Tuesday, May 9, 2017

Why Bitcoin Is Rising

Why Bitcoin Is Rising

 Includes: COIN


Over 700 crypto currencies exist. Bitcoin is used to buy other cryptocurrencies, which increases demand for Bitcoin.
Bitcoin is up 82% to $1700 on May 9 from $935 on March 24.
Japan approves Bitcoin as a legal form of payment April 1. Blockchain technology gives credibility to digital currencies.
Investors may want to consider investing a small percentage of their net worth in crypto currencies like Bitcoin. I started buying Bitcoin in February and plan to put about 1% to 2% of my net worth in Bitcoin and other cryptocurrencies by summer's end. I think Bitcoin could reach $2,000 by year end.

Friday, May 5, 2017

$380 Million Breakup Fee Is Year's Earnings At Westar Energy

Great Plains Energy (GXP) will have to pay $380 million break up fee to Westar Energy (WR) if it fails to consummate an acquisition of Westar.

“In the event we would need to pay a termination fee, the applicable fee would be $380 million,” said Lori Wright, of Great Plains Energy.

The $380 million fee would be slightly more than what Westar Energy earns in a year. The company earned  $347 million, or $2.43 per share, for 2016 compared with earnings of $292 million, or $2.11 per share, for 2015.

Great Plains Energy and Westar Energy recently filed a petition with the Kansas Corporation Commission requesting more time to consider a merger.

On April 19, 2017, The KCC denied approval of Great Plains Energy’s acquisition of Westar. 

The new petition for reconsideration requests additional time until May 31, 2017, to allow further discussions between Great Plains Energy and Westar to determine if a mutually agreeable revised transaction might be negotiated that resolves the concerns identified by the KCC, while preserving meaningful benefits for customers and shareholders.

If you read the original order denying the sale of Westar Energy, you get the idea that the Kansas Corporation Commission left no room for negotiation. It appears the KCC hates the deal, period.

Great Plains is trying to salvage the situation. The company does not want to pay a $380 million breakup fee. 

Thursday, May 4, 2017

Westar Energy & Great Plains Ask For More Time To Consider Merger

Great Plains Energy Incorporated (NYSE: GXP) and Westar Energy, Inc. (NYSE: WR) have filed a petition with the Kansas Corporation Commission for more time to consider a merger.

On April 19, 2017, The KCC denied approval of Great Plains Energy’s acquisition of Westar. 

The new petition for reconsideration requests additional time until May 31, 2017, to allow further discussions between Great Plains Energy and Westar to determine if a mutually agreeable revised transaction might be negotiated that resolves the concerns identified by the KCC, while preserving meaningful benefits for customers and shareholders.

If the companies are able to reach and announce an agreement, they will immediately engage with the other parties to the proceeding in order to address their concerns and set a new procedural schedule that allows all parties and the KCC adequate time to review the matter. 

“We continue to firmly believe that combining Great Plains Energy and Westar creates significant value for customers, employees and communities in Kansas and Missouri as well as for our shareholders. Since announcing this transaction, we have completed integration planning, and this work has only reinforced our belief in the value of this combination,” said Terry Bassham, chairman and chief executive officer of Great Plains Energy “By joining our companies, we together can establish a leading Midwest energy company that creates benefits for all stakeholders that neither company could achieve on its own.” 

Mark Ruelle, president and chief executive officer of Westar, said,  “A combination of these two companies and the efficiencies it would create helps address the headwinds of rising costs for our customers. We are hopeful we can reach a revised agreement that paves the way for the completion of our transaction and the realization of its many customer benefits.” 

Bassham said, “We have heard the Commission regarding the structure of the transaction, including its concerns related to purchase price, capital structure, quantifiable and demonstrable customer benefits, and staffing levels in Westar’s service territory. Given the unique benefits resulting from our combination, we believe it is appropriate to explore whether there is room to work with Westar and directly address these areas, while maintaining the shareholder value creation opportunity inherent in this merger. In any case, we would only pursue a revised agreement if we determined that it delivered more value than Great Plains was able to achieve on a stand-alone basis.”

