Edward L. Kuntz, a former chairman and CEO of a competing company - - - - - and Richard A. Schweinhart, a senior vice president of Columbia/HCA Healthcare Corp., as chief financial officer. Vencor's stock closed yesterday at $ 4.56, up 12M cents.
NURSING HOME FIRM ADMITS 'BAD DECISION' IN
EVICTING 42
SEATTLE POST-INTELLIGENCER December 19, 1998
COMMENT:- The way
Vencor's "business decision" to discharge unprofitable Medicaid
patients went very sour is recorded in another
page of extracts. Its
about face is recorded in the next article.
Vencor owns more than 200 nursing homes and about 60 hospitals. The company, which has annual revenues of $3 billion, got into the nursing home business in 1995 when it acquired Tacoma-based Hillhaven Corp.
Bed
News: The Business Potential Of Nursing Homes Is Elusive, Vencor
Finds: Bid for High-Paying Patients Brings Firm Headaches, And It Has
to Regroup: Medicaid Is Welcome Now
The Wall Street Journal 12/24/98
By Chris Adams and Michael Moss
When Vencor, an operator of specialized hospitals, announced the acquisition of a big chain of nursing homes three years ago, it billed the move as a master stroke: The company would have an integrated health-care network, providing a broad range of care to America's growing population of elderly people.-
-------------------------------------------
Vencor got its start 13 years ago by creating a health-care niche: It opened hospitals for long-term patients who needed a respirator to breathe. Leading the new business were Mr. Lunsford, a charismatic former Kentucky secretary of commerce with an interest in horse racing, and Michael Barr, who was a respiratory therapist. The hospitals were tightly regimented and enormously profitable. The company went public in 1989 and its stock shot up 500% in just over two years.Its move into nursing homes was partly defensive. Columbia/HCA Healthcare Corp. and others were setting up hospital networks that threatened the growth of Vencor, which had no more than one facility in most markets. Mr. Lunsford decided the way to grow was to become an integrated long-term-care provider. Vencor swallowed Hillhaven Corp., a company that had about 300 nursing homes and was several times Vencor's size.
Vencor to Seek Appraisal of Its Investment
in Behavioral Healthcare Corporation
Business Wire December 30, 1998
Vencor, Inc. (NYSE: VC) today announced that it intends to engage an independent investment adviser to appraise its equity investment in Behavioral Healthcare Corporation ("BHC"), a privately held operator of psychiatric hospitals headquartered in Nashville, Tenn.In connection with this appraisal, the Company anticipates that it will incur a charge to earnings in the fourth quarter related to the expected write-down of the value of its investment in BHC. The current net book value of the Company's investment in BHC approximates $ 63 million. The Company is continuing to explore alternatives to monetize its investment in BHC as part of its overall strategy to reduce the Company's leverage.
LOBBYISTS SPENDING IN WASHINGTON
INFLUENCE, INC.: THE DATABASES for 1998
THE CENTER FOR RESPONSIVE POLITICS
Nursing Homes
(http://www.opensecrets.org/lobbyists/98catorders/H02.htm)
COMMENT:- The ability to
use corporate wealth to exert a profound political influence that is
not in the interests of citizens is a major concern in the USA and
increasingly in Australia. Health care is a major focus of these
activities.
Lobbyist Spending: Hospitals/Nursing HomesClient Total Spending
American Health Care Assn $326,000
American Hospital Assn $9,340,000
Beverly Enterprises $230,000
Columbia/HCA Healthcare Corp $360,000
Federation of American Health Systems $1,060,
Integrated Health Services $50,000
Manor Healthcare Corp $460,000
Vencor Inc $130,000Lobbying data was compiled using 1998 lobby disclosure reports and amendments filed under the Lobbying Disclosure Act of 1995.
Please credit the Center for Responsive Politics.
My Note:- The federation of American Health Systems is the lobbying group for all the corporate health care chains. They also dominate the American Hospital Association. The corporations all contribute large sums for lobbying to these two groups. The other contributions listed for corporations are in addition. Corporate chains spend large amounts in political donations, lobbying and marketing in order to secure the legislation they want, and block that they don't want.
Health Care Property Investors Inc.
Reports Earnings and Record Funds From Operations for Year Ended Dec.
31, 1998
Business Wire January 20, 1999, Wednesday
COMMENT:- Corporations
often lease facilities from REIT's as shown for Vencor below. Vencor
split itself in two in 1998 forming VENTAS as a REIT which owned all
of Vencor's previous facilities and leased them to Vencor. It had the
same directors and shareholders. This was a very clever ploy as when
Vencor went bankrupt it had few assets left. Its capital assets were
protected from the bankruptcy. Note Tenet/NME's involvement in
guaranteeing the revenue from Vencor.
Health Care Property Investors Inc. (NYSE:HCP), an equity health care real estate investment trust (REIT), Wednesday announced operating results for the year ended Dec. 31, 1998.-
------------------------------------
-PORTFOLIO BY OPERATOR/TENANTRevenue(4) Percentage
Grand Total $ 178,196 100.0%
HealthSouth Corporation 12,043 6.8%
Vencor, Inc.(5) 11,970 6.7%
Beverly Enterprises 11,592 6.5%
Emeritus Corporation 11,227 6.3%
Centennial Healthcare 8,887 5.0%
Columbia/HCA Healthcare 8,083 4.Tenet Healthcare 7,744 4.3%(5) Guaranteed by Tenet. In addition, Tenet guarantees another 3.0% of revenues on leases to Vencor but operated by other providers.
Vencor founder, CEO Bruce Lunsford
resigns
The Associated Press January 22, 1999
COMMENT:- Cofounder Barr
resigned in 1998 after the Vencor Medicaid scandal. Now Lunsford, the
main force behind Vencor's practices falls on his sword - or is
pushed. Vencor will eventually be charged with a US $1.3 billion
fraud but there is never any suggestion that Lunsford and Barr go to
prison - or even pay fines. The shareholders pay. References and
extracts relating to the matters listed as contributing to Lunsford's
downfall are on other pages dealing with fraud
and patient
care.
Vencor Inc. announced Friday the resignation of Bruce Lunsford, the company's co-founder, board chairman and chief executive officer. - - - had appointed Edward L. Kuntz to replace Lunsford."Bruce's entrepreneurial spirit has been the driving force behind Vencor for these many years," Vencor co-founder and longtime director R. Gene Smith said in a statement late Friday. "His vision and passion have enabled Vencor to become one of the premier long-term health care providers in the country.-
-----------------------------------
-Lunsford was head of the company since its inception in 1985. The nation's second largest nursing home operator, Vencor's health-care network operates in 46 states with more than 65,000 employees.
- U.S. Justice Department that --- billing practices were being investigated.
- .U.S. Department of Health and Human Services --- was investigating Vencor,- -
- reports the company violated Medicaid rules when it discharged (Medicaid) patients --- fined $ 270,000 by the state of Florida- is appealing a fine of at least $ 533,000 by the state of Georgia --- Medicaid transfers and the quality of care.
- It also has been under investigation by Kentucky, Illinois and Wisconsin.
Lunsford quits as Vencor CEO; Failed to
heal troubles of firm he co-founded
The Courier-Journal (Louisville, KY.) January 23, 1999
Bruce Lunsford (aged 51), who cofounded Vencor Inc. with three employees in 1985 and developed it into a Fortune 500 company with more than 65,000 workers, unexpectedly resigned yesterday as its chairman and chief executive officer.-
- - - one of Louisville's bestknown and most successful entrepreneurs, - - - Lunsford will stay on as chairman of Ventas, the real estate company formed last year to own the hospitals and nursing homes Vencor operates.A former Kentucky commerce secretary, Lunsford started Vencor with one long- term care hospital and left it with 60, plus 292 nursing homes - perhaps the nation's largest provider of full-service, long-term care.-
-----------------------------------
-Vencor was primarily a hospital company until 1995, when it acquired the Hillhaven nursing home chain, which was four times the size of its new owner. Hillhaven's managers, with their nursing home expertise, did not stay with the merged company.''Since today nearly 65 percent of our total revenues come from the nursing center side and since probably 95 percent of our problems have occurred from the nursing center side,'' Lunsford said yesterday, ''I think we need strong leadership in that area.''-
--------------------------------------------
-''Given the progress they've made in the last six months, I view the situation as somewhat stable,'' O'Neil said. ''I didn't have any sense that Bruce was going to leave.''Kuntz, the former chairman and CEO of Living Centers of America, takes over -- - - -
-Plans to build a $ 60 million riverfront headquarters tower, which were postponed to cut costs last year, have now been permanently shelved,-
-------------------------------------------------
-The company's June announcement that its earnings would be lower than forecast caused the company's stock to plummet last summer - reaching a low of $ 2.93, a fourth of where it stood in early May, shortly after the firm spun off its real estate into a separate company. The reality was even worse than the company predicted: The modest second quarter profit it forecast turned out to be an operating loss of $ 8.7 million.-
-------------------------------
-Lunsford, who still owns between 2 percent and 3 percent of Vencor, said he'll take some time to reflect before deciding what else he will do.The former commerce secretary under Gov. John Y. Brown said he would not rule out a run for public office, an ambition he has acknowledged in the past. But Lunsford quickly added that he has no plans to run for anything right now.
