[This article was posted last month in the Nashville Biz Journal, but just recently became available to non-print subscribers. Thought you might find it interesting reading...]
Nashville Business Journal - August 3, 2007
Following a poor second quarter showing that stunned Wall Street, LifePoint Hospitals Inc. is planning a handful of corporate changes to whip its performance back into shape.
Brentwood-based LifePoint (NASDAQ: LPNT) reported earnings 38 cents per share below analyst expectations on July 23, bringing in net income of $13.4 million, or 23 cents per diluted share - down 62 percent from the second quarter of 2006. An average of analysts' estimates projected the company would earn 61 cents per share.
"This caught everyone by surprise," says Robert Hawkins, analyst with Stifel Nicolaus & Co. "It just made people kind-of shake their heads in disbelief and make them wonder can these guys operate these hospitals."
William Carpenter, LifePoint president and CEO, says the company isn't satisfied with its second quarter results, either - which were hurt by bad debt, higher medical malpractice insurance expenses and contract labor costs and professional fees - and it is "executing strategies that we know will improve our performance."
The company has given three of its most senior executives - Joné Koford, Scott Raplee and Mike Weichart - the responsibilities of heading up initiatives to focus on growth, improving operational performance and levering up a value-added corporate center, Carpenter says.
"These are things we've always been focused on, but they're things we recognize needed additional attention in order to be very successful over the long term," Carpenter says. "So we are devoting additional resources to those areas in order to deal with the industry trends we've been seeing."
Koford is president of LifePoint's American division, Raplee is senior vice president, operations CFO and Weichart is president, national division.
Each of the three executives will get a chief operating officer to assist his efforts, and LifePoint will add a chief medical officer to focus on clinical quality.
The company will continue to work on other initiatives to improve results - including comprehensive risk management assessments at hospitals with the highest frequency and severity claims, a premium credit risk reduction program for all hospitals, and targeted programs to minimize incidents and claims in the most frequent risk areas, the company said on the earnings call.
Whit Mayo, analyst with Stephens Inc., says he expects these changes to take longer than a quarter to have an impact.
LifePoint lowered its earnings guidance following the announcement. It expects to report $21.5 to $2.25 per share for the year on revenue of $2.63 billion to $2.65 billion. The company previously predicted earnings of $2.42 to $2.52 per share on revenue of $2.68 billion to $2.69 billion.
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LifePoint names chief medical officer
Nashville Business Journal - August 22, 2007
LifePoint Hospitals Inc. has named Dr. Lanny Copeland its chief medical officer, a newly created position for the Brentwood-based hospital company.
Copeland has served as vice president, medical affairs, for Triad Hospitals for the past six years. He reports directly to LifePoint Chief Operating Officer Bill Gracey.
The chief medical officer position is one of several corporate posts recently created by the company to improve its performance after a disappointing second quarter.
LifePoint (NASDAQ: LPNT) provides health care services in non-urban communities through its 49 hospitals.
That makes alot of sense. Hire more top level executives with six figure salaries to figure out why they are losing money. Heres a suggestion: Hire more staff, re-implement programs that you cut, and quit using million dollar consultants to answer questions you are suppose to be able to figure out on your own. More staff will mean better care, thus, less lawsuits thereby lowering malpractice insurance. Hire more staff and treat them with honesty and respect, give them decent wages, and good benefits and they will stay, thereby reducing the need for travelers. Re-implementing programs that were cut means more services which in turn brings back more patients. Finally, consultants tell you things you should already know. I am not just talking about the situation at Danville, any Lifepoint hospital could be grouped into this situation. Any more suggestions?
What an incredible summary! Precisely why I walked away from my career after 20 years with DRMC. The "LifePoint" way of business is ethically and morally disgusting!
Could not agree with you more. That is why I no longer work there.
It is an infectious dump of arrogance and slime. They should be put out of business--and WILL BE sooner or later.
Check the latest stock price for LPNT....it closed today at 27.62. That's after hitting a 52-week low of 27.57.
http://www.thestreet.com/_yahoo/
newsanalysis/healthcare/10377439.
html
As a stockholder, I find it disgusting that they keep pouring money into this dung-heap of a hospital in a dung-heap of a town. We should cut and run. It will neer work.
So, as a stockholder, you should vote with your pocketbook. Simply pull your money from this underperformer and put it into another for-profit hospital corporation.
Oh...wait...
Yeah, I guess each of the players in this sector has their own "dung-heap" to deal with.
Hopefully you didn't buy when it was at 40. Then I could understand your angst.
From an article on thestreet.com on 7/30:
"Of course, Gurda's positive outlook has already backfired once this earnings season. Notably, Gurda predicted that LifePoint Hospitals (LPNT - Cramer's Take - Stockpickr - Rating) would meet the high end of its second-quarter earnings guidance and then raise its forecast for the entire year. Instead, LifePoint did just the opposite -- weathering a spectacular miss -- and saw its stock plummet to a new 52-week low as a result.
LifePoint shares, down 1.5% to $29.63 on Monday, have lost one-quarter of their value in the past two months alone. But CRT Capital analyst Sheryl Skolnick, who labeled LifePoint's latest quarter a "disaster," feels the stock got the hit that it deserved.
Indeed, Skolnick foresees even more bad news for the company ahead.
"LPNT's management acknowledged that its bad debt problem, its physician and nurse labor cost problems and the unexpected increase in its malpractice expense are problems that are not likely to be solved quickly," Skolnick stressed when blasting the company in a research report earlier this month. "Further, management couldn't explain why so many little things hit the company the quarter after the CFO resigned."
Thus, she added, "we wonder if LPNT management -- as it is not viewed as being too strong to begin with -- really has a handle on the dynamics of its business." "
http://www.thestreet.com/s/
community-health-mum-on-
guidance/newsanalysis/healthcare
/10371141.html?puc=_tscs
To the stockholder:
News to you, bro. We were a hospital that MADE money. Lifepoint came in and took our assets and distributed them to their other hospitals. They took top notch computer systems and replaced them with a marginally functional one. We were nationally applauded for our work. Now we are nationally recognized as being a poor performer. They pillaged our hospital while we stood helpless to act. And you have the audacity to say they should quit dumping money into our hospital???? PuhLEASE!!!! What a moron!
Perhaps Mr. Carpenter could realize the saddening effect of raging war for something he thought was of value, and found that it was not really there. QUALITY HEALTHCARE.
Often times efforts of just throwing money into upper and middle management can become fruitless, or a battle for the wrong reasons-resulting in a large dark lurking sadness. Americans shouldn't have to pay for these mistakes to the extent that they have in the past.
Once he has waged these battles he should surely see his errors, and reverse his courses of action by allocating more funds to staffing. It would be so much better for all of Lifepoint's patients if he could find more reasonable and logical Answers sooner.
It seems that many of Lifepoint's Hospitals need more hearty atmospheric improvements if they want to continue in business. The elements are currently lacking for this to happen.
lifepoint = Greed, not care for the community.
We know this and it is well documented and people are dead now because of their take from the staff give to the rich mentality.
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