Perhaps the biggest concern by the KCC is the amount of debt that Great Plains is taking on to buy Westar Energy in the $12 billion deal. Regulators feared that the entity would be unable to service the debt without raising rates on customers. The KCC saw no value for the customer in the original transaction.

The Kansas Corporation Commission's order rejecting the sale of Westar Energy to Great Plains Energy, citing a failure to meet its merger standards.

"The Joint Application is denied," The 51-page order says. "The Commission finds the proposed transaction is not in the public interest and rejects Great Plains' application to acquire Westar. Both Parties have 15 days from the date of electronic service of this Order to petition for reconsideration."

The order also said, "Great Plains Energy does not dispute that they will incur a large amount of debt to acquire Westar. Nor does it dispute it has no written plan to de-leverage. The Joint Application is deficient. It does not include plans showing which generation plants will be retired early. There are no examples of reduced spending through procurement savings and no evidence that customers will see any savings. The Joint Application simply does not give the Commission any assurances that it will be able to service the newly-incurred debt without raising rates or reducing services. Therefore, the Commission has no choice but to find the proposed transaction is not in the public interest. Accordingly, the Commission denies GPE's application to acquire Westar."

Sunday, April 30, 2017

Why Do We Strive For The Heavens?

By Michael Hooper

Throughout history, we can find countless examples of human beings trying to reach for the heavens. We hike up a hill to get a better view, or we climb a mountain because it’s there. We build a rocket and fly to the moon. NASA has remote control vehicles on Mars looking for places to probe and dig for samples of dust and rock. We have developed listening stations that capture sounds from deep space. We use high powered telescopes to search for life on other planets. Scientists recently discovered seven planets around a white dwarf 40 light years away, these planets may contain water and life forms.

The Telegraph

The higher we climb, the harder we fall. Yet we climb anyway.

For years a friend of mine and I wanted to ride bicycles to the top of a hill in northeast Kansas -- the site is a burial ground that dates back over 4,000 years, maybe longer.

It was 80 degrees on a rare February day, Brian Carr and I decided it was time, we got on our bicycles and started riding up and around the hills, climbing higher and higher. We entered a grassy field, and continued to pedal up along an old pioneer’s path, until we finally reached the summit. It was here we looked for a 4,000-year-old Indian burial ground, we could not find it. The abundant tall grass prairie had hidden the sacred site.

We laid down in the grass and looked at the sun. The tall grass prairie made a good bed, deer had rested here. The sky was light blue with sun dogs, dripping with shafts of purple rays. We could see all around us, the four corners of the Earth. An eagle, the guardian of the day, flew over us and hovered for a bit, letting us know he sees us. Below us in the valley, the Kansas River moves eastward along its slow glide to the Missouri River. A Union Pacific train engine, bright yellow with an American flag, pulls grain cars to the west. And to our view to the south, we could see the interstate with hundreds of cars and trucks traveling east or west. 

About 20,000 feet above us, I see multiple passenger jets flying to Denver or Kansas City or Minneapolis or Dallas, maybe Los Angeles. Literally thousands of people inside the planes and automobiles, passing overhead and below us -- all at the same time -- a sea of humanity moving. Here I connect to all the living peoples on Earth and to the people in the sky and the aliens living on those distant planets 40 light years away; they are with me here now in my mind, and someone is there now also thinking the same thing, looking at Earth from 40 light years away, thinking, you know, there is someone over there on that planet who thinks about these things and is now with us in the same thought.

This place was like a vortex to the universe.

After an hour lying in the sun, we decided to look for the burial ground. I glanced behind us and there it was, we were lying next to it all along. The place found us, she drew us in and she treated us with majesty and grace. Growing among its circle of stones was a thorny low lying bush, we stood outside the circle. Its stones looked worn from rain and winds of time. The stones carried the memories of the Indians who placed them here and returned here to remember their ancestors. The tribes of old probably liked this spot, I imagine they too felt its powerful vortex to all things in the universe.