VENCOR INC.
Business: Major U.S. provider of full-service long-term health care
Operations: Operates 60 long-term care hospitals and 292 nursing homes, and provides care-related services to other nursing
Headquarters: Louisville
Ownership: Publicly held
Founded: 1985
Employment: 65,000 including about 800 at Louisville corporate headquarters
Annual Revenue: About $ 3.1 billion
Stock: VC - NYSE
Yesterday's close: $ 4.44VENTAS INC.
Business: Real-estate investment trust
Operations: Owns hospitals and nursing homes in which Vencor does business, and leases them to Vencor; owns and manages other health-care properties
Headquarters: Louisville
Ownership: Publicly held
Founded: 1998
Employment: Fewer than 10
Funds From Operations: $ 23.7 million in the third quarter of 1998
Stock: VTR - Yesterday's close: $ 12.63
VENCOR'S TURMOIL; Stock price hurt by new
rules, probes
The Courier-Journal (Louisville, KY.) January 23, 1999
COMMENT:- Nursing Home
Chains all loudly blamed the changes in Medicare funding for their
problems and pretended that their financial mismanagement, large
depts, overservicing and fraud had nothing to do with it. I do not
intend to include Vencor's claims in this regard after
this.
Once high-flying Vencor Inc. has endured eight months of turbulence leading up to yesterday's sudden resignation of chairman and CEO Bruce Lunsford.Much of the turbulence has stemmed from lower earnings due to changes in the Medicare reimbursement system. But it was exacerbated by government investigations into whether the Fortune 500 company discharged Medicaid patients to make room for private-paying ones.-
----------------------------------------
-The company said it planned to cut 1,000 jobs nationwide to save $ 100 million a year, and put on hold its plan to build a 23-story corporate headquarters on the Louisville waterfront.The announcement wasn't well received by analysts and investors, and touched off a long-running slide in Vencor's stock, which eventually reached a low of $ 2.93 - a fourth of what its price had been in early May. The stock closed yesterday at $ 4.44.
- - - - - nation's largest full-service, long-term care company, and its long history of success. In the wake of the June announcement, the company undertook a series of personnel changes at the top, bringing in experienced outsiders to replace longtime Vencor insiders.-
-----------------------------------
-Coming in was turnaround specialist Stanley Gault, the retired chairman and CEO of Goodyear Tire and Rubber Co., who was also to assume the role of mentor and adviser to Lunsford.Resignations
Sept. 4, Reed as chief financial - - replaced by Richard Schweinhart, a senior vice president of Columbia/HCA Healthcare Corp.Three weeks later, -- Barr also had resigned. --replacement: Edward L. Kuntz, a former chairman and CEO of a competing company, Living Centers of America. Kuntz later replacing Lunsford as chairman and CEO.
Vencor's shocking earnings announcement had come shortly after the company came under fire for Medicaid improprieties.
Vencor Announces Fourth Quarter
Expectations
Business Wire January 26, 1999
Vencor Inc. (NYSE:VC) today announced that it expects earnings for the fourth quarter, exclusive of unusual transactions, to be substantially lower than the third quarter of 1998. - - - - , the Company reported a loss of $ 0.02 per share for the third quarter ended September 30, 1998. Operating results for the fourth quarter in each of the Company's three operating divisions are expected to be below management's expectations.-- - - -Hillhaven, TheraTx and Transitional mergers, are also expected to impact negatively fourth quarter results. Certain shareholder litigation assumed in connection with the TheraTx acquisition has been recently settled - - - -approximatel $ 16 million-
- - write-down of its investment in a nursing center in Wisconsin and the previously announced write-down of its investment in Behavioral Healthcare Corporation.-
- - - - may be required to renegotiate its bank credit facility since the previously discussed operating results and adjustments may result in certain covenant violations. The Company is in discussions with its lead banks and anticipates that it will successfully conclude its negotiations prior to releasing its financial results for 1998.-
- - - we are now positioned to move forward. We are proceeding aggressively to address the challenges presented to our three business lines by a difficult industry environment.
Vencor expects heavy losses 4th quarter
was worse than third, but new leader expects turnaround
The Courier-Journal (Louisville, KY.) January 27, 1999
COMMENT:- Although no one
says it, in fact many are making positive noises, it is becoming
clear that the company will soon go bankrupt.
Vencor Inc.,- - - announced yesterday that it expects heavy losses for the fourth quarter of 1998 - its third straight quarter of losses. - - - - will be ''substantially'' larger than the $ 1.1 million that the company lost in the third quarter. - - - may also force it to renegotiate $ 800 million in credit agreements, because its net worth may fall below the required level.-
- - emphasized yesterday that the company is up-to-date on all its payment obligations.But one analyst, John Ransom of Raymond James & Associates, said Vencor has ''put itself in the position where they're on the financial precipice.''
In hindsight, Ransom added, ''the last three things ( Vencor) did have all turned out to be misguided.'' He cited the 1997 purchases of Transitional Hospitals Corp. and TheraTx Inc., a rehabilitation company, and last year's spinoff of Vencor's real estate into a separate company. - - - - ''We've put out several comments stating that we don't think there's any equity value in this company,'' Ransom said.-
- - - renegotiate include $ 500 million in outstanding term loans and a $ 300 million revolving line of credit that now has no outstanding balance. The main lenders are J.P. Morgan and Bank of America.
Briefs from Louisville, Owensboro,
Cincinnati, Dale, Ind. --
-The Associated Press State January 28, 1999
Riverfront property once planned as the site of a $ 60 million headquarters for Vencor Inc. has been put up for sale-
-------------------------------
-Besides putting the properties up for sale, Vencor also is negotiating with the state and city over incentives it was given as part of the effort to attract the headquarters project.
Vencor Obtains Bank Covenant Waiver
Business Wire February 3, 1999
Vencor, Inc. (NYSE:VC) today announced that it has obtained the necessary approval from its bank lending group to secure a covenant waiver related to its $ 800 million credit facility through March 31, 1999.
Lenders let battered Vencor keep borrowing
Losses push health-care company below its net-worth requirement
The Courier-Journal (Louisville, KY.) February 5, 1999
Vencor Inc. said yesterday that a bank lending group has temporarily waived a net-worth requirement the company says it can't meet and will allow the nursing home and hospital operator to continue limited borrowing through the end of March.
Vencor, whose earnings have been hurt by lower Medicare reimbursements, announced last week that it would have to renegotiate $ 800 million in credit agreements with lead lenders J.P. Morgan and Bank of America, along with others, because the company expects to fall below a required net worth of $ 850 million when its 1998 fourth-quarter results are posted.
Nursing homes to spend up to $ 20 million
to improve image
The Arkansas Democrat-Gazette February 07, 1999
COMMENT:- When
Tenet/NME's disgraceful conduct was exposed in Texas in 1991 senior
staff flew to Texas to interview public relations firms. They did not
go to their hospitals. They saw this as primarily an image problem
and did not consider the possibility that they were doing anything
wrong. Months later the practices were unchanged. Similarly Vencor
did not believe that its Medicaid practices were wrong. It continued
to discriminate in its admissions and discharges even after being
fined. The aged care chains are now adopting the Tenet/NME solution,
going to PR firms.
