Hospital builder HBE Corp. ceases taking new clients
In an unusual sequence of events, the St. Louis Business Journal reported Friday that HBE Corp., a St. Louis company working in construction of health care facilities, would cease operations. Joseph Lehrer, who was named HBE’s president and CEO last year, declined to comment for the story, but majority owner, chairman and former president and CEO Fred Kummer weighed in Monday with a carefully worded letter of response. The company isn’t closing, Kummer said, but will stop taking on new clients going forward.
Kummer specified that the company will continue working on its current hospitals in California; the company’s website lists nine ongoing projects currently in that state, in addition to locations in almost every other state. In his letter, Kummer pinned the decision on “the very real changes that the current administration in Washington has brought about in healthcare,” but offered no clarification. More developments seem likely in the days ahead.
Allegro sells five properties
St. Louis-based Allegro, a company that owns and manages senior living facilities, sold five properties in Florida and Kentucky to American Realty Capital Healthcare Trust II Inc. The five facilities sold for a total cost of $172.5 million before closing costs; one, the Allegro Abacoa in Jupiter, Fla., sold for $51.75 million. For Allegro, the sale reportedly will mean an influx of funds with which to build new facilities, though the company has not yet specified where those will go.
Omega Healthcare buys Aviv
Maryland-based Omega Healthcare will purchase Aviv REIT, a rival real estate investment trust based in Chicago, in an all-stock deal worth $3 billion. Combined, the companies operate 874 health care facilities in 41 states, including 20 in Missouri. Omega has not yet announced what its consolidation plan will mean for staffing at its hospitals in Missouri or elsewhere, if it means anything at all. The deal is expected to close by the end of March.
Reading the Chart
Several major health care companies across Missouri have reported their third-quarter earnings in recent days. Among the most healthy were managed-care provider Centene, which saw a 69 percent jump in profits after membership rose 42 percent year over year; and Express Scripts, the St. Louis-based pharmacy benefits management company, which grew its net income by 36 percent over last year despite filling 4 percent fewer prescriptions and having to cut more than 1,800 staffers earlier this year. On the ailing end of the spectrum was nutritional supplement company Reliv, based in Chesterfield, which endured a 13.5 percent drop in net sales resulting in profits plummeting 43 percent compared to the same quarter last year.
Quote of the Week
“Our nation’s health care tab has increased 20,000 percent over three generations, yet our care remains highly variable in quality and safety. It is impelled forward, with ever escalating costs, by those who feed at the $2.8 trillion health care trough.”
— John Leifer, former University of Kansas professor, health care analyst and author of the book “The Myths of Modern Medicine,” in an email interview with the Kansas City Star. Leifer, who worked in the health care industry for 30 years in strategic and policy roles, also described the present-day health care system as profit-driven, “desperately broken” and “incapable of stemming the rising tide of chronic illness in our population.”
Tweet of the Week
— Governor Jay Nixon (@GovJayNixon) November 4, 2014
Of course, Nixon is talking about Cerner’s Three Trails campus, the $4.45 billion project scheduled to break ground Nov. 12 at 3 p.m. and tentatively scheduled for completion in 2016. Job creation is a good way to get the governor’s Twitter attention.
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