Thursday, April 27, 2017

Stormont-Vail Healthcare Earns Profit of $38.8 million

Stormont-Vail Healthcare has made profits in each of the last four years, while St. Francis Health Center has been struggling.

In 2015, Stormont-Vail Healthcare showed a net gain of $38.8 million on $591.5 million in revenue and $552.6 million in expenses, according to its 2015 Form 990 tax return. Stomont-Vail’s fiscal year runs from Oct. 1, 2014, to Sept. 30, 2015.

Stormont-Vail's gain or profit in the 2014 fiscal year was $34.7 million on $550.3 million revenue and $515.6 million expenses.

Stormont-Vail is a 586-bed acute care referral center in northeast Kansas, with about 4,400 employees, according to its Web site.

Stormont-Vail's total assets increased in 2015 to $664.2 million from $640 million the previous year. A negative trend is the increase in liabilities to $366.7 million from $332.8 million in the previous year.

Stormont-Vail’s 2012 tax return showed a profit of $20.7 million on $517.1 million in revenue and $496.3 expenses. And the 2011 tax return showed a profit of $50.4 million on $576.4 million revenue and $526 million in expenses.

Tax returns in the past few years have shown some losses at St. Francis Health Center. St. Francis suffered a $12.4 million loss in 2015, a $6.1 million loss in 2014 and a $1.46 million loss in 2013.

SCL Health says St. Francis has lost $117 million over the last five years. Brian Newsome of SCL Health says, St. Francis Health Center had a negative cash balance of $51.6 million as of March 31, 2017.

SCL Health is trying to sell St. Francis or close it by this summer. Stormont-Vail has said it is considering acquiring St. Francis. Prime Healthcare is also interested in the hospital, according to Gov. Sam Brownback.

Earlier this year, Brownback vetoed Medicaid expansion in Kansas.

On April 18, SCL Health issued a press release, saying it is looking for a new owner for St. Francis. Multiple options were considered over the last two years to avoid closing the hospital and are still being explored now. The system is eager to discuss any alternatives that can be accomplished swiftly and is willing to donate St. Francis to another organization that can take over operations. With or without another operator, however, SCL Health will cease operating the hospital this summer. 

Saturday, April 22, 2017

My Billing Nightmare With SCL Health

By Michael Hooper

In August 2013, my daughter went to the emergency room at St. Francis Health Center with terrible pains in her lower back. She was in the waiting room at the ER with some friends from high school when I arrived. When doctors finally examined my daughter, they discovered she was moving a kidney stone, this was causing all of her pain. 

About three hours after arriving, my daughter and I were sent home. Medical staff gave us the name of a St. Francis doctor who could treat her kidney stone issue. She was treated very well. Her doctor advised her to drink gallons of lemonade and water. She moved the kidney stone and never had another kidney stone moving through her since then. 

My insurance deductible was $6,000 per person. I received a bill for $4,248 from SCL Health.  I complained to SCL Health that I was overcharged $2,275 for a CT scan that was not needed. But SCL officials refused to change the bill. I talked to a patient representative. Then a director examined my daughter’s case file and wrote a letter to me saying he had reviewed the care given to my daughter and agreed we were overcharged. “We understand your concerns and will make an adjustment on your account of removing $2,275.48 for the CT scan," he wrote.

Wonderful. So then I sent a copy of his letter to SCL Health, asking them to lower my bill. You need to remove $2,275 from my bill, but the person I talked to said she was not authorized to remove that charge. Why not, I have proof that I was overcharged. I said if you don’t lower my bill I am going to the Kansas Attorney General's Consumer Protection Division with a complaint. She still refused. I wrote a letter to the AG, which wrote a letter to SCL Health asking for an explanation. Suddenly, SCL Health officials called me and got very cooperative and apologetic and lowered my bill.

But that is not the end of the story. I had agreed from the very beginning of the process to send $200 per month to SCL Health until my bill was paid off. SCL Health cashed one of my $200 checks but did not credit my account. Then I received a delinquent notice from SCL Health saying I missed a payment. The letter said, “If your account is not brought current by your next payment due date, the payment plan may be deactivated and your account is at risk of placement with a collection agency.”

