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February 2008 issue
System With Varied Assets Focuses On LTC--
Benedictine Health System Reorganizes, Sheds Acute Care Operation
Since January, Benedictine Health System has focused only on long-term care;
its acute care interests have been moved to a new subsidiary of Essentia
Health.
...
Reinvent
Your CCRC To Remain Competitive--
The Evergreens Embarks On Its Second “Reinvention” In 10 Years
In its second “reinvention” in 10
years, The Evergreens in Moorestown, New Jersey, is focusing on services and
relationships, not bricks and mortar.
...
Q&A With Robyn Stone
Robyn Stone, Dr. P. H., executive
director of the Institute for the Future of Aging Services, talks about the
workforce crisis facing senior care providers.
...
Recent Not-For-Profit Transactions
and Sales
We detail some deals that closed in
the last few weeks.
....
Emerging Trends and How They
Impact the Senior Market
Focus on these 10 areas of concern, based on emerging trends, when
considering a repositioning project.
...
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Companies Mentioned in this issue:
February 2008
Symbols
3i Group p11
A
Abingworth Management p11
Accentia p15
Access Pharmaceuticals p15
Accuro Healthcare Solutions p4
Adept Technology p7
Advancis p12
Advantage Capital p11
AgeChem Venture Fund p10
Aisling Capital p10
Akela Pharma p3
Alder Biopharmaceuticals p10
Allscripts Healthcare p7
Alta Partners p10
Amelia Trace p8
American Capital p10
AppTec Laboratory p7
Aragon Surgical p10
Aravis Ventures p3
Arbor Surgical Technologies p11
ARCH Venture Partners p3
Arcion Therapeutics p11
Ardea Biosciences p4
Ark Therapeutics p7
Artes Medical p12
Ascension Orthopedics p11
Aspen BioPharma p4
Associates p10
AthenaHealth p4
Avalon Laboratories p10
B
Bay City Capital p10
Bayhill Therapeutics p3
Benvenue Medical p11
BG Medicine p3
Biodel p4
BioSpecifics Technologies p15
Bridge Laboratories p11
Brooke Private Equity p11
BTF B.V. p10
C
CafeScribe p16
Calistoga Pharmaceuticals p11
Caprotec Bioanalytics p11
Cardiovascular Systems, Inc. p3
Cardium Therapeutics p15
Cellectar p11
CellzDirect p7
Cerebellum Automation p7
Channel Medical Partners p11
Chengdu Tianyin Pharmaceutical p14
Children’s Hospital of Pittsburgh at UPMC p16
CHL Medical Partners p14
Circassia p11
Citi p3
Clarus Ventures p11
Clinipace p11, p12
CMEA Partners p11
CMEA Ventures p3
CMS p7
CoGenesys p7
Confirma p11
Cowen Group p12
Cowen Healthcare Royalty Partners p12
Creadev p10
Creathor Venture p11
CyberHeart p11
D
De Novo Ventures p3
Deerfield Management p12
Delphi Ventures p10
Deutsche Bank Securities p3
E
Elekta p7
Eli Lilly and Company p3
Emergent Growth Fund p12
Emergent Medical Ventures p11
Empire Asset Management p15
Endeavour Vision p10
Endotis Pharma p10
EnzySurge p11
Extended Care p7
F
Fidelity Asia Ventures p11
Fidelity Biosciences p10, p11
FinTech Laboratories p7
Flagship Venture Partners p11
Fluke Venture Partners p11
Follica p11
Food and Drug Administration p16
Frazier Healthcare Ventures p11
Frontier Capital p11
G
Galpharm Healthcare p7
Gelesis p11
Genizon BioSciences p10
Goldman, Sachs p11
Gottlieb Memorial Hospital p8
H
H. Lundbeck A/S p7
H.I.G. Ventures p10
Hatteras Venture Partners p11
Health-E-tips p16
Heidelberg Innovation p11
Heraeus Holding p7
I
IBB Beteiligungsgesellschaft p11
ImmuneRegen Biosciences p15
Inclinix p11
InnerCool Therapies p15
Integral Capital Partners p10
Intel Capital p10
InterWest Partners p11
Invesco Perpetual p11
Invitrogen p7
IonGate Biosciences p11
J
JW Medical Systems p7
K
Kearny Venture Partners p10
KfW p11
Kleiner Perkins Caufield & Byers p10
Knopp Neurosciences p11
Kramer Capital Partners p11
KRC Research p16
KV Pharmaceutical p7
L
Latterell Venture Partners p3
Lazard Capital Markets p3
Leerink Swann p3
Lifecore Biomedical p7
Lincoln Funds p11
Loyola p8
Lymphatix Oy p7
M
MAKO Surgical p4
MC Life Science Ventures p10
MedeFile p15
Medtronic p11
MiddleBrook Pharmaceuticals p12
Mohr Davidow Ventures p10
Montreux Equity Partners p3
Morgan Stanley p3
MPM Capital p11
N
National HealthCare p8
Needham & Company p3
New Enterprise Associates p11, p15
NIF SMBC Ventures p10
North American Scientific p14
NovaMed p8
NovaMed Pharmaceuticals p11, p12
Nura p3
Nymox Pharmaceutical p14
O
Odyssey HealthCare p8
Omeros Corporation p3
ONSET Ventures p10
OrbiMed Advisors p10, p11
Orexigen p3
P
Pacific Growth Equities p3
Par Pharmaceutical p7
Paul Capital p12
Paul Royalty Funds p12
Peptimmune p11
Pervasis Therapeutics p11
Pfizer p7
Pharmos p15
Phenomix p4
Polaris Venture Partners p11
Pomeroy Health p8
Primera Biosystems p11
ProtAffin Biotechnologie p11
Psilos Group p10
Public Citizen p16
PureTech Ventures p11
R
Raygere p14
Renaissance p8
Rexahn p15
Rigel Pharmaceuticals p3
Rodman and Renshaw p14
rontier Capital p11
Royal Senior Care p8
RxElite p7
S
Saturn Partners p11
Scale Venture Partners p10
Seattle Genetics p3
Senexis p11
Sepracor p7
Seventure Partners p10
Sevin Rosen Funds p10
SF Capital Partners p14
Sinovac Biotech p15
Sofinnova Partners p10
Sonexa Therapeutics p10
St. Mary’s Holston Health p8
STAAR Surgical p4
Stanley Medical Research Institute p3
Sterling at Aventura p8
Susan G. Komen for the Cure p16
Susan G. Komen for the Cure Advocacy Alliance p16
SV Life Sciences p11
Synecor p11
Synovis p7
T
Targacept p3
Telegraph Hill Partners p11
Tempo Pharmaceuticals p11
Tethys Bioscience p10
Teva Pharmaceutical p7
The Buying Group p8
