Month: August 2016

Latest Headlines

Aetna announces plans to slash participation in health exchanges by nearly 70%

Humana merger partner Aetna announced late this evening it will dramatically scale back participation in health-care exchanges under the Affordable Care Act to reduce its losses.

The Hartford-based health insurer said it will serve just 242 counties from the current 778, according to a press release. The followed a similar announcement earlier this month from Humana, which said it plans to largely exit the marketplaces, reducing coverage to no more than 156 counties in 2017 vs. 1,351 today.

Mark Bertolini
Bertolini

Aetna’s decision wasn’t entirely a surprise. In its second-quarter earnings report, CEO Mark Bertolini told Wall Street analysts the company halted plans to enter more states. “We are evaluating our footprint as it exists today to understand what solutions we can put forward to either fix the business or exit the business,” he said.

Aetna took a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since 2014 in individual plans.

Still, it underscored the challenges insurers are facing as the Affordable Care Act defies forecasts. The unexpectedly close attention consumers are paying to prices on ACA marketplaces is contributing to millions of losses at Louisville-based Humana and Aetna, leading both insurance giants to retreat as fewer healthy people than forecast have signed up, a point reflected in Aetna’s release.

Humana and Aetna logos 250“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” Bertolini said. “Fifty-five percent of our individual on-exchange membership is new in 2016, and in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population.

The insurer’s announcement comes amid its fight to save its proposed $37 billion merger with Humana after the Justice Department sued to block it.

Cops and Courts

Fort Wayne cops ID 28-year-old victim in fatal Texas Roadhouse shooting last night; was allegedly targeted by motorcycle club members

The latest crime news across the world of 48,000 restaurants*.

Crime scene tapePolice have identified the victim in a fatal shooting late last night at a Fort Wayne Texas Roadhouse as 28-year old Jeff Lute, and a court documents suggest the incident involved a motorcycle gang Lute once belonged to.

Earlier today, police arrested 29-year old Andrew Cassaday and charged him with murder in connection with the shooting. A second man was shot, but he was taken to a hospital where he was recovering.

The Allen County Coroner’s Office says Lute died at the scene from a gunshot wound, according to WHAS-TV. The restaurant is at 710 West Washington Center Road.

Justin Clark told detectives he had dinner with Lute, then as they walked out of the restaurant about 9:30 p.m., members of a local motorcycle club were hovering around Clark’s car, according to a new report by WPTA-TV.

“There had been an ongoing disagreement between the bike gang and the victim, and their paths crossed at this local eatery,” Officer Michael Joyner with the Fort Wayne Police Department told the station.

Court documents suggested the bike club members were waiting for Lute, who’d apparently been a former club member.

A chase around building

Clark said one of those members, Philip Elkins, started threatening Lute, eventually taking a swing at him, WPTA said. Lute then pulled out a gun and shot Elkins in the leg, according to court documents cited by the station.

Andrew Cassady
Cassady

Clark told police the club members chased Lute around the building. Cassaday didn’t join the chase, according to Clark, instead grabbing his girlfriend’s gun out of a car, waiting for Lute to come around the corner, then  shooting him in the neck, WPTA says.

Cassaday allegedly got back in his car, picked up the injured Elkins, and drove him to the hospital. More news coverage.

Here’s a photo of the restaurant from Google Street View:

Fort Wayne Texas Roadhouse
The chase would have occurred around that building.

* Yum has 43,000 KFCs, Pizza Huts and Taco Bells in nearly 140 countries; Papa John’s has 4,900 outlets in 37 countries, and Texas Roadhouse has 485 restaurants across the U.S. and in five other nations. With that many locations, crimes inevitably occur — with potentially serious legal consequences for the companies.

Latest Headlines

Kindred promotes Zachariah to head of rehabilitation services; and UPS CEO Abney urges Congress to pass new Asia trade pact

A news summary focused on 10 big employers; updated 7 p.m.

KINDRED: Jason Zachariah‘s appointment as president of Kindred Rehabilitation Services is effective immediately. He was previously chief operating officer of Kindred Hospital Rehabilitation services since July 2013. He started at the Louisville hospital and nursing home giant in 2006.

