NO LOVE AT HAZELDEN-BETTY FORD FOUNDATION

NO LOVE AT HAZELDEN-BETTY FORD FOUNDATION

It is amazing that in the midst of a government-declared opioid crisis and rampant substance abuse that one of the nation’s premier addition treatment providers reduced their headcount by 57employees. Citing a reduction in self-paid admissions and reduced reimbursement rates from insurers, management also cited cash-flow issues arising from the implementation of their new electronic health record system. It appears that it may not be the patient record portion of the system that is causing problems, but the modules associated with payment submission and processing. The foundation’s size is relatively small, compared with general medical service providers. According to management, there was a loss of $10.1 million in the first three quarters; as measured against $135 million in revenue. This certainly looks like an attractive acquisition target for any well-run health provider that can benefit from their storied name.

NO LOVE AT TENET HEALTHCARE (UpdateD)

(January 9, 2018) It appears that Tenet is planning to lay off 2,000 workers, up from the 1,300 positions it said it originally planned to cut. The goal is to reduce annual costs by $250 million, $100 million more than originally publicized. 

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Tenet has filed an SEC 8K (Report of unscheduled material events or corporate change) in which “the Company anticipates eliminating approximately 1,300 positions, including contractors” as part of a $150 million cost reduction initiative. The cost reductions will be “comprised primarily of headcount reductions and the renegotiation of contracts with suppliers and vendors.” Approximately 75 percent of the savings are expected to be achieved through actions within the Company’s Hospital Operations and other segments, including the elimination of a regional management layer and streamlining corporate overhead and centralized support functions. Tenet also expects to realize savings from actions within the Company’s Ambulatory Care and Conifer business segments.

The company has posted a $366 million net loss from continuing operations (for the Third Quarter of 2017) The reasons for the shortfall include “lower revenues and higher expenses related to Hurricanes Harvey and Irma and $10 million of lower-than-anticipated revenues from the Texas Medicaid Waiver and Florida Medicaid programs.”

Management changes continue and a new well-credentialed, well-experienced, high-powered Board member, James Bierman, joins the team. 

NO LOVE AT PACIFIC ALLIANCE MEDICAL CENTER

Many medical centers are not financially or physically healthy. The Pacific Alliance Medical Center which operates the historic French Hospital in Los Angeles has announced that it will lay off all of the hospital’s 638 employees as it winds down the facilities 150-year history. PAMC, which suffered a first fiscal quarter operating loss of only $12.2 million, cannot afford the earthquake seismic retrofits mandated by the State of California. The real issue is the land underlying the facility which is not owned by the hospital. PAMC is unwilling to invest approximately $100 million to tear-down and re-build a medical center on land it does not own. And, the property owner seems reluctant to sell. Considering that Los Angeles is home to a number of world-class hospitals (UCLA, Cedars Sinai, St. Johns, USC Keck) and their multitudinous clinic outposts and labs, the community is not at further risk and most employees may be able to secure employment in the local area.

A little history from the Hospital’s website …

PAMC has a rich history that dates back to the days when Los Angeles was no more than a small dusty agricultural community with a population of 1,500. In 1860, The French Society was founded as a pre-paid health plan for newly arrived French citizens. The Society soon realized that the growing French community needed a hospital. In 1869, it constructed the French Hospital at the corner of College and Hill Street, making it Los Angeles’ first hospital. That hospital is now known as Pacific Alliance Medical Center. The landmark Joan of Arc statue still stands today on our front lawn as a proud reminder of this period in our city's history.
By the 1900s, the once predominate French community welcomed Chinese immigrants working in the railroads and agriculture. The area became known as Chinatown. In 1989, the founding board members of PAMC took a substantial risk and purchased the French Hospital from the French Benevolent Association as part of their commitment to maintaining a full-service hospital in the Chinatown community. Their vision and generosity has allowed PAMC to flourish and serve local residents that now number close to 2 million.