Hedges their bets

As I am from Seattle I am aware of the conglomerate that is now Providence Hospital Systems.  The below article again demonstrates why I am not cheering, sending donations, or actually giving a shit about health care providers at this time.  My experience not withstanding has only once again been confirmed as it would be sorely misplaced empathy and I have none to spare.

Providence has been investigated by the DOJ, and earlier this year as a pandemic was already brewing in the Northwest, threatened to lock out Nurses, has a very conflicting venture interest in pathology labs which has we know is a major issue in testing in the current climate. Its Swedish Hospital is riddled with complaints and problems and the Attorney General eventually began an investigation.  And had a massive layoff of over 600 regarding money, gee what?

I could Google Cleveland Clinic and am pretty confident I would find similar tales of woe but then I have been to Cleveland and it sits pretty in a city struggling to make it work and this is what led to Nashville’s rebirth, Med and Ed.  The same with Pittsburgh.  The ACA was very very good to hospitals.

I am not sure what more I can say but see, I told you so.  The images of workers lacking PPE and the stories of endless shortages of equipment relates to the poorly funded public hospitals, here in NYC, Warren Buffett paid for a private plane to acquire said masks.  It was Cedars that requested the gay bashing Good Samaritan tent to set up in a public park to handle overflow, but I suspect that was a diversion to take the uninsured and needy and keep their pristine halls clear and clean.  So what is the cheering about and the free meals for?

Wealthiest Hospitals Got Billions in Bailout for Struggling Health Providers

Twenty large chains received more than $5 billion in federal grants even while sitting on more than $100 billion in cash.

By Jesse Drucker, Jessica Silver-Greenberg and Sarah Kliff
The New York Times
May 25, 2020

A multibillion-dollar institution in the Seattle area invests in hedge funds, runs a pair of venture capital funds and works with elite private equity firms like the Carlyle Group.

But it is not just another deep-pocketed investor hunting for high returns. It is the Providence Health System, one of the country’s largest and richest hospital chains. It is sitting on nearly $12 billion in cash, which it invests, Wall Street-style, in a good year generating more than $1 billion in profits.

And this spring, Providence received at least $509 million in government funds, one of many wealthy beneficiaries of a federal program that is supposed to prevent health care providers from capsizing during the coronavirus pandemic.

With states restricting hospitals from performing elective surgery and other nonessential services, their revenue has shriveled. The Department of Health and Human Services has disbursed $72 billion in grants since April to hospitals and other health care providers through the bailout program, which was part of the CARES Act economic stimulus package. The department plans to eventually distribute more than $100 billion more.

So far, the riches are flowing in large part to hospitals that had already built up deep financial reserves to help them withstand an economic storm. Smaller, poorer hospitals are receiving tiny amounts of federal aid by comparison.

Twenty large recipients, including Providence, have received a total of more than $5 billion in recent weeks, according to an analysis of federal data by Good Jobs First, a research group. Those hospital chains were already sitting on more than $108 billion in cash, according to regulatory filings and the bond-rating firms S&P Global and Fitch. A Providence spokeswoman said the grants helped make up for losses from the coronavirus.

Those cash piles come from a mix of sources: no-strings-attached private donations, income from investments with hedge funds and private equity firms, and any profits from treating patients. Some chains, like Providence, also run their own venture-capital firms to invest their cash in cutting-edge start-ups. The investment portfolios often generate billions of dollars in annual profits, dwarfing what the hospitals earn from serving patients.

Many of these hospital groups, including Providence, are set up as nonprofits, which generally don’t have to pay federal taxes on their billions of dollars of income.

By contrast, hospitals that serve low-income patients often have only enough cash on hand to finance a few weeks of their operations.

After the CARES Act was passed in March, hospital industry lobbyists reached out to senior Health and Human Services officials to discuss how the money would be distributed.

Representatives of the American Hospital Association, a lobbying group for the country’s largest hospitals, communicated with Alex M. Azar II, the department secretary, and Eric Hargan, the deputy secretary overseeing the funds, said Tom Nickels, a lobbyist for the group. Chip Kahn, president of the Federation of American Hospitals, which lobbies on behalf of for-profit hospitals, said he, too, had frequent discussions with the agency.