So I called SCL Health to get this straightened out. I said I had actually sent a check, SCL Health cashed it but did not credit my account. An SCL Health official said I must prove I made payment by getting a bank statement or cancelled check. You mean, I am responsible for correcting your mistake? Yes, she said. So I went to the bank and gathered up evidence showing SCL Health took $200 from my account. This actually happened a second time while I was trying to pay off the debt.

In the end, I paid off the bill. The St. Francis medical professionals who treated my daughter did a fabulous job. But without the Kansas Attorney General, I would have been screwed by SCL Health. I finally wrote a letter to the AG thanking them for being there, and that the problem was resolved.

During this entire time, I was lucky to be self-employed with flexible hours so I could devote many hours per day to solving this financial crisis with my daughter’s stay in the Emergency Room at St. Francis. Just imagine, though, a person going through this process without the knowledge of the Consumer Protection Act and The Kansas Attorney General?

I’ve heard from several employees of St. Francis saying the billing problems with SCL Health in Denver continue. One person said his wife had a baby but didn’t get a bill for the medical services for four months. If bills go out too late, payments are delayed and this hurts cash-flow. The faster bills go out, the sooner you get money in the bank.

St. Francis paid $42.7 million in System Allocation expense to SCL Health in 2015. From 2013 to 2015, St. Francis paid a total of $102 million for services like billing and payroll and IT. That seems like an awful lot of money being paid to SCL Health for sub par services.

Friday, April 21, 2017

St. Francis Pays $102 Million to SCL Health

Tax returns show St. Francis Health Center paid $102 million to SCL Health for services such as billing and payroll from 2013 to 2015.

The 2015 Form 990 tax return for St. Francis Health Center shows $42.7 million expense for “System Allocation” to SCL Health.

Line 24b shows $42.7 million for System Allocation.

The 2014 Form 990 tax return shows $33.6 million to System Allocation to SCL Health.

The 2013 tax return shows $26 million for System Office Management Fees. There is no such expense in the 2012 tax return.

If you add up three years of System Allocation expenses, you come up with $102 million sent by St. Francis to SCL Health.

Brian Newsome, spokesman for SCL Health, said system allocation is the budgetary way SCL Health accounts for the services to the hospitals that they don't provide independently on their own, ranging from human resources to IT to payroll and billing, compliance, quality and marketing.

“I want to emphasize again what I shared yesterday that St. Francis dollars are being ‘taken’ from Kansas and used elsewhere is simply not true,” Newsome said. “I think part of the confusion is that people seem to think that these are separate entities and operations.”

A St. Francis Health Center employee said St. Francis used to handle all of its own billing, IT, payroll but several years ago, those operations were moved to Denver. The employee said $42.7 million for those services from SCL Health seems very high.

The 2015 tax return shows a $12 million loss.

If $42 million for system allocation were cut in half, St. Francis would have posted a profit in 2015, the employee said.

David Tangeman, accountant, says some employees were let go in Topeka and the positions were moved to Denver. But $42.7 million for services like billing and payroll seems high.

$42.7 million out of $278 million in revenue in 2015 is 15% of revenue. If someone takes 15% right off the top of a business, that business would be lucky to survive. Health care is not a high margin business.

Think about this. You could hire 200 people at $50,000 gross expense per employee for $10 million annual payroll. Yet St. Francis has been paying up to $42.7 million annually for these office functions?

The $42.7 million for System Allocation Does Not include wages and salaries for employees in Topeka. That's right there is a separate line item for wages on the expenses sheet in the Form 990. In 2015, St. Francis paid $2.9 million to officers, directors, trustees and key employees. Another $95.5 million was spent on other salaries and wages for a total of $98.4 million.

If System Allocation expenses were $42.7 million again in 2016 and again 2017, that would mean St. Francis has paid or owes $187 million in five years to SCL Health.

That is how it appears SCL Health bled St. Francis.