WASHINGTON -- Nursing homes plan to spend as much as $ 20 million annually to improve an industry image battered by reports of poor-quality care and federal fraud investigations.The American Health Care Association, representing nursing homes such as Beverly Enterprises Inc. and Vencor Inc., has asked public relations agencies to submit proposals for its campaign, which would begin in the year 2000.
AHCA is considering launching a multimillion dollar image campaign in the year 2000 which will improve the public's image and understanding of the nursing-home component of the long-term care industry," the trade association says in a letter to public relations agencies.
5 Healthcare Firms Ratings Cut By S&P
Over Medicare Changes
Dow Jones Newswires March 3, 1999
http://interactive.wsj.com/archive/retrieve.cgi?id=BT-CO-19990303-003296.djml
NEW YORK -- Standard & Poor's said it lowered the ratings for five companies, and their subsidiaries, being impacted by Medicare's adoption of the restrictive Prospective Payment System (PPS) for the reimbursement of nursing homes.The ratings for Vencor Operating Inc. also remain on CreditWatch with negative implications, S&P added. Ratings for Vencor were lowered on Jan. 26, 1999 after the company's public acknowledgement of "significant operating and financial challenges," S&P said.
RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE
To From- Vencor Operating Inc.
Corporate credit rating B
-Subordinated debt CCCBank loan rating B
-RATINGS AFFIRMED
LONG-TERM CARE HIT WITH DOWNGRADES
Modern Healthcare March 08, 1999
The current B- corporate credit rating on IHS, Mariner and Sun-as well as Vencor, which was downgraded in January-indicates ''serious financial difficulties,'' Radinsky said. These companies may need to sell parts of their businesses to meet their debt obligations.
Ventas may sell some properties; Vencor
landlord needs money to repay big loan
The Courier-Journal (Louisville, KY.) March 18, 1999
COMMENT:- Ventas may want
to sell but so does everyone else. There are few buyers.
Ventas Inc. - the real-estate company joined at the financial hip to its only tenant, Vencor Inc. - says it is considering selling some of the hospitals or nursing homes that Vencor operates to repay a $ 275 million loan.-
---------------------------------------
-It has been speculated that Vencor may seek some relief from the $ 221- million-a-year rent agreements as a way out of its own credit crunch.-
-----------------------------------------
-Investment firm Franklin Mutual Advisors Inc. - which held more than 9 million shares, or 13.3 percent of Ventas' common stock, and 6 million shares, or 9 percent of Vencor's common stock at the end of the year - confirmed Tuesday it had been getting rid of the stocks.''We have substantially reduced those positions since year end,'' Franklin chief executive Peter Langerman said through a spokesperson.
Shares of Ventas rose 9 percent yesterday to close at $ 5.44. Vencor was unchanged at $ 1.06.
Vencor to sell site planned for tower
Architectural drawings also to be up for bid
The Courier-Journal (Louisville, KY.) March 19, 1999
Vencor Inc. is bowing to financial reality and selling its dream. The gleaming tower Vencor once envisioned as a dramatic marker on plans and all.
Gene Smith resigns from Vencor board
Business First-Louisville March 22, 1999
Company co-founder cites potential for conflict with Ventas board postR. Gene Smith has become the last founding father of Vencor Inc. to step away from the company.
Smith, who continues to own a significant block of stock in the health care company, resigned as vice chairman to erase what he called the perception of a conflict of interest because of his holdings in Ventas Inc. and his position as director of the real estate investment trust.-
----------------------------------
-Shares in Vencor have ranged between a low of $ 1 and a high of $12.875 in the past 52 weeks. The stock closed at $ 1.0625 on March 17.Ventas stock has ranged from $ 4.625 from $ 17.4375 in the past 52 weeks. Its stock closed at $ 5.4375 on March 17.-
----------------------------------
-But Smith's departure does mean that none of the founders or original executives remain at Vencor.Bruce Lunsford, Smith and Michael Barr started the company in 1985; Barr was removed from the board last spring, and he resigned as Vencor's chief operating officer in September. As chairman and chief executive officer, Lunsford spearheaded the transition of Vencor from a single long-term hospital to a Fortune 500 company with 292 nursing homes and 60 long-term hospitals. He resigned in January.
Vencor is auctioning old KingFish site to
top bidder
Business First-Louisville March 22, 1999
Downtown site was once proposed location for $ 60 million headquarters.
Beleaguered Vencor Inc. will use a national auction company to sell the downtown sites once proposed for its $ 60 million headquarters
BANK MEETING SPURS DRAMATIC SLIDE IN
VENCOR CREDIT
Bank Letter March 22, 1999
Vencor Inc.'s bank debt plummeted into the mid 50s from the low 70s last week as traders sold more than $ 30 million of the credit following a meeting between the company and its bank group. Traders said the company tried to get a permanent amendment to its bank agreement and an extension on the waiver it negotiated in early February, which is due to expire on March 31. "It was pretty ugly," said one trader, noting bids for Vencor stood at 83-85 in late January (BL, 2/1). "They have serious problems. The whole healthcare sector is breaking down and Vencor is one of the leaders [in the decline]," he said.-
-----------------------------------
-Analysts said the banks stood firm in the face of Vencor's pleas for mercy during the meeting. "The willingness of the banks to support and help the company work through what will be several tough quarters operationally was pretty low," one analyst said.-
------------------------------------------
-Analysts added Vencor's problem was also its lack of saleable assets. "They sold all their assets to [Ventas,] - -
VENCOR SETTLES LOWER IN LIGHT TRADING
Bank Letter March 29, 1999
Vencor Inc.'s bank debt continued to slide in trading last week as dealers flipped the paper in two $ 5 million trades at 55 and 52 in the Street. - - - - -. "The bonds are trading as if their next payment [in May] is going to be blocked by the bank group. They're going to restructure, almost certainly," one analyst said.
Vencor Addresses Capital Structure Issues
- - Bank Credit Waiver Extended -- Company Discusses Rent Concessions
with Ventas -- 1998 Form 10-K Filing Delayed
Business Wire March 31, 1999 - -
Vencor, Inc. (NYSE:VC) announced today that its senior bank lenders have granted a further waiver, through May 28, 1999, of breaches by Vencor of certain financial covenants under its bank credit facility.
Ventas, Inc. Filing of Annual Report On
Form 10-K For Fiscal Year Ended December 31, 1998
Business Wire March 31, 1999
COMMENT:- Publicly listed
companies are required to disclose information to the US Securities
and Exchange Commission including annual reports. Failure to disclose
is criminal but corporations choose their own words.
Ventas, Inc. (NYSE:VTR) announced today that it has filed its Annual Report on Form 10-K including the Company's audited financial statements for the year ended December 31, 1998 with the Securities and Exchange Commission.Vencor has announced that it will incur a significant loss for 1998. This could have a material adverse effect on Vencor's financial condition and adversely affect its ability to make contractual and timely rental payments to the Company. - - - - -The Company's auditors have concluded that these matters raise substantial doubt about the Company's ability to continue as a going concern.-
----------------------------------
-Vencor has requested interim rent concessions under its leases with the Company, and the Company has rejected that request.
More signs of problems for Vencor
The Associated Press State & Local Wire April 1,
1999
An independent auditor's report on Vencor Inc. will contain a statement calling into question the long-term health care company's ability to continue in business, Vencor said.Vencor revealed Wednesday that its difficulties go deeper than previously indicated. - - - - it might have to restate its financial reports for last year's second and third quarters. The company also decided not to pay rent due Thursday to Ventas, the company that owns most facilities operated by Vencor.
Perhaps most ominous, Vencor said its independent auditor, Ernst & Young LLP, has told the company that its report on Vencor for 1998 will contain a "going concern" statement calling into question the nursing-home and hospital operator's ability to continue in business.
Vencor reveals deeper financial woes
Auditor's report questions firm's ability to continue
The Courier-Journal (Louisville, KY.) April 1, 1999
Ernst and Young's ''going concern'' statement is due to the absence of a permanent agreement between Vencor and its major lenders. The banks, which had cut Vencor off from its revolving line of credit because the company had violated several parts of the agreement, have extended a temporary waiver through May 28. The original waiver expired yesterday.-
------------------------------
-Before the Vencor statement, analyst John Ransom of Raymond James and Associates said, ''I think either a restructuring or a bankruptcy is this company's future for the next 18 months. Their current level of operating cash flow cannot support their current level of interest, rent and capital expenditures.''
