Hospital chain declares bankruptcy

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This is just the Hahnemann closure at scale. The end result was inevitable once the MPT deal happened.
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nimbus said:
www.azag.gov

Attorney General Mayes Announces Investigation into Steward Health Care’s Bankruptcy

PHOENIX – In response to Steward Health Care’s bankruptcy filing in a Texas bankruptcy court on May 6, 2024, and news of its planned auction of four Arizona hospitals, Attorney General Kris Mayes announced that she is opening an investigation into the circumstances leading up to Steward Health...
www.azag.gov www.azag.gov
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Be curious to see where that goes. I imagine Mass is not far behind.
 
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One of my good friends is the CFO of a PE firm. They have 3 or 4 multibillion dollar portfolios. All they care about is 1. Sucking all the life out of a broken company as they dismantle it. Or 2. Rebuilding and rebranding failing companies to suck profits out of them before selling them for a profit. Or 3. Investing in good companies that are mismanaged so they can suck all the profits out of them as they take them to the next level, and then sell them for a big profit.
At least they’re privately owned, though the investors want their profits. What they did during Covid was pretty cold. And no F’s were given. People fired, no rents ever paid, walking away from some companies all together and dumping them on the bank as a loss, after selling off everything of any value of course. The whole company is a widget to them. Employees aren’t a consideration at all, they’re a line item on a balance sheet.
 
IlDestriero said:
One of my good friends is the CFO of a PE firm. They have 3 or 4 multibillion dollar portfolios. All they care about is 1. Sucking all the life out of a broken company as they dismantle it. Or 2. Rebuilding and rebranding failing companies to suck profits out of them before selling them for a profit. Or 3. Investing in good companies that are mismanaged so they can suck all the profits out of them as they take them to the next level, and then sell them for a big profit.
At least they’re privately owned, though the investors want their profits. What they did during Covid was pretty cold. And no F’s were given. People fired, no rents ever paid, walking away from some companies all together and dumping them on the bank as a loss, after selling off everything of any value of course. The whole company is a widget to them. Employees aren’t a consideration at all, they’re a line item on a balance sheet.
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Sounds like organized crime out of a fancy office with fancy letterhead.
 
IlDestriero said:
One of my good friends is the CFO of a PE firm. They have 3 or 4 multibillion dollar portfolios. All they care about is 1. Sucking all the life out of a broken company as they dismantle it. Or 2. Rebuilding and rebranding failing companies to suck profits out of them before selling them for a profit. Or 3. Investing in good companies that are mismanaged so they can suck all the profits out of them as they take them to the next level, and then sell them for a big profit.
At least they’re privately owned, though the investors want their profits. What they did during Covid was pretty cold. And no F’s were given. People fired, no rents ever paid, walking away from some companies all together and dumping them on the bank as a loss, after selling off everything of any value of course. The whole company is a widget to them. Employees aren’t a consideration at all, they’re a line item on a balance sheet.
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And you like this person? This CFO? Because if he has the pull of a CFO and makes some big financial decisions for his company he sounds like a total Sociopath.
Cold like you said.
 
makemoney2024 said:
And you like this person? This CFO? Because if he has the pull of a CFO and makes some big financial decisions for his company he sounds like a total Sociopath.
Cold like you said.
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Sure, in 1. The company is broken and going to the scrap heap/fire sale either way. Sometimes they take chances on companies and try to turn them around but can’t. Then it’s time to change to plan A. Get some money back out and take the L. He doesn’t buy them healthy and break them, like the healthcare examples we know. In 2 and 3 they add value by fixing poor business plans and the wrong leadership. Those companies grow and survive better than ever.
It’s interesting how differently corporate finance people see things compared to healthcare people or even healthcare executives. Which of course is exactly the problem with PE getting into the healthcare space. There was a discussion a few years back about PE buying a failing Philadelphia hospital, bankrupting and closing it with minimal notice when they couldn’t turn it around, after making minimal effort to really do so. The justification for the investment was that they could flip the real estate to developers and get their money back. Thats how they think. An inner city hospital caring for the most at risk was bought with the back up plan of turning it into condos and street level retail. The staff and patients are just an inconvenience, like drug addicts squatting in an abandoned warehouse you own waiting for gentrification.
 