Jason Zachariah
Zachariah

In his new role, Zachariah also joins Kindred’s top-level executive committee, the company said in a press release. Here are all the executive officers.

He succeeds Jon Rousseau, who is leaving the company to pursue other interests, Kindred said. Rousseau joined Kindred in July 2013 and was president of KRS since April 2015.

Kindred COO Kent Wallace praised Rousseau in a statement, suggesting his exit was at least partly amicable. “We thank Jon for his tireless dedication and the strategies he implemented that helped us expand KRS,” Wallace said.

Zachariah’s promotion was announced after stock markets closed. Kindred’s shares closed at $11.06, up 4 cents.

Kindred employs about 2,200 employees in Louisville; it has about 102,000 employees in total. More about Kindred’s operations.

David Abney
Abney

UPS CEO David Abney is pushing Congress to pass a new Asian trade agreement by the end of the year, saying in an interview that if the U.S. doesn’t act now it will be left behind, as Asian nations sign their own deals. UPS and FedEx executives have become more outspoken on free trade in recent weeks as President Obama’s signature Trans-Pacific Partnership agreement looks unlikely to win congressional passage either after the November elections, or under the next administration (Wall Street Journal).

Abney was appointed CEO in 2014, and is the 11th in the 108-year history of UPS. The shipper is Louisville’s single-biggest private employer, with 22,000 workers. More about UPS’ Louisville operations.

Executive Pay

Papa John’s COO Ritchie nets $625K in share trade

Steve Ritchie made the trade Aug. 12 with options he exercised that day at a so-called strike price of $26 a share, according to a just-filed Securities and Exchange Commission document. That means he netted about $625,000 after selling the 12,836 shares at prices ranging from $74.37 to $75.08.

John Ritchie
Ritchie

The options vest in three equal annual installments beginning one year from the grant date of Feb. 28, 2013. The company’s PZZA shares closed today at $75, up 35 cents.

Just last week, Ritchie told the SEC he’d sold 988 shares for about $75,000; there were no options involved in that trade.

Ritchie has been the pizza chain’s president and chief operating officer since July 2015. He started at the company as a customer service representative making $5 an hour in 1996.

Wayback News

26 years ago today: McConnell accused of exaggerating his record; Humana bans smoking — and an infant girl named Jennifer Lawrence is born

By Jim Hopkins
Boulevard Publisher

CJ front page August 15 1990
26 years ago today.

On Aug. 15, 1990, The Courier-Journal delivered a 52-page paper chock-a-block with news. President George H.W. Bush was rounding up support for an embargo against Iraq, retaliating for its invasion of Kuwait less than two weeks before. Sen. Mitch McConnell, still in his first term, was on the hot seat in his re-election campaign. Kentucky’s powerful tobacco industry still didn’t accept the dangers of smoking. And comedian Bob Hope and his pet poodle were in town. It was a humid Wednesday, with temperatures heading for 86 degrees. The news:

“U.S. Sen. Mitch McConnell’s re-election campaign is extolling his 5½-year record with a wide range of radio commercials — at least two of which exaggerate the impact of his work,” CJ political writer Al Cross wrote in a page-one story. “Those two ads say McConnell worked out the financial problems of Big Rivers Electric Corp., and saved the Kentucky construction industry by casting the deciding vote against a presidential veto of a highway bill.”

The record, including statements from company and government officials, contradicted McConnell’s account, Cross said. But the Louisville Republican vigorously defended the commercials, saying they weren’t inaccurate or misleading. At the time, McConnell faced Democratic nominee Harvey Sloane, the former Louisville mayor and  county judge-executive.

Humana building
Humana Tower
Humana nixes smoking

Citing concerns about deaths linked to passive smoking, Humana said it would ban smoking at its corporate headquarters downtown and in all division offices starting Feb. 1, 1991. The health insurance giant’s decision came after a June report by the U.S. Environmental Protection Agency that about 3,800 lung-cancer related deaths per year among non-smokers are caused by secondhand cigarette smoke. Humana estimated only 1 in 7 employeees smoked, a decrease of about 35% from several years before.