The department then devised formulas to quickly dispense tens of billions of dollars to thousands of hospitals — and those formulas favored large, wealthy institutions.
ImageAfter the CARES Act passed, hospital industry lobbyists reached out to senior Health and Human Services officials, including Secretary Alex M. Azar II, to discuss how the money would be distributed.

One formula based allotments on how much money a hospital collected from Medicare last year. Another was based on a hospital’s revenue. While Health and Human Services also created separate pots of funding for rural hospitals and those hit especially hard by the coronavirus, the department did not take into account each hospital’s existing financial resources.

“This simple formula used the data we had on hand at that time to get relief funds to the largest number of health care facilities and providers as quickly as possible,” said Caitlin B. Oakley, a spokeswoman for the department. “While other approaches were considered, these would have taken much longer to implement.”

Hospitals that serve a greater proportion of wealthier, privately insured patients got twice as much relief as those focused on low-income patients with Medicaid or no coverage at all, according to a study this month by the Kaiser Family Foundation.

“If you ever hear a hospital complaining they don’t have enough money, see if they have a venture fund,” said Niall Brennan, president of the nonprofit Health Care Cost Institute and a former senior Medicare official. “If you’ve got play money, you’re fine.”

In a letter this month to the Department of Health and Human Services, two House committee chairmen said the Trump administration appeared to be disregarding Congress’s intent in how it was distributing the aid.

“The level of funding appears to be completely disconnected from need,” wrote the two Democrats, Representatives Frank Pallone Jr. of New Jersey and Richard E. Neal of Massachusetts.

It is the latest instance in which enormous and hastily enacted federal bailout programs have benefited those who don’t appear to need the money. A package of $170 billion in federal tax breaks, for example, will go overwhelmingly to many of the country’s richest people and biggest companies. A program to rescue small businesses initially directed hundreds of millions of dollars in loans to publicly traded companies while many smaller firms were frozen out.

That pattern is repeating in the hospital rescue program.

For example, HCA Healthcare and Tenet Healthcare — publicly traded chains with billions of dollars in reserves and large credit lines from banks — together received more than $1.5 billion in federal funds.

An HCA spokesman said the aid didn’t cover the expected lost revenue and higher expenses caused by the coronavirus, while a Tenet spokeswoman said the pandemic had suppressed the company’s profits.

The Cleveland Clinic got $199 million. Last year it had so much money on hand — its $7 billion in cash helped generate $1.2 billion in investment profits — that it paid investment advisers $28 million to manage the fortune.

Angela Kiska, a Cleveland Clinic spokeswoman, said the federal grants had “helped to partially offset the significant losses in operating revenue due to Covid-19, while we continue to provide care to patients in our communities.” The Cleveland Clinic sent caregivers to hospitals in Detroit and New York as they were flooded with coronavirus patients, she added.

The St. Louis-based Ascension Health, which operates 150 hospitals nationwide, has received at least $211 million from Health and Human Services. The company, with $15.5 billion in cash, operates a venture capital fund and an investment advisory firm that helps other companies manage their money.

Even if Ascension stopped generating any revenue whatsoever — a doomsday scenario — it would have enough cash to fully operate for nearly eight months.

Nick Ragone, a spokesman for Ascension, said the federal funds “facilitated our ability to serve our communities during this unprecedented time.” He said Ascension had not furloughed or laid off any workers and wouldn’t do so for “as long as possible.”

Critics argue that hospitals with vast financial resources should not be getting federal funds. “If you accumulated $18 billion and you are a not-for-profit hospital system, what’s it for if other than a reserve for an emergency?” said Dr. Robert Berenson, a physician and a health policy analyst for the Urban Institute, a Washington research group.

Hospitals that serve poorer patients typically have thinner reserves to draw on.

Even before the coronavirus, roughly 400 hospitals in rural America were at risk of closing, said Alan Morgan, the chief executive of the National Rural Hospital Association. On average, the country’s 2,000 rural hospitals had enough cash to keep their doors open for 30 days.

Many hospitals that primarily serve low-income people have received federal grants that their executives say may not be enough to see them through the current crisis.