IlDestriero said:
One of my good friends is the CFO of a PE firm. They have 3 or 4 multibillion dollar portfolios. All they care about is 1. Sucking all the life out of a broken company as they dismantle it. Or 2. Rebuilding and rebranding failing companies to suck profits out of them before selling them for a profit. Or 3. Investing in good companies that are mismanaged so they can suck all the profits out of them as they take them to the next level, and then sell them for a big profit.
At least they’re privately owned, though the investors want their profits. What they did during Covid was pretty cold. And no F’s were given. People fired, no rents ever paid, walking away from some companies all together and dumping them on the bank as a loss, after selling off everything of any value of course. The whole company is a widget to them. Employees aren’t a consideration at all, they’re a line item on a balance sheet.
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Yep have a friend in PE who was talking about the steps they were taking to suck all the profits out of the healthcare entity they bought and then turned to me and was like so can I buy your group? We can maximize your efficiency and improve things.
 
GassYous said:
Yep have a friend in PE who was talking about the steps they were taking to suck all the profits out of the healthcare entity they bought and then turned to me and was like so can I buy your group? We can maximize your efficiency and improve things.
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I hope you gave him two middle fingers. These people.
 
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It’s like toys r us bankruptcy dealings

The executives just push the can down the road with debt. Executives (and pe) don’t care. They collect their money.

Kkr did the same thing to Envison. Got their 20% fees for closing the deal.

The job of private equity isn’t to maintain day to day activities. It’s collect those fees and get the heck out of dodge before anything happens

Thats why the 3 year clawback laws failed and died in congress because private equity lobbying made those laws stoped.
 
ambiturner said:

This just gets uglier
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Disgusting.

And they want to blame the healthcare workers for why healthcare is expensive, while they secretly pulled out 800 million and let the hospitals burn.

This is also why being a “partner” of an AMC with “shares” is a silly concept. The money is all being sucked out secretly. It’s all part of the private equity playbook where they gaslight the blissfully ignorant underlings and use their licenses as a conduit for wealth transfer - away from patients and into PE pockets.
 
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GassYous said:
Yep have a friend in PE who was talking about the steps they were taking to suck all the profits out of the healthcare entity they bought and then turned to me and was like so can I buy your group? We can maximize your efficiency and improve things.
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In a 2009 article in Rolling Stone magazine, for which he is a contributing editor, he described Goldman Sachs as: “a giant vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”.

Substitute PE for Goldman Sachs. The sad part is that while we justifiably hate them, part of us wants to be them.
 
kidthor said:
Disgusting.

And they want to blame the healthcare workers for why healthcare is expensive, while they secretly pulled out 800 million and let the hospitals burn.

This is also why being a “partner” of an AMC with “shares” is a silly concept. The money is all being sucked out secretly. It’s all part of the private equity playbook where they gaslight the blissfully ignorant underlings and use their licenses as a conduit for wealth transfer - away from patients and into PE pockets.
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That’s why the FTC needs to win and destroy USAP in Texas.
 
centdoc said:
That’s why the FTC needs to win and destroy USAP in Texas.
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Don’t u think destroying the hospital monopoly is a better use of taxpayer money?

Orlando health is big in central Florida along with advent Health. They are 10x worse than usap. Those two hospitals rape the insurance companies way worst than usap does in Texas or Florida.

Think of Orlando health as Donald trump. And usap as Kamela Harris. You will like usap better than what Orlando health does in Florida. Advent maybe worst. They are like Joe Biden. Claim to be nice people but corrupt as well.

Orlando health is buying 3 of these bankrupt hospitals and will just use them as a tax write off and shut it down. One of the hospitals is over 80 years old and in desperate need of being just torn down and rebuilt.
 
aneftp said:
Think of Orlando health as Donald trump. And usap as Kamela Harris. You will like usap better than what Orlando health does in Florida. Advent maybe worst. They are like Joe Biden. Claim to be nice people but corrupt as well.
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Who is RFK Jr in this scenario?
 
Regardless. You guys don’t see the big picture. It’s not just usap. There is so much hate for usap. I kinda of feel sorry for many of the docs who invested their hard work into the company.

But target your anger toward the hospitals because their facilities fees keep going up under Obamacare while physician fees keep going down. So the only way to make for decreasing fees is either to get larger with mergers like usap. Or beg for money from hospitals.

Hospitals keep getting more in facility fees regardless if they are efficient or not. Plus they buy more distress hospitals and demand even more as their market share increases.
 
aneftp said:
Don’t u think destroying the hospital monopoly is a better use of taxpayer money?

Orlando health is big in central Florida along with advent Health. They are 10x worse than usap. Those two hospitals rape the insurance companies way worst than usap does in Texas or Florida.