11th Circuit Reopens Medigap Dispute
Between Vencor and Blue Cross - - CASE: Medigap: Vencor Hospitals v.
Blue Cross Blue Shield of RI
Health Law Litigation Reporter April 1999
COMMENT:- Note the way
Vencor charges when care is not covered by Medicare or
Medicaid.
The Eleventh Circuit has vacated summary judgment in favor of Blue Cross Blue Shield of Rhode Island (BCBS), remanding the case for further consideration of whether Vencor Hospitals is entitled to charge BCBS higher daily rates than allowed under Medicare for policyholders of private Medicare supplemental insurance, commonly known as "Medigap." Vencor Inc. is currently in the middle of a heated battle with insurance companies over Medigap charges, having recently received an adverse ruling by a DC District Court. Vencor Hospitals d.b.a. Vencor Hospital v. Blue Cross Blue Shield of Rhode Island , No. 96-5105 (11th Cir., March 8, 1999).Medigap insurance is designed to provide coverage for inpatient hospital care after Medicare Part A coverage has been exhausted. Vencor has typically charged private insurers as much as four times more than the per diem rate it receives under Medicare. This suit arises from BCBS's refusal to pay more than the Medicare rate for two of its policyholders - - - -Vencor sued BCBS to recover over $700,000 of charges remaining after BCBS paid an amount representing 90% of the Medicare rate.
BCBS won summary judgment after a district court determined that the policy unambiguously limits payment to 90% of what Medicare would have paid. Vencor appealed the decision, arguing that the term "health care expenses" refers to Medicare-approved treatments and not to the amounts of these expenses.
Shares of Vencor, Ventas Companies' future
appears in doubt
The Courier-Journal (Louisville, KY.) April 2, 1999
Rattled investors sent stock for Vencor and Ventas plummeting yesterday as they sold off shares in reaction to reports that the Louisville-based companies' continued existence is in doubt.Vencor stock fell 28 percent to close at 94 cents a share in trading on the New York Stock Exchange, while Ventas, which was split off from Vencor last year, tumbled 23 percent to $ 4.92.-
----------------------------
- -- - sharp disagreements between the two companies, - - - - - - Vencor also said it would not pay $ 18.46 million in rent that was due yesterday to Ventas, - - - the independent auditors of both companies expressed doubt about their ability to continue in business.- - - analyst Frank Morgan said that ''- - - - clear indications of how dire the financial situation is at the company.'' Analysts have speculated Vencor may be headed for bankruptcy.
Ventas and Vencor Reach Agreement On
Certain Matters
Company Press Release Tuesday April 13, 1999
LOUISVILLE, Ky.--(BUSINESS WIRE) Ventas, Inc. (NYSE: VTR - news) announced today that it has entered into an agreement with Vencor, Inc. (NYSE: VC - news), its principal tenant, which provides that if Vencor pays the full amount of April 1999 rent on the following schedule, the Company will not exercise its remedies under its lease agreements with Vencor.
Vencor reaches agreement with landlord to
work out finances
The Associated Press State & Local Wire April 14,
1999
Vencor Inc. will have until the end of the month to pay $ 18.5 million in rent that was due April 1 under an agreement with the company that owns the nursing-home and hospital properties where Vencor operates. - - - allow Vencor to pay the money in four installments by the end of the month.-
--------------------------------------
-Tuesday's rent agreement called for Vencor to pay Ventas installments of $ 8 million Tuesday, $ 4.3 million next Tuesday, $ 4.3 million April 27 and $ 1.9 million April 30. - - - - But Vencor could find itself in the same predicament May 1, when another $ 18 million is due.
Vencor given a rent reprieve Firm gets 3
weeks to fix its finances
The Courier-Journal (Louisville, KY.) April 14, 1999
Vencor Reports 1998 Results
Business Wire April 15, 1999
Vencor Must pay $ 90 million in Medicare
overpayment; shows $600 million loss
The Associated Press State & Local Wire April 15, 1999
COMMENT:- There is
much more about Vencor's fraudulent charging on another
page.
Vencor Inc. said Thursday it has until April 23 to repay about $ 90 million of Medicare overpayments or risk having reimbursements suspended.The Louisville-based long-term health care company also issued its long-delayed 1998 fourth-quarter financial statement, showing a net loss of $ 605.9 million, or $ 8.68 per share. For the same period in 1997, the company reported net income of $ 27.2 million on revenues of $ 812.3 million.-
-----------------------------------
-Vencor stock was unchanged in trading Thursday, closing at 81.2 cents per share.
Vencor loses $ 651.5 million in 1998
The Associated Press State & Local Wire April 16,
1999
Vencor Inc. has released its long-delayed 1998 earnings report, showing a loss of $ 651.5 million, much of it due to reducing the value of its hospital and nursing home business to reflect a new Medicare payment system. - - - - The Fortune 500 company said its losses for 1998 were $ 9.53 per share. It recorded $ 506 million in pretax losses in the fourth quarter alone.-
------------------------------
-The banks have given Vencor two extensions, with the latest set to expire May 28. But Vencor's earnings report says if the company pays more than $ 10 million to the financing administration, its credit will be frozen.-
------------------------------
-The report portrays a stark reversal in the fortunes of the company that entrepreneur Bruce Lunsford founded with one hospital in the mid-1980s.It went from making operating income of $ 224.5 million in 1997 to posting an operating loss of $ 572.9 million last year.
Vencor reports $ 651.5 million loss for
1998 Once-thriving Louisville firm is awash in debt
The Courier-Journal (Louisville, KY.) April 16, 1999
Vencor stock continues slide; investors
predict bankruptcy
The Associated Press State & Local Wire April 18,
1999
The Louisville long-term-care company's stock lost 15 percent Friday to close at 69 cents on the New York Stock Exchange. And Ventas, which owns the hospitals and nursing homes that Vencor operates, closed down 13 percent at $ 3.62. - - - - " Vencor, I think, bankrupts shortly - within the next 45 days," said consultant Peter Young of Strategic Healthcare Initiatives.
Vencor Says 4Q Losses Huge, Medicare
Repayment Due
Medical Industry Today April 19, 1999
DEUTSCHE DROPS VENTAS AHEAD OF EARNINGS
RELEASE
Bank Letter April 19, 1999
Original lender Deutsche Bank sold a $ 7 million holding in Ventas Realty last week at 83 prior to the release of the company's earnings, due last Friday after Bank Letter went to press.-
-----------------------------------
-The trader added, "Ventas could survive . . . if they're still able to service their debt." He noted that Ventas would always be able to find a tenant to rent its hospitals.
Vencor Announces Appointment of Owen E.
Dorsey as Chief Administrative Officer
Business Wire April 20, 1999
COMMENT:- The
qualities required of someone to change the culture of Vencor ,
presumably from one which throws
out sick elderly when
they can't pay as well as others to an acceptable and humane
institution are interesting - or is that not the reason Dorsey was
appointed? Could it be a record for creating a culture producing a "
strategic, high-growth environment"
Mr. Dorsey will assume overall responsibility for human resources, corporate and public communications, government relations and all administrative support functions for the Company. - - - - Mr. Dorsey has broad, multi-site experience in stable, growing and turnaround environments and has held senior executive positions with Saks Holding, Inc., the parent company of Saks Fifth Avenue, the Ritz-Carlton Hotel Company and Holiday Inns Worldwide. Mr. Dorsey has demonstrated success in leading organizations through cultural transformations. While at Saks, Mr. Dorsey served on the Executive Management Committee during the company's highly successful initial public offering.Throughout his tenure at Ritz-Carlton, Mr. Dorsey played a key role in developing a strategic, high-growth environment and established a benchmark for consistent product delivery. In 1992, that benchmark earned Ritz-Carlton the prestigious Malcolm Baldridge National Quality Award. Most recently, Mr. Dorsey served as an external consultant, and later as Senior Vice President, of Service Merchandise, Inc., where he reported directly to the CEO and was a member of the Executive Management Team.
Edward L. Kuntz -- said - -" - make him uniquely qualified to step into this role and get the job done."
Vencor, Ventas CEO received more than $1
million in salary
The Associated Press State & Local Wire April 21, 1999
COMMENT:- One of
the major gripes about all of these market corporations is that while
downsizing, deskilling and underpaying their staff they reward the
executives who do this massively. The nurses are particularly angry.