At St. Claire HealthCare, the largest rural hospital system in eastern Kentucky, the number of surgeries dropped 88 percent during the pandemic — depriving the hospital of a crucial revenue source. Looking to stanch the financial damage, it furloughed employees and canceled some vendor contracts. The $3 million the hospital received from the federal government in April will cover two weeks of payroll, said Donald H. Lloyd II, the health system’s chief executive.

“This is just a Band-Aid,” Mr. Lloyd said.

The Harris Health System, which operates two hospitals in Houston, treats mostly uninsured patients. In a good year, it has a 1 percent profit margin, said Dr. Esmaeil Porsa, its chief executive.

The system has lost about $43 million in patient revenue during the pandemic, Dr. Porsa said. So far, it has received about a quarter of that in federal grants. It is unclear how it will make up the shortfall.

“I know there are hospitals out there that have some God-awful amount of money in reserve,” Dr. Porsa said. “We are not that, and we will never be that. Whatever cash we have we’re going to pour into services.”

That is not how things work at the Providence Health System, which in some ways resembles a Silicon Valley powerhouse as much as a health care company. Providence owns 51 hospitals, including Swedish Medical Center in Seattle, and 1,100 clinics in California, Texas and others states.

Even with the federal grants, Providence lost $179 million in April, said Melissa Tizon, a company spokeswoman. She said the bailout money has helped the company avoid laying off staff or reducing their pay, although Providence has furloughed workers and told some staff to expect pay cuts beginning in July.

“Remember, the pandemic isn’t over,” Ms. Tizon said. “We need to be financially stable for the next possible wave.”

But Providence’s financial stability does not appear to be in jeopardy.

The hospital network has nearly $12 billion in cash reserves. It has invested that money in hedge funds, private equity firms and real estate ventures.

It also oversees two venture capital funds that manage about $300 million on behalf of the health care chain. The venture funds do deals alongside some of the country’s highest-profile investment firms, including Kleiner Perkins and Carlyle.

Last year, Providence’s portfolio of investments generated about $1.3 billion in profits, far exceeding the profits from its hospital operations. Like other nonprofits, Providence generally does not owe federal taxes on its earnings.

In 2018, Providence paid its chief executive, Dr. Rod Hochman, more than $10 million.

That would be enough to finance about a month of operations at the St. Claire hospitals in Kentucky.

Doctor Do Little

Below are several articles about Nashville’s health care industry and to say they are not healthy are an understatement.

Music City in between drawing Conventions and Bachelorsluts is largely a health care city.  Vanderbilt combing the Hospital (a entity of its own) and the University is the largest employer and then the hospitality trade, Ryman Group, are also large players and in turn so is Nissan and Bridgestone for what it is worth are in the top 10.  The varying hotels and businesses that cater to hospitality are of course the most significant under-liar in the core of employees and we have seen that industry take a huge hit of furloughs and layoffs.  Only Las Vegas tops the list of that area followed by the larger tourism capitals which includes New York and New Orleans.   There is no counting across the country about that particular industry and how bad it is hit now and will be coming forward.

But the medical industry deserves special attention as that is largely the main contributor to the white collar industry that makes an economy diverse and is used to attract the like so in this case as Nashville tried to once again pivot and reinvent itself it was that business that gives a pretty face to the truths, that it is a city of largely young, ill educated and poorly trained workforce.  But by adding the data from the medical and the legal field (again it is state capital and that inflates those numbers artificially as well) it gives a higher median income in which to present a nice package of lies.  And no one lies like a Southerner.

Two are filing for Bankruptcy, one has furloughed staff, a CEO has taken pay cuts and one is selling off hospitals to meet analysts needs.

Again we have had a problem with regards to medical care for decades, from the vulture capitalists buying up practices and hospitals, to the closing of rural facilities and lastly public funding for public health has all lead up to this – a shit storm.