The Entrepreneurs Fund p11
The Perrigo Company p7
Three Arch Partners p11, p14
Tissue Repair Company p15
Titan Pharmaceuticals p4
TransEnterix p11
Transoma Medical p4
TriPoint Global Equities p14
U
U.S. Venture Partners p3
UHS-Pruitt p8
Ulthera Therapeutics p11
United Investments p11
V
VenRock Associates p15
Venture Investors p11
Ventures West p10
Versant Ventures p11
ViOptix p11
VisCorp p14
VistaCare p8
W
Wellcome Trust p10
Welsh Carson Anderson & Stowe p4
Whitley Place p8
WRF Capital p10
WuXi PharmaTech p7
Y
YA Global Investments p15
Yorkville Advisors p15
Z
Zogenix p11 |
System With Varied Assets Focuses On LTC--
Benedictine Health System
Reorganizes, Sheds Acute Care Operation
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Health care systems with varied assets
— long-term care and acute care — take note: You might consider splitting
your long-term care assets and your acute-care assets in order to better
focus on each. Essentially, that’s the tack that Essentia Health,
the corporate parent of Benedictine Health Systems (BHS), decided
to take. Back in June 2007, when Senior Living Business talked with
Dale M. Thompson, president and CEO of BHS, about the organization’s
success with its skilled nursing offering and about other related
long-term care issues, he couldn’t let on that Essentia Health had already
been working on a major corporate reorganization for six months. At the
time, BHS operated 10 acute care hospitals and about 50 long-term care
campuses in Minnesota and several neighboring states.
As of January 2008, BHS is focused
exclusively on the long-term care facilities, and Essentia Community
Hospitals and Clinics (ECHC), a newly formed not-for-profit
subsidiary, is operating the acute care hospitals. Thompson continues to
lead BHS; Dan McGinty, formerly senior vice president of acute care
operations for BHS, was named president and CEO of ECHC. The two
organizations will operate independently but will continue to have a
strong relationship. BHS will continue to provide specific contractual
services to ECHC and will be the preferred long-term care manager for ECHC-affiliated
organizations.
Essentia Health, a $1.3 billion
health care system based in Duluth, Minnesota, was formed in 2004 through
a partnership between Benedictine Health System (BHS) and St. Mary’s
Duluth Clinic (SMDC). "For the past five years, Essentia Health has
focused on small community hospitals, the entire long-term care continuum,
and a larger tertiary-care model with physician integration as its
particular focus — an area where SMDC has been particularly successful,"
says Thompson. "As we looked to the future, we saw the differences in
those types of health care facilities and efforts. And while it’s helpful
to have a strong organization and a strong balance sheet to support all
those types of efforts, we thought reorganizing could bring more focus to
each area. So we decided to move long-term care — BHS — out of Essentia
Health."
BHS will remain wholly autonomous
and, while still sponsored by the Benedictine Sisters of St. Scholastica
Monastery who retain certain reserve powers, governance will be BHS’s
exclusive purview. "It’s not that we couldn’t act independently before,"
says Thompson, "but when you’re trying to focus on multiple things, they
become competing interests for priority, capital, and so on." Of course,
long-term care and acute care each access capital very differently. BHS
doesn’t seem to have much difficulty accessing capital that, unlike for
hospitals, is usually unrated and sometimes tax-exempt.
The reorganization wasn’t at all
contentious. In fact, everyone viewed it as an incredibly positive effort,
according to Thompson. "We all saw multiple opportunities and the need to
be able to focus to capture those opportunities," he says. "It just made a
lot of sense for us to reorganize, and the decision was seen as being very
forward-thinking."
From the long-term care
perspective, Thompson points out two primary areas where he sees real
opportunities. "First, it’s very helpful to a hospital’s balance sheet if
long-term care can be financed off the balance sheet," he explains. "A
number of acute care systems have already contacted us to say that they
are looking for a long-term care partner who can offer smaller nursing
facilities to their higher acuity patients for shorter stays."
The other big opportunity is the
consolidation of Catholic sponsorship of long-term care. "Over the last 15
years, Catholic hospitals have come together to form large hospital
systems," he says. "That same thing has not happened in long-term care. We
have a number of Catholic-sponsored long-term care organizations,
including hospital organizations, that would like to work with us in that
area, as well."
Coming up with the reorganization
model and getting all participants comfortable with the result took all of
2007. "We were capitalized very well for this," Thompson adds, "and we
have a strong management team." BHS earned $24 million on revenue of $381
million for the year ended June 30, 2007, according to Thompson. Revenue
from long-term care and post-acute operations was about $200 million, with
an additional $75 million from joint ventures.
"We see stress across the whole
long-term care continuum," Thompson notes, "but I think our new focus will
help alleviate some of that pressure."
We’ll be watching...
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