Motivation and commitment by staff is seriously compromised. The
problems in care are compounded.
The former chairman and CEO of long-term care company Vencor Inc. and its spinoff company, Ventas Inc., received more than $ 1 million in salary and bonuses in 1998, a year that ended with both companies in financial trouble.Bruce Lunsford was paid $ 825,000 in severance when he was ousted along with several other executives at the end of the year, according to proxy statements distributed to shareholders before upcoming annual meetings.
And as the company's stock plunged from a high of $ 12 in May to $ 5.50 by late November, Lunsford and other executives were given a break on how much they would have to pay to exercise millions of dollars worth of stock options to reflect the lowered stock value.
Vencor, Ventas paid Lunsford $ 1.05
million in '98
The Courier-Journal (Louisville, KY.) April 21, 1999
Vencor and Medicare Agree to Extended
Payment Terms for Reimbursement Overpayments
Business Wire April 21, 1999
April 21, 1999-- Vencor, Inc. (NYSE:VC) today announced that it has reached an agreement with the Health Care Financing Administration ("HCFA") to extend the repayment of approximately $ 90 million of Medicare reimbursement overpayments. The Company will now be obligated to repay the overpayment over 60 monthly installments.
Vencor gets time to repay Medicare; Firm
has 5 years to pay $ 90 million in overpayments
The Courier-Journal (Louisville, KY.) April 22, 1999
Federal regulators said yesterday they will allow financially troubled Vencor Inc. to repay $ 90 million in Medicare overpayments over the next five years. - - - - That relieves one of the pressures threatening to plunge the Louisville health-care company into bankruptcy but raises questions about another potential problem. Vencor has been told by its banks that its revolving line of credit will be cut off if it makes more than $ 10 million in Medicare repayments. Vencor is in default on a $ 1 billion credit arrangement and wants the banks to restructure its debt.
Lawmakers consider nursing home reform;
Industry losses, resident spur action
The Dallas Morning News April 26, 1999
Financial losses at the nation's largest nursing home chains have increased the urgency of proposed state legislation that would protect residents in the event that a home fails, supporters say.Just this month, at least two major chains have reported losing hundreds of millions of dollars on their operations. Sun Healthcare Group Inc. of Albuquerque, N.M., said it lost $ 761.7 million in the fourth quarter of 1998. Vencor Inc. of Louisville, Ky., pegged its losses at $ 605.9 million in the same period.
Vencor misses interest payment on longterm
note
The Associated Press State & Local Wire May 3,
1999
Vencor Inc., facing a series of deadlines that could determine its future, missed one Monday when the long-term healthcare company didn't make interest payments on financial notes. - - - decided not to make an approximately $ 14.8 million interest payment due Monday on $ 300 million of notes.A short-term agreement expires Wednesday with Ventas Inc.,- - -
Vencor Misses Debt Payment, Raising
Question of Its Survival
The New York Times May 4, 1999
COMMENT:- Note that the
companies in trouble were those which took advantage of Medicare's
item of service in order to milk the system. The Medicare changes
turned off the gravy train and most of these companies were
subsequently prosecuted for fraud.
Analysts said the crux of the problems at Vencor, - - - was the refusal of a co-founder, W. Bruce Lunsford, to reduce the rents the company pays. Mr. Lunsford, who resigned as Vencor's chief executive in January, still holds that post at Ventas, which holds the leases on most Vencor facilities.-
------------------------------------
-Changes in Medicare payments virtually crippled the formerly lucrative business of providing contract therapists and other specialized workers to many small nursing homes. Under the new system, which took effect last summer, Medicare typically pays a flat amount for each nursing home patient instead of paying an added fee for each service the patient receives.
Vencor and Ventas Extend Standstill
Agreement
BusinessWire Thursday May 6 8:11am
LOUISVILLE, Ky.-- -Vencor, Inc. (NYSE: VC) today announced that it has entered into an agreement with Ventas, Inc. (NYSE: VTR) to extend the current standstill agreement until 5:00 p.m. on May 7, 1999.
Ventas extends deadline for Vencor payment
by a day
The Associated Press State & Local Wire May 6,
1999
Vencor's rent deadline extended
Negotiations with creditors are ongoing
The Courier-Journal (Louisville, KY.) May 7, 1999
Vencor mum on whether it paid rent on time
Answer may shape long-term-care company's future
The Courier-Journal (Louisville, KY.) May 8, 1999
There was a profound silence from Vencor Inc. yesterday as the 5 p.m. deadline for the company to make an already late $ 18.5 million rent payment came and went.
Vencor and Ventas Extend Standstill and
Tolling Agreements
Company Press Release Monday May 10, 9:14 am Eastern
Time
LOUISVILLE, Ky.--(BUSINESS WIRE) --Vencor, Inc. (NYSE: VC - news) today announced that it did not pay the approximately $19 million in rent to Ventas, Inc. (NYSE: VTR - news) - - - -Although Ventas served Vencor with notices of non-payment under the Master Leases, the parties have since entered into further amendments of their prior Standstill and Tolling Agreements extending the time - - - - until June 6, 1999
Ventas says Vencor misses May rent
payment
(Reuters) Monday May 10, 1999
Vencor Fails to Pay May Rent; Parties
Continue Discussions
Business Wire May 10, 1999
A wise plan for nursing homes;
The Tampa Tribune May 10, 1999
The Louisville, Ky., company came under intense scrutiny last year after Tribune reporter Lindsay Peterson began writing about its attempts to evict 54 Medicaid residents from one of its Tampa homes. The company runs about 20 other homes statewide and several acute-care hospitals. - - - state regulators are preparing a plan to ensure that care in nursing homes is not affected if the companies go out of business.
Sun and Vencor Limp, but Will They Fall?
Sources Were Split on Long-term Care Cos' Ability to Come up with the
Cash
Mergers and Acquisitions Report May 10, 1999
Whether troubled long-term care companies Sun Healthcare Group, Inc. and Vencor Inc. make their coupon payments before their respective 30-day grace periods run out was the subject of debate among analysts last week."I don't think either company will make the payments," said a distressed analyst. Both have tremendous cash flow problems and are too highly leveraged to continue operating without restructuring even if they do make the coupons, he said.
Vencor rent deadline moved again Ventas
appears eager to avoid bankruptcy fight
The Courier-Journal (Louisville, KY.) May 11, 1999
Vencor Adjourns Annual Stockholders
Meeting
Business Wire May 12, 1999
Struggling Vencor to face shareholders
Year of problems hangs over today's annual meeting
The Courier-Journal (Louisville, KY.) May 12, 1999,
When Vencor shareholders approved management's plan to split the company in two at last year's annual meeting, most probably did not guess that they were drawing battle lines with the very survival of the newly separated firms at stake.-
----------------------------------
A year later, as Vencor shareholders prepare for this morning's annual meeting at the Seelbach Hilton Hotel, the company is behind on the rent to Ventas, has stopped paying the interest on $ 300 million in company notes and is in violation of the terms of another $ 800 million in credit.Vencor's dream of opening a gleaming tower headquarters on the riverfront as 2000 rings in has been abandoned, and the land and building plans are being sold.
Company officials have blamed Vencor's precipitous drop in fortune on a Medicare reimbursement system that took effect in July. When the company reported last month that it lost $ 651 million in 1998, it said that was largely because its earning power was sharply reduced by the Medicare changes.
But at the annual meeting on April 27 last year, Lunsford didn't seem to foresee the effects that he would later describe as draconian. In fact, he told shareholders that ''the changes long term in the Medicare system will be beneficial.''
VENCOR: CHAIR SAYS COMPANY WILL
SURVIVE
Health Line May 13, 1999
At a stockholders' meeting in Louisville yesterday that one shareholder characterized as gloomy, Vencor Inc. Chair Edward Kuntz said the company will survive the "disastrous last year."
Louisville, Ky.-Based Health-Care Provider
Holds Annual Meeting
LEXINGTON HERALD-LEADER May 13, 1999
http://www.kentuckyconnect.com/heraldleader
LOUISVILLE, Ky.-- Vencor Chairman Edward L. Kuntz tried yesterday to reassure stockholders at a packed annual meeting that the company will survive the disastrous last year.Despite the crowd, not enough shares were represented yesterday to vote on board candidates, and the meeting became a question-and-answer session.