The story noted that “the tobacco industry, which has never agreed that smoking is a hazard even to smokers themselves, has attacked the EPA findings as unsubstantiated.”

Comedian Bob Hope signed copies of his new book, “Don’t Shoot, It’s Only Me,” at the W.K. Stewart Booksellers in the Holiday Manor Shopping Center. The 87-year-old stayed at the Galt House with his wife Dolores and their poodle Baxter.

Bacons logoThat day’s CJ carried three full-page ads for Louisville-based Bacon’s Department Store, and four full pages of business news, including 2½ pages of stock listings. The Dow Jones Industrial Average had closed the day before at nearly 2,748 points.

ValuMarket was selling half-gallon cartons of Sealtest ice cream for $1.98. TWA offered roundtrip tickets to New York City for $158.

And unknown to most everyone reading that day’s paper, Jennifer Shrader Lawrence was born to Gary Lawrence, a construction worker, and his wife Karen, a children’s camp manager.

Postscript

Iraq is Continue reading “26 years ago today: McConnell accused of exaggerating his record; Humana bans smoking — and an infant girl named Jennifer Lawrence is born” →

Latest Headlines

Religious leader in northeast India bans KFC meals, saying they don’t conform to Islamic law; GE contract talks start today; and Texas Roadhouse treads softly as rivals jack up prices

A news summary focused on 10 big employers; updated 8:31 a.m.

KFC: The senior mufti in northeastern India’s Bareilly has issued a fatwa, or an Islamic edict, against KFC restaurants in the area, terming it a “sin” to eat there because the chicken sold doesn’t conform to Islamic law. “People at KFC process the meat away from the eyes of Muslims and such meat has been termed haram in Islam,” he said. The mufti said that the halal certificates displayed at the stores are irrelevant if the owners and workers can’t detail the procedures they use. “Halal is not only about killing the animal,” he said, “it is also about the way its meat is processed and cooked” (Hindustan Times).

GE: Contract talks open today between Louisville-based GE Appliances and the union representing about 4,000 workers at Appliance Park, and the saber-rattling is well underway. Management says the factory complex in the south end is losing money, and workers are earning more than typical in the industry. But a union leader says the company is merely trying to intimidate workers ahead of negotiations (Insider Louisville). The employees are covered by a contract reached before GE Appliances was bought in June by China’s Haier for $5.6 billion. In all, the nearly 60-year-old complex has about 6,000 workers. GE Appliances employs another 6,000 workers elsewhere. More about the company’s history in Louisville.

TEXAS ROADHOUSE, despite a second-quarter earnings miss, is a bright spot in the struggling casual dining industry, where rivals have boosted prices to compensate for falling traffic — and paid a price for the misstep. The steakhouse chain increased prices less than peers, and traffic’s improved, according to KeyBanc Capital Markets. Overall, traffic at casual-dining chains is down almost 30% since 2005. What gives? “Casual-restaurant chains are feeling the heat as loyal baby-boom customers age and millennials take their place,” the business weekly says. “Boomers like big portions and value pricing; their children, who favor organic and gluten-free foods, are pickier and less price-sensitive” (Barron’s).

On Friday, Texas Roadhouse shares ranked No. 1 in weekly performance among big area employers Boulevard tracks. Founded in 1993 with a single restaurant in southern Indiana, it’s grown to nearly 500 outlets in 49 states plus five foreign countries. It employs 48,000 workers, including about 500 in Louisville. More about the chain.

Pizza Hut boxPIZZA HUT: In Albuquerque, a Pizza Hut is seeking delivery drivers in a Craigslist ad posted yesterday that lists the following perks: “The hours are flexible. You’re out and about, listening to tunes and delivering great pizzas. Oh, and people are really, really happy to see you!” (Craigslist).

TACO BELL: In Portland, Ore., a man posted the following in Craigslist’s men-for-men Missed Connections section yesterday: Continue reading “Religious leader in northeast India bans KFC meals, saying they don’t conform to Islamic law; GE contract talks start today; and Texas Roadhouse treads softly as rivals jack up prices” →