Think of Orlando health as Donald trump. And usap as Kamela Harris. You will like usap better than what Orlando health does in Florida. Advent maybe worst. They are like Joe Biden. Claim to be nice people but corrupt as well.

Orlando health is buying 3 of these bankrupt hospitals and will just use them as a tax write off and shut it down. One of the hospitals is over 80 years old and in desperate need of being just torn down and rebuilt.
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The fastest way for non-usap anesthesiologists to make more $$$ is for usap to disappear (or shrink). Then the hospitals will have to pay up to keep the ORs open. Sure, if the hospital monopolies were broken that would be good to bring down overall costs for patients, but that won’t help us make more $$$.
 
centdoc said:
That’s why the FTC needs to win and destroy USAP in Texas.
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What’s disappointing in that lawsuit is that Welsh Carson was dismissed from the suit - and they’re the true apex bad actors. USAP, problematic as it is, wouldn’t function as it does without the manipulation from Welsh Carson. Sadly with dismissing PE backers from the suit it almost continues to support their playbook of sucking money out as an abstract actor while letting the parts (USAP) implode. The brilliance of the FTC suit was to include PE as the antitrust target, but their legal basis is overbroad and a bit vague, especially in light of the recent overturning of Chevron.
 
kidthor said:
What’s disappointing in that lawsuit is that Welsh Carson was dismissed from the suit - and they’re the true apex bad actors. USAP, problematic as it is, wouldn’t function as it does without the manipulation from Welsh Carson. Sadly with dismissing PE backers from the suit it almost continues to support their playbook of sucking money out as an abstract actor while letting the parts (USAP) implode. The brilliance of the FTC suit was to include PE as the antitrust target, but their legal basis is overbroad and a bit vague, especially in light of the recent overturning of Chevron.
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Welsh Carson has already made their 20% cut already way back in 2014 and the deal was brokered.

They always planned on ipo 3 later as previously discussed numerous times.

They don’t care about the 20% operating expenses that flows back to them because as any private equity person will tell you. It’s about IBG. Aka. I’ll be gone by the time the deal closes.

They don’t want any liabilities by managing day to day anesthesia operations even with 20% cut.

It’s hard to take a 20% cut if no operating profits
20% cut and risk that liability.
 
Then why don’t they broker a deal to sell some off ? Or just declare bankruptcy and jet. Or negotiate to split up to statisfy the ftc. They must still be making $ or they would sell or jet
 
amyl said:
Then why don’t they broker a deal to sell some off ? Or just declare bankruptcy and jet. Or negotiate to split up to statisfy the ftc. They must still be making $ or they would sell or jet
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I agree. I suspect PE is still making money from USAP from “management fees” or high interest rate loans they’ve saddled onto them. It very well may also be a cash flowing business even if it has financial problems.
 
kidthor said:
I agree. I suspect PE is still making money from USAP from “management fees” or high interest rate loans they’ve saddled onto them. It very well may also be a cash flowing business even if it has financial problems.
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They don’t want the money because of the liabilities that goes managing the practice.

That’s why the courts already sided with usap welsh Carson absolving them of true control of the company. Welsh Carson doesn’t want to have to do anything with the company besides selling it
 
That’s true - I don’t doubt it…. I’m sure they want out. They’ve just been calling audibles and running the plays as they come since 2017. What I don’t understand is why don’t they stop wasting money on the ftc lawsuit and let the ftc break them up. Sell the practices to hospitals or Northstar or just walk away.
 
amyl said:
Then why don’t they broker a deal to sell some off ? Or just declare bankruptcy and jet. Or negotiate to split up to statisfy the ftc. They must still be making $ or they would sell or jet
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With increasing anesthesia labor costs and decreasing anesthesia reimbursements, there is really nothing left to sell off.
 
kidthor said:
I agree. I suspect PE is still making money from USAP from “management fees” or high interest rate loans they’ve saddled onto them. It very well may also be a cash flowing business even if it has financial problems.
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If it has positive cash flow now, I don’t think that will last long.
 
Donate it to charity for a tax deduction. My shares are worth $10 million. That’s what they told me anyway.
 
Paywalled but it’s worth $1 to read the story. Anybody have first-hand experience with a Steward facility?

apps.bostonglobe.com

Steward Health News: Practice of neglect led to indignity, death

On the whole, Steward’s more than 30 hospitals have been among the worst, the most troubled in the country over the last five years, according to several measures.
apps.bostonglobe.com apps.bostonglobe.com

Edit:

This part is straight out of the Red Lobster playbook.