The crisis in public health can be told in this story from the New York Times from a public hospital in Ground Zero of the pandemic.  Just yesterday a Doctor from New York who contracted Covid after treating patients decided to end her life.  So as I watched Doctors and other “front line”workers comment and share their grief one comment stood out: “I did not sign up for this.” Well bitch, yes you did.  When you entered the medical profession that oath “First Do No Harm” was one you took and yet repeatedly over the years we have heard one horror story over another about the failures of the medical system to protect and not do harm. The endless stories of fraud and malfeasance over Medicaid and Medicare are like legionnaires disease.  Or did you know that Medical Malpractice is the third highest cause of death in the nation?  So now you are in the middle of a major pandemic.  When did you not learn or know of these as they have been happening in this lifetime we just have been lucky – until now.

So again I am not out applauding, go funding or giving one flying fuck about their well being as they have proven time and time again they selectively do so using factors as age, gender, wealth and color to make the life and death panel decisions and are doing so now.  We will never get true and accurate numbers about any of this let alone from hospitals about what is going on there.  They were run for profit and run now into the ground by a storm that makes an F4 (gotta love the F) Tornado seem like a stiff breeze.

Tennessee home of the industry Core Civic that runs prisons and are Corvid outbreaks vs the other kind and of course the Life Care Centers old folks homes that one was ground zero in Kirkland, Washington; their numbers are spread all over the country.   Tennessee is a right to work state that prohibits unionization, collective bargaining, they have incredible OSHA issues on a normal basis, but now especially with Covid, and they have massive other problems that they ignore or simply lie about (all of which I have written about extensively on this blog).  Their own Nashville General Hospital in Nashville had its own controversies and issues  much like the one in the story from New York and this is the same in Harborview Medical Center in Seattle.  Until this massive storm hit we just thought its all good as it ain’t happening to me.  Well in some way even if you did not contract Covid you caught the side effects.

We did this, we need to fix this, we need a single payer health plan and we need to fund health care across the board fairly and equitably and in turn follow that with education.  Private money can go fuck itself when it comes to the greater good.  And this is neither great nor good.

So as you glance at the finances I think we can see how we got here on a slow moving bus across a train track and the train is coming. Bottom line is that money spent on health care needs, fully staffing, training, have necessary equipment and of course allocation for emergent situations are not available to the masses and why the red tape and bureaucracy made this worse. Well we were asleep at the wheel and Jesus was already driving the bus.

Report: Another massive Nashville health care company considers bankruptcy

A second Nashville health care company this month could be headed for Chapter 11.

Envision Healthcare Corp. has hired restructuring advisers and is considering filing for bankruptcy, according to a Bloomberg report. The company is struggling financially as government regulations banning elective surgeries due to COVID-19 in most states have left Envision with few options to manage its $7 billion of debt, according to “people with knowledge of the matter.”

Envision was bought by private investment firm KKR for $9.9 billion in 2018. At the time, Envision was Middle Tennessee’s third-largest publicly traded health care company, with $7.8 billion of revenue in 2017. The company employs more than 25,000 clinicians in 45 states.

Envision is led by President and CEO Jim Rechtin, who was appointed to the job in February, just days before the COVID-19 crisis took hold in the U.S. He replaced long-time CEO Chris Holden.

Envision did not immediately respond to a request for comment.

Envision has experienced a significant decrease in patient volume during the pandemic, across all practices and specialties, according to a news release earlier this month, with decreases as high as 70% in anesthesia services and ambulatory surgery. Despite the influx of COVID-19 patients in certain areas of the country, emergency department visits are down 30% overall.

To counter those headwinds, Envision’s senior leadership team took temporary 50% salary cuts. Non-clinical employees have also seen temporary salary reductions as well as furloughs; in areas where patient volumes are low, clinical compensations were also be reduced.

In addition, performance bonuses, clinician profit sharing, retirement contributions, merit increases and promotions were temporarily suspended for all employees.

Envision has hired law firm Kirkland & Ellis LLP to advise the company of its restructuring options, including a potential Chapter 11 filing, according to the report. The sources said the situation could change depending on the length of the shutdown of elective surgeries and market conditions.

Envision’s debt has been trading at low levels, according to the report, with $1.23 billion of bonds due in 2026 trading for 30 cents on the dollar last week. The company’s lenders have hired their own advisers to negotiate with the company, according to the report.