In reply to questions, Kuntz placed much of the blame for the long-term-care company's difficulties on changes in Medicare reimbursement. He also said that dividing the company last year was a mistake.- - - - not all embraced Kuntz's reassurance that the company will stay afloat.-
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-While Kuntz emphasized that patients remain the primary focus of the company, many at the meeting were more interested in the condition of their finances.-
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-Kuntz, who would make no public comment on the matter, said Vencor is working with Ventas and the lenders to find a way out of nearly $ 1 billion in debt.
Ventas spinoff 'was not the right
decision' Vencor meeting lacks quorum; shareholders get few
answers
The Courier-Journal May 13, 1999
If Vencor Inc. shareholders were wondering what more could go wrong, they got a quick answer at the company's annual meeting yesterday when they were told no official business could be conducted because there wasn't a quorum present.-
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-But that didn't satisfy shareholders like Drew Smith, who complained afterward that "there were a lot of questions asked (but) few answers given." Other shareholders also were disappointed. James Trimpe, who is also a vice president of the investment firm Wheat First Union, noted that Kuntz was asked if there would be any money left for common shareholders after a possible restructuring or bankruptcy filing by Vencor -- "and the answer was no."
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"It appeared to me that he was very reluctant to make any statement that would indicate that this company is going to survive," Adams said. "I'm under the impression that without a change in the government payment system this company is gone."
Vencor Announces First Quarter Results
Company Press Release Friday May 14, 7:46 am Eastern
Time
Vencor's losses continue during first
quarter
The Associated Press State & Local Wire May 14,
1999
Vencor's losses continue during first
quarter
The Associated Press State & Local Wire May 14,
1999
Debt-ridden Vencor Inc.'s losses mounted during the first quarter, but the long-term health care company did see a gain in slumping revenues as it wrangles with problems threatening to sink it.-
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-Such improvement offers some glimmer of hope that Vencor can put together a restructuring plan to deal with its crushing debtload, said Charles Lynch, an analyst with Schroder & Co. Inc.
Ventas Reports First Quarter 1999 Results;
Ventas Will Not Pay Dividend in May
Business Wire May 14, 1999
Vencor stockholders seek answers from
executives
The Associated Press State & Local Wire May 17,
1999
VENCOR, SUN SKIP INTEREST PAYMENTS
Modern Healthcare May 17, 1999
Two national long-term-care chains skipped interest payments due early this month, prompting increased speculation about their fiscal health.Moody's Investors Service and Standard & Poor's downgraded credit ratings on Louisville, Ky.-based Vencor and Albuquerque-based Sun Healthcare Group last week to reflect a heightened likelihood of default, analysts from those companies said.-
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-Vencor's troubles may have their roots in an aggressive acquisition strategy, which it supported through massive borrowing. Among its 1997 acquisitions were the $616 million purchase of Transitional Hospitals Corp., a Las Vegas-based chain of about 20 long-term, acute-care hospitals, and the $359 million purchase of TheraTx, an Atlanta-based contract therapy services provider.-
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-Reacting to information that ''one, possibly two, large nursing home chains may be facing bankruptcy in the near future,'' Sen. Chuck Grassley (R-Iowa) two weeks ago introduced a bill he said would help smooth the transition for patients if their nursing homes declare bankruptcy.
CEO: Ventas will meet Vencor 'more than
halfway'
The Associated Press State & Local Wire May 18,
1999
Ventas Inc.'s president and chief executive officer told stockholders Tuesday the company will make concessions to keep its principal tenant, financially beleaguered Vencor Inc., afloat.With Louisville-based Vencor Inc. as Ventas' main source of revenue, Debra A. Cafaro said it was in the best interests of stockholders to keep Vencor operating.-
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-Ventas' properties include 45 hospitals, 219 nursing centers and eight personal care facilities operated in 36 states. Tuesday's annual meeting was its first as a separate company.Quotes from Shareholders:- "We're grasping at straws," he said. - - -- also weren't encouraged - - - blamed Vencor founder and former CEO Bruce Lunsford - - - "The sad part is we bought this for our grandchildren's educational fund,"
Ventas Shareholders Elect Directors
Business Wire May 18, 1999
May 18, 1999--At the annual meeting today of Ventas, Inc. (NYSE: VTR), shareholders reelected the following six directors to serve one-year terms: Walter F. Beran, Debra A. Cafaro, Douglas Crocker II, Ronald G. Geary, W. Bruce Lunsford and R. Gene Smith.
Vencor gets quorum on second try Annual
meeting sheds little light on future path
The Courier-Journal (Louisville, KY.) May 18, 1999
On a second try yesterday, Vencor Inc. succeeded in holding its annual meeting, but it had no better luck at appeasing disgruntled stockholders. There were some ''very unsatisfactory answers,'' stockholder Richard Oexmann said after the meeting.
VENCOR: MAY ATTEMPT RE-MERGER WITH
VENTAS
Health Line May 18, 1999
Vencor Inc. CEO Edward Kuntz told shareholders at a meeting yesterday that in light of the company's financial difficulties, he is considering re-merging with Ventas,
Ventas pledges help for Vencor;
Reunification won't happen, CEO asserts
The Courier-Journal (Louisville, KY.) May 19, 1999
Shareholders of Ventas Inc. were told yesterday that their company, which owns most of the nursing homes and hospitals operated by Vencor Inc., is working to help its struggling tenant, but has no intention of reuniting with Vencor as one company.
WASHINGTON AT WORK; Insider Bemoans What
He Wished For
The New York Times May 20, 1999
COMMENT:- When
large corporate groups have a problem they use their wealth to
influence the political process - even when they are
bankrupt
As Republican national chairman, Haley Barbour designed his party's campaign to cut the growth of Medicare. Now he has taken on a new assignment. As a lobbyist for a dozen large nursing home companies, he pleads with Congress for relief from the law he helped write.-
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-Mr. Barbour has not yet filed the required forms with Congress to disclose the amount spent lobbying for nursing homes on Capitol Hill. Asked how much he was being paid, he said, "Not enough," and laughed.The nursing home industry has long been a potent force in Washington and many state capitals. - - - -The industry's political action committee made campaign contributions of more than $900,000 in 1997-98, according to data filed with the Federal Election Commission and tabulated by Public Disclosure Inc., a nonpartisan research group.
MEDICARE: EX-RNC CHAIR DECRIES CUTS HE
ONCE CHAMPIONED
Health Line May 20, 1999
But last month, he (Barbour ) was retained by several nursing home companies -- including Sun Healthcare Group, Vencor Inc., the Mariner Post-Acute Network, Beverly Enterprises, HCR Manor Care Genesis Health Ventures and Extendicare Inc. - to push for greater reimbursements from the federal government.
BANK OF AMERICA BAILS ON VENCOR
Loan Market Week June 7, 1999
Administrative agent and co-arranger Bank of America has resigned from the steering committee for Vencor Inc.'s troubled $ 850 million credit and is looking for another bank to take over as administrative agent. Members of the bank group were shocked by "the massive vote of no confidence."
Vencor reaches agreement to make May rent
payments to Ventas
The Associated Press State & Local Wire June 8,
1999
Debt-ridden Vencor Inc. served notice to shareholders that their stock will likely have little value if the company is able to restructure its debt and rent obligation.Trading in the nursing home company's stock was suspended Monday on the New York Stock Exchange amid indications that an announcement is imminent on a possible restructuring of its $ 1 billion in debt. - - - - stock closed Friday at 63 cents per share.-
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-"It's fair to say that, while the mechanics of a reorganization are not known, the creditors will effectively control Vencor as part of making concessions on debt and lease obligations," said Frank G. Morgan of J.C. Bradford in Nashville, Tenn.In another development Monday, Vencor Inc. agreed to make nearly $ 19 million in rent payments due from May to its landlord, Ventas Inc.
Vencor restructuring seems near If company
issues stock to creditors, price will plunge
The Courier-Journal (Louisville, KY.) June 8, 1999
Kentucky-Based Long-Term-Care Provider
Negotiates Restructuring Pact
LEXINGTON HERALD-LEADER June 8, 1999
Troubled long-term-care provider Vencor is negotiating a restructuring agreement that will turn ownership of much of the Louisville-based company over to its creditors and leave stockholders out in the cold."Any such agreement is likely to result in existing Vencor stock having little if any value," said Edward L. Kuntz, the chairman and CEO, in a news release yesterday. - - - "The needs of the Vencor shareholders are certainly not on the table," Peters said. "There are a lot of people losing a lot of money way ahead of the shareholders."