“In 2016, Steward struck a company-defining $1.25 billion deal with Medical Properties Trust, a Birmingham, Ala., real estate investment trust. Steward would go on to sell its hospital land and buildings to MPT, and then lease the hospitals back, under a new “asset light” philosophy that purported to free up cash for hospitals to re-invest. This model, instead, adroitly converted physical assets into huge payouts for Steward’s owners and their investors, while saddling community hospitals with massive rent payments.“
 
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nimbus said:
Paywalled but it’s worth $1 to read the story. Anybody have first-hand experience with a Steward facility?

apps.bostonglobe.com

Steward Health News: Practice of neglect led to indignity, death

On the whole, Steward’s more than 30 hospitals have been among the worst, the most troubled in the country over the last five years, according to several measures.
apps.bostonglobe.com apps.bostonglobe.com
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Imagine the worst HCA facility you can.

And remember that the HCA facility probably never had the IR supplies repossessed.

That vile.
 
nimbus said:
If it has positive cash flow now, I don’t think that will last long.
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Just a replay of mednax American anesthesiology with usap.

The end is near. You are only as good as your cash flow. Although usap is being taken down by labor cost. Mednax payor mix changed a lot over the years in many of their previous most profitable places

I’ve said it time again. Charlotte atrium/southeast anesthesia practice falling was mednax’s end.

If Dallas , Houston or Orlando fall, it’s end of usap. Those are their true money makers.
 
USAP Houston just bought out the small anesthesia group that does my cases. I don’t think they’re concerned about the FTC lawsuit at all. I wonder if the owner decided to sell now to make sure he can actually get some $ before it goes to trial.
 
Agast said:
He bought himself a new lambo
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People usually don’t “buy lambo”. It’s a 50k down payment than a monthly lease of $2000 a month for 2 years. Depending on the buy back price in 2 years. You may owe more money. That was a few years ago how my buddy customized his yellow Lamborghini.

Price may be more now.
 
Agast said:
USAP Houston just bought out the small anesthesia group that does my cases. I don’t think they’re concerned about the FTC lawsuit at all. I wonder if the owner decided to sell now to make sure he can actually get some $ before it goes to trial.
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That’s excellent if they can get some money buyout being a small practice. That’s the first buyout I have heard of in a while. Probably the cost of business to rehire more people at more expensive recruiting costs.
 
aneftp said:
That’s excellent if they can get some money buyout being a small practice. That’s the first buyout I have heard of in a while. Probably the cost of business to rehire more people at more expensive recruiting costs.
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There hasn’t been a buyout in years in Houston which is why I don’t think this happened.
 
nycitygas said:
There hasn’t been a buyout in years in Houston which is why I don’t think this happened.
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Usually the practice will lose the contract anyways. And it’s a retention deal to stay on for at least 2 years. Almost like those 100k sign on bonus you see these days for 2 years.

I’m sure they got at least 250k each to stay on for x amount of time. Buyout or whatever. They got something. And something is better than nothing

Still cheaper to retain those docs than recruit new people.
 
aneftp said:
Usually the practice will lose the contract anyways. And it’s a retention deal to stay on for at least 2 years. Almost like those 100k sign on bonus you see these days for 2 years.

I’m sure they got at least 250k each to stay on for x amount of time. Buyout or whatever. They got something. And something is better than nothing

Still cheaper to retain those docs than recruit new people.
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True but why would usap buy the practice then? Especially with all the on going issues. This isn’t 2018.
 
nycitygas said:
There hasn’t been a buyout in years in Houston which is why I don’t think this happened.
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? It definitely happened. Employees had to sign new contracts with USAP. It’s a four-room ASC and probably not a blip on anyone’s radar, but we’re north of Houston.
 
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Agast said:
? It definitely happened. Employees had to sign new contracts with USAP. It’s a four-room ASC and probably not a blip on anyone’s radar, but we’re north of Houston.
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This is amazing news

In Florida usap is dumping ASCs left and right n even ones with good payor mix.

Even at the height of usap powers in 2015. Usap stole my friends surgery center contract for anesthesia services

So in 2024. Usap has decided it’s better to buyout a surgery center contract north of Houston. The Houston market must be the strongest USAP stronghold than.

Or the anesthesia contract comes with an ASC facility fees portion. That’s where the money is. Not the anesthesia contract. But the facility fees
 
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