Earlier this month, Brentwood-based Quorum Health Corp. filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. As part of the filing, Quorum and its lenders entered into a restructuring support agreement, or RSA, featuring a “pre packaged” plan to reduce the company’s debt by $500 million and recapitalize the business.

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Nearly five years after being spun out of Community Health Systems Inc., Brentwood-based Quorum Health Corp. has filed for Chapter 11 bankruptcy.

The filing was made Tuesday in the U.S. Bankruptcy Court for the District of Delaware, according to a news release. As part of the filing, Quorum and its lenders have entered into a restructuring support agreement, or RSA, featuring a “pre packaged” plan to reduce the company’s debt by $500 million and recapitalize the business.

Quorum and its hospitals will remain open and employees will continue to get paid, according to the release.

“We believe the financial restructuring plan announced today will strengthen our business and enable our community hospitals to continue the important work they are doing in addressing the COVID-19 crisis, as well as serve their patients and communities,” Quorum CEO Bob Fish said in the release.“Quorum Health has been transparent about the need to restructure our debt over the past year. We believe the RSA will significantly reduce our debt and annual interest expense and better position our company, our affiliated hospitals, and our hospital management and consulting company, for future growth. The RSA will also build on the significant progress we have made to strengthen our operations. We are grateful for the support of our financial stakeholders, which we believe represents a statement of confidence in our business and enables us to move through this process on an expedited basis.”

Quorum (Nasdaq: QHC), which has 12,000 employees and was spun out of CHS in 2015, is one of Nashville’s 10 largest publicly traded health care companies, according to Nashville Business Journal research, with $1.8 billion of revenue in 2018. The company has yet to file its 2019 earnings report.

The 24-hospital company has struggled financially over the past 18 months, fighting to buoy its share price as it sells hospitals to pay off debt. The company has received three delisting warnings from the New York Stock Exchange in the past year due to the company’s share price trading at less than $1 over a consecutive 30-day trading period and because its average market capitalization was less than $50 million over a consecutive 30 trading-day period.

Shares of Quorum were trading at 30 cents per share Tuesday morning, giving the company a market cap of $10 million.

Quorum had been considering a proposed recapitalization and buy-out of its public stock at $1 per share from private equity giant KKR, which owns more than 9% of Quorum’s outstanding shares and is the largest holder of its debt.

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Nashville health care stocks are taking a beating from COVID-19.

HCA Healthcare Inc.’s stock price has lost nearly half if its value since its 2020 high of $151.04 per share, dropping 48.7%, to close at $77.46 per share Tuesday. Shares of HCA haven’t traded that low since November 2017.

HCA is not alone as stocks across industries have plummeted in recent days due to fears and precautions taken to slow the spread of coronavirus across the U.S. On Monday, the Dow Jones dropped 12.9%, its worst percentage drop since 1987, while the S&P 500 dropped 11.9% and the Nasdaq fell 12.3 %.

Many of the companies inside Nashville’s $46.7 billion health care industry are on the front lines of efforts to stop the spread of the virus and care for patients who fall ill from COVID-19.

HCA (NYSE: HCA) is the nation’s largest hospital operator, with more than 180 hospitals and 2,000 sites of care. Brookdale Senior living Inc. (NYSE: BKD), whose residents are particularly vulnerable to COVID-19, is the nation’s largest senior-living community operator, with more than 750 facilities in 45 states.

The List
Largest Public Health Care Companies in Nashville
Ranked by Revenue 2018
Rank Name Revenue 2018
1 HCA Healthcare Inc. $46.68 billion
2 Community Health Systems Inc. $14.15 billion
3 Brookdale Senior Living Inc. $4.53 billion

Brookdale’ stock price has also been hit hard due to COVID-19, dropping more than 76% from its 2020 high of $8.39 per share, to close at $1.99 per share Tuesday.

A little more than a month ago, SmileDirectClub’s (Nasdaq: SDC) stock was trading at $15.33 per share. The company’s stock closed Tuesday at $4.89 per share, a 68% drop.

Acadia Healthcare Company Inc. (Nasdaq: ACHC), Community Health Systems Inc. (NYSE: CYH), Change Healthcare Inc. (Nasdaq: CHNG) and Quorum Healthcare Corp. (NYSE: QHC) have all seen their share prices drop by more than 50% from their 2020 highs.