Those people include the banks, the bondholders and, most of all, Ventas Inc., the real estate company spun off from Vencor last year to become its landlord.
VENCOR: MAKES AMENDS WITH VENTAS,
SHAREHOLDERS TO SUFFER
Health Line June 9, 1999
Strapped Vencor switches to
over-the-counter trading
The Courier-Journal (Louisville, KY.) June 11, 1999
Vencor Inc. stock, which no longer trades on the New York Stock Exchange, is trading over the counter under the symbol VCRI.The stock opened at 25 cents a share yesterday and closed at the same price,- - - The Louisville-based nursing-home company's stock had long traded on the New York Stock Exchange, but the company's recent financial troubles brought an end to that.
The exchange announced Tuesday that it was dropping Vencor because the company no longer meets certain minimum financial standards
Nursing homes hit hard by cuts in Medicare
pay
Business Dateline; Atlanta Business Chronicle July 9, 1999
COMMENT:- The
governments Medicare changes in 1997 were designed to eliminate
overservicing and fraud. They were probably excessive and
underestimated the extent to which most health care providers
depended on a proportion of Medicare residents to subsidise the
underfunded Medicaid system of payment. As a consequence all groups
felt the strain.
Those groups, whose prime goal was profits and who had actively discouraged Medicaid patients built empires and secured massive loans by exploiting Medicare's largesse. They were mortally wounded. Their financial instability is well illustrated by Vencor and Sun healthcare. Those not for profit groups which had copied the conduct of the chains in order to compete probably suffered more than their peers. These groups considered the Medicare cuts to be the cause of the problem - and not their commercial instability, focus on profit, and mismanagement.
To maximise profit the corporate chains had already (by 1994) cut staff and costs to the extent that the care provided was considerably worse than in the not for profit sector (Consumer Reports study 1994). Any further trimming was bound to result in a public backlash.
Last July, Fred Watson foretold the fate of some nursing homes in the state. The president of the Georgia Nursing Home Association predicted that changes in the way Medicare reimburses nursing homes would force some homes to scrape the bottom of the barrel to stay open.-
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-Yet, a year later, he is not surprised that one big publicly traded operator of nursing homes based in Atlanta is going bankrupt, and another has drastically cut its staff and is trying to find a new CEO - - - - Feeling the most pain are companies that depend heavily on Medicare, the federal health insurance program for acutely ill elderly, and must show shareholder value, Watson said.-
- - - Publicly traded, longterm-care providers in Georgia oversee about 150 facilities, or 40 percent of the state's nursing homes. About 56 hospitalbased nursing homes also were affected by the Medicare cutbacks, he said. - - - So, although the percentage of Medicare patients is small, nursing homes depend heavily on them for revenue, he said.
LOW SUN SALE STUNS TRADERS
Loan Market Week July 12, 1999
A two-point drop in Sun Healthcare bank debt surprised traders last week when GE Capital flipped a $ 25-30 million piece of the paper at 40-43 on July 2.- - - part of a $ 50 million health care bundle, which included Vencor Inc. and Ventas Realty bank debt.
Vencor prepared to auction its downtown
sites
Business Dateline; Business First-Louisville July 19,
1999
Ventas Will Not Pay Dividend in Third
Quarter
Business Wire, July 21, 1999
Vencor scraps plans, selling Westwood
property
Business Courier Serving Cincinnati - Northern Kentucky July 23,
1999
Vencor Inc., the troubled Louisville health care company, is selling the Westwood property it planned to convert to a long-term-care hospital.
Troubled Vencor pursues upgrades at local
hospital
Washington Business Journal July 23, 1999
Despite dire straits at the corporate level, Northern Virginia Community Hospital (NVCH) has forged ahead with renovations and new programs.
MONSTROUS PROBLEMS: MEDICARE'S NOT THE
ONLY BOGEYMAN HAUNTING THE LONG-TERM-CARE INDUSTRY
Modern Healthcare July 26, 1999
Before the PPS, companies such as Mariner, Sun and Vencor borrowed heavily to pay for acquisitions and other expansions. They also had historically high per-day Medicare revenues because they actively sought patients who were more difficult to treat and who could generate higher reimbursement, and they contracted to provide plenty of therapy to outside nursing homes. As long as Medicare revenues stayed high and contract therapy remained profitable, those companies could make good on their steep loan repayments.
Nursing home chains warn of possibility of
bankruptcy Sun Healthcare, Vencor say residents would face no
danger
The Dallas Morning News July 29, 1999, Thursday
Site for Vencor tower will go on auction
block
The Associated Press State & Local Wire July 30, 1999,
Friday,
Vencor Announces Extension of Bank
Waiver
Business Wire August 2, 1999, Monday
Aug. 2, 1999-- Vencor, Inc. today announced that its senior bank lenders have granted a further waiver, through August 27, 1999, of breaches by Vencor of certain financial covenants under its bank credit agreement ("Credit Agreement").
SLOW NEGOTIATIONS FORCE VENTAS LOWER
Loan Market Week August 2, 1999
Deutsche Bank last week picked up a $ 30 million chunk of Ventas Realty at 87 in an auction as the company's lengthy negotiations with Vencor Inc. sapped enthusiasm for the credit.
Vencor Announces Further Interim
Agreements With Ventas
Business Wire August 5, 1999, Thursday
Vencor, Ventas agree on payments
The Courier-Journal (Louisville, KY.) August 6, 1999,
Friday
Vencor reports operating losses for most
recent quarter
The Associated Press State & Local Wire August 13, 1999,
Friday, AM cycle
Revenues fell and debt grew at Vencor Inc. during the first half of 1999, a downward spiral that continued with a $ 15.2 million second-quarter operating loss reported Friday.The quarterly loss, amounting to 22 cents per share, was up sharply from a $ 4.7 million loss reported during the same quarter a year ago by the long-term health care company.
Vencor records loss of $ 40.8 million
Medicare cuts, reorganization, write-offs cited
The Courier-Journal (Louisville, KY.) August 14, 1999,
Saturday
The losses continued to mount for financially crippled nursing-home giant Vencor Inc. in this year's second quarter. The company announced yesterday that it lost $ 40.8 million, or 58 cents a share, for the three-month period that ended June 30.
Ventas reports says Chapter 11 expected
from Vencor
The Associated Press State & Local Wire August 17, 1999,
Tuesday,
The company that owns most of Vencor Inc.'s nursing homes and hospitals says it expects the beleaguered company to file Chapter 11 bankruptcy.
Ventas: Chapter 11 is likely for Vencor
Without creditor deal, a bankruptcy could hurt Ventas
The Courier-Journal (Louisville, KY.) August 17, 1999,
Tuesday
Ventas building up cash reserves
Business First-Louisville August 20, 1999
Rachael Kamuf; Eric Benmour
Ventas Inc. has built up cash reserves to continue meeting its own operating obligations should its major tenant, Vencor Inc., temporarily cease making rental payments in an expected bankruptcy proceeding.
Vencor Announces Extension of Bank
Waiver
Business Wire August 27, 1999, Friday
Vencor, Inc. today announced that its senior bank lenders have granted a further waiver, through September 24, 1999
Vencor Announces Further Interim
Agreements With Ventas
Business Wire September 7, 1999, Tuesday
VENCOR, INC. FILES FOR CHAPTER 11
PROTECTION; $100 MILLION - - - Debtor in Possession Financing
Secured; Normal Operations to Continue in All Facilities
(BUSINESS WIRE)--Sept. 13, 1999
LOUISVILLE, Vencor, Inc. today announced that it and several of its subsidiaries filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in Delaware.In announcing today's Chapter 11 filing, company management emphasized that the filing has been organized to permit normal operations of its nursing centers, hospitals, and ancillary services business.
Nursing Home Co. Vencor Files Ch.11
AP Online September 13, 1999; Monday
Vencor Inc., struggling under a mountain of debt and bad publicity, filed for bankruptcy Monday, the latest in a string of bad news for one of the nation's largest nursing chains.
Vencor, Inc. Files for Chapter 11
Protection; $ 100 Million Debtor in Possession Financing Secured;
Normal Operations to Continue in All Facilities
Business Wire September 13, 1999, Monday
Ventas Announcement On Vencor Bankruptcy
Filing
Business Wire September 13, 1999, Monday
There can be no assurance as to what effect the Vencor bankruptcy will have on Ventas. We expect Vencor's major creditors to support an expedited restructuring process.
Ventas, Inc. Announces Agreements in
Principle Among Major Creditors to Restructure Vencor, Inc.;
Contemplated Deal Designed To Improve Tenant's Credit Profile
Business Wire September 14, 1999, Tuesday
Vencor plans no shutdowns; Ailing company
to keep its nursing homes open
The Boston Globe September 15, 1999, Wednesday
Vencor Inc., one of the biggest operators of nursing homes in the country with 38 facilities in Massachusetts, has told state officials it plans to keep its homes open despite the fact that the Louisville, Ky., company filed for bankruptcy court protection on Monday.
Vencor Receives Approval of First-day
Orders in Connection With Restructuring Under Chapter 11; Vencor and
Ventas Reach Agreement Regarding Rent Payments During
Restructuring
Business Wire September 15, 1999,
Vencor, Inc. (the "Company") today announced that the United States Bankruptcy Court for the District of Delaware (the "Court") entered first day orders granting authority to the Company and its subsidiaries to pay pre-petition and post-petition employee wages, salaries, benefits and other employee obligations. The Court also approved orders granting authority, among other things, to pay pre-petition claims of certain critical vendors, utilities and patient obligations.
Vencor may pay Plan could give creditors
control, - - debts with stock wipe out investors
The Courier-Journal (Louisville, KY.) September 15,
1999,
Creditors of Vencor Inc. reportedly are discussing a plan in which they would forgive much of the financially troubled health-care company's $ 1.4 billion debt in exchange for all of the company's stock.In return for forgiving debts, banks would own 56 percent of a restructured Vencor, and holders of company notes and Vencor's landlord would own the rest, if parties agreed and a bankruptcy judge approved.-
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-'' Vencor shareholders are going to end up with no equity if you add up (what the creditors are getting),'' said John Roberts, analyst at Hilliard- Lyons in Louisville. ''It comes to 100 percent, so that would leave zero for current Vencor shareholders.''In a bankruptcy, shareholders have very few rights, Roberts said.
Experts Question Need To Restore Cuts In
Medicare
National Journal's CongressDaily September 15, 1999
Time
Members of the House Commerce Health and Environment Subcommittee today made it clear that Congress needs to move quickly on legislation to restore some of the Medicare cuts imposed as part of the 1997 Balanced Budget Act, but they faced resistance from expert witnesses-
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-Policy analysts tried their best to caution Congress against major changes - noting that - - - -, it may be due as much to decreased fraud and abuse and other factors as to Medicare reductions.
Failed Nursing Home Giant Seen as
Health-Care Herald; Vencor Bankruptcy May Set Precedents
The American Banker September 17, 1999, Friday
Lenders to the battered long-term health-care industry will be watching Vencor Inc. closely over the next few months as the Louisville, Ky.-based nursing home operator tries to sort out its debt woes.
Nursing-Home Bailout Debated --
Congressmen Question Proposal To Increase Medicare Payments
Albuquerque Journal September 18, 1999, Saturday
COMMENT:- This
article debates the issue of whether Medicare changes or fraud and
mismanagement precipitated the problems. The different positions of
the various advocates is given in the full article. Note that the not
for profits consider the new Medicare payments to be
adequate.
WASHINGTON -- Some key members of Congress and an association that represents nonprofit nursing homes are concerned about a bill to help bail out the financially troubled nursing-home industry.The legislation sponsored by Sen. Orrin Hatch, R-Utah, and backed by New Mexico Sens. Pete Domenici and Jeff Bingaman would cost an estimated $5 billion over five years.
Nursing homes with large numbers of residents who need rehabilitation therapy would benefit the most from the bill, and the large, for-profit chains have focused on attracting such residents in recent years.-
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-"Despite industry charges to the contrary, payment rates are likely to provide sufficient, or even generous, compensation for providers," an official with Congress' General Accounting Office told a House committee Wednesday.The GAO official said some Medicare fixed rates may need to be increased but others may need to be lowered to better reflect care costs.
The nursing-home industry is pushing hard for congressional relief.
The industry has reported hundreds of millions of dollars in losses and has laid off tens of thousands of workers in recent months. One national chain, Vencor of Louisville, Ky., has filed for bankruptcy reorganization and another, Sun Healthcare Group of Albuquerque, has said it is considering such a move.
The industry blames reduced Medicare reimbursements for its troubles.-
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-But some government data and studies show Medicare's current rates for beneficiaries in need of rehabilitation therapy are adequate and possibly even too high.-
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-The American Association of Homes and Services for the Aging, which represents nonprofit nursing homes, wants the Hatch bill changed to put more of a focus on nontherapy rates.
Northup attacks Medicare curbs Letter to
Clinton cites a 'crisis' for care, providers
The Courier-Journal (Louisville, KY.) September 24, 1999,
Friday
Changes in the way the federal government reimburses health-care providers has led to ''an impending crisis'' in nursing-home care, and ''major companies are facing financial disaster,'' U.S. Rep. Anne Northup and 180 Congressional colleagues charge in a letter to the Clinton administration.The letter comes one week after Vencor, a Louisville-based long-term care company, filed for Chapter 11 bankruptcy. The company cites the government's reimbursement changes as a major reason for its difficulty.
A PPS FOR SKILLED NURSING? IT LOOKED GOOD
AT THE TIME
Modern Healthcare September 27, 1999
Vencor pinned much of the blame for its bankruptcy filing earlier this month (Sept. 20, p. 6) on Medicare's prospective payment system for skilled-nursing facilities. But it wasn't too long ago that the Louisville, Ky.-based nursing home chain was bullish on the PPS.In an April 1998 - - - Vencor told shareholders that the system ''will benefit nursing center operations'' through higher payments and the company's ability to reduce costs on its ancillary services. In August 1998, after several weeks of operating under the PPS, the company was still standing by its prediction of profitability, qualifying it only with ''in the long term.'' By November, the company had replaced ''will benefit'' with ''may benefit.''
LEADERS REVERSE COURSE ON CUTS; MEDICARE
TRIMS MAY BE RESTORED;
The Times-Picayune September 29, 1999 Wednesday
COMMENT:- This
response to the problem created by Vencor and Sun is interesting.
There is no mention of the crimes committed by these corporations -
all long before the 1997 changes. The government recognises it can't
manage and control a corporatised health system. Instead of changing
the system they want to butt out and give the market open slather.
This is exactly what Andrew Turner wanted them to do in
1996.
Writing about the marketplace ideology Kuttner indicated that, for true believers, when the market does not work this can only be because it is not marketlike enough. When you can't stop the fox from stealing the chickens you give the chickens to the fox.
With angry senior citizens and health-care workers storming Capitol Hill to complain about Medicare payments, lawmakers are tripping over themselves to restore cuts that they set in motion two years ago.Although trumpeted in 1997 as a long-overdue attack on waste in a bloated federal program, many in Congress now criticize the severity of the cuts as a misguided, penny-pinching move that is putting sick, low-income elderly people at risk.
That sea change in attitude has prompted dozens of bills designed to restore financing to nursing homes, hospitals, home health-care agencies and other caregivers in a wave of congressional backpedaling that could top $20 billion.-
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-"This is a classic example of trying to micromanage a huge program in every minute detail," Sen. John Breaux, D-La., said. "Cuts are made and you come back the next year and try to correct them, and then the next year you cut again and correct them the year after that. That's what happens when Congress micromanages down to the price of an aspirin or visit to the hospital. It doesn't make sense in the modern world."Breaux has called for radical changes in the $230 billion-a-year health program that would let marketplace competition set prices, with the government only subsidizing the premium
Ailing from government cuts, nursing homes
a risky buy
USA TODAY September 30, 1999, Thursday,
Despite bargain prices, buying nursing home stocks right now is akin to extreme sports: Only serious risk takers should consider it, analysts say."We're not recommending any shares right now," says John Ransom, an industry analyst with Raymond James.
Vencor Receiv