While analysts expect most stocks across industries to eventually recover their losses, no one is sure how long the bear market will last.

“I’m buying a lot of things including bank stocks, although I own a lot of banks. I do think it’s an opportunity. I think we’re likely to have a recession, but I think it’s going to be V-shaped. This is all about the virus,” former Wells Fargo CEO Richard Kovacevich said in a CNBC report. “I mean, we’re talking about markets and so forth, but job No. 1 is we have to get this virus under control. We know how to do it. Other countries have done it. And it can be solved relatively quickly. [There] may be a lot of disruptions in our lives to do that, quarantines and so forth, but this is not a financial crisis. It’s not a banking crisis. It’s a health crisis.”

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Franklin-based Community Health Systems Inc. is selling a trio of Southern hospitals.

CHS has agreed to sell the 231-bed Abilene Regional Medical Center in Abilene, Texas, and 188-bed Brownwood Regional Medical Center in Brownwood, Texas, to Hendrick Health System, according to a news release.

CHS has also agreed to sell its 84‑bed St. Cloud Regional Medical Center in St. Cloud, Florida, to Orlando Health, according to a separate news release. Orlando Health already held a minority ownership interest in the medical center and will purchase the remaining portion through the deal. Terms for both deals were not disclosed.

CHS (NYSE: CYH) is Nashville’s second-largest publicly traded health care company, with $13.2 billion of revenue in 2019. The company has closed, sold or agreed to sell more than 90 hospitals since 2017 to pay off debt incurred as a result of its $7.6 billion purchase of Florida-based Health Management Associates in 2014.

Tennessee hospitals, many of which were struggling prior to the Covid-19 pandemic, are losing approximately $1 billion per month during the crisis, according an analysis conducted by the Tennessee Hospital Association.

The state’s hospitals typically generate $1.7 billion of revenue per month, according to a news release.

Last month, Gov. Bill Lee banned elective surgeries at health care facilities across Tennessee in an effort to conserve dwindling medical supplies. Those surgeries, such as knee replacements, typically have higher margins than other medical procedures.

“Tennessee hospitals have taken all of the appropriate steps to conserve resources and create capacity for COVID-19 patients,” THA President and CEO Dr. Wendy Long (who is a member of Lee’s Covid-19 task force) said in the release. “These facilities have maintained expensive operations in preparation for and to serve Covid-19 patients while experiencing a dramatic drop in volume and services that typically comprise their core business. This creates a paradox of hospitals experiencing severe financial strain when their services are most needed.”

Across Tennessee, hospitals have had to adjust to the decrease in revenue, with several systems such as Williamson Medical Center furloughing workers due to reduced patient visits.

In early April, Nashville-Based HCA Healthcare Inc., the nation’s largest hospital operator, announced its senior leadership would take a 30% pay cut until the pandemic subsides to avoid layoffs, with CEO Sam Hazen donating the next two months of his salary to HCA’s charitable fund. Last week, Boomberg reported than Nashville-based Envision Healthcare is considering several options, including bankruptcy, as it struggles with decreases as high as 70% in anesthesia services and ambulatory surgery.

“In 2018, 71 hospitals in Tennessee had operating margins that were 2% or below, and 60 had zero or negative operating margins,” Dr. Long added. “It doesn’t take a pandemic to stress the system, and Covid-19 has made the situation much more difficult for many of our hospitals.”

The state has deployed $10 million to help rural hospitals survive the pandemic. The federal CARES Act has more than $100 billion reserved to help the hospital industry, although it is not clear how much of that will go toward Tennessee hospitals.

During its first quarter earnings call last week, HCA said it expected to receive approximately $4 billion in accelerated Medicare payments thanks to the CARES Act.

“Recent funding opportunities for hospitals that are being made available at the federal and state levels are very much appreciated lifelines to this vital industry,” Long said in the release. “However, the reality is the impact is so massive that more assistance will be needed in order to ensure continuity of operations at hospitals and provide a necessary level of care. Now more than ever, Tennesseans need their hospitals to remain open and caring for their community.”