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The many extracts on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of the allegations made.

Genesis Health Ventures in the Marketplace


The extracts on this page show the flow of events as Genesis rose from a glimmer of profit potential in an entrepreneurs eye in 1985 through a fury of buying and borrowing to become, by the end of 1997 an enormously successful conglomerate admired and praised in the marketplace - its shares sold for $40.

The extracts document its early troubles in 1998, its slippery slide into financial difficulties in 1999 and finally its plunge into bankruptcy in 2000.

Consider as you read this the amount of energy devoted to all this marketplace activity and the funds spent on it. Might the money have been better spent on care. With the best intentions in the world, how much energy and how much money would be available for care? How much would care be compromised financially and in staffing in order to fund and staff this activity? What would happen to the morale of medical and nursing staff caught up in all this as the facilities which they loyally serve and the patients they care for are traded indiscriminately between large impersonal profit focussed chains.

Genesis may have entered the marketplace with the best of intentions to treat patients well and to be truly innovative in the sort of care it provided. This seems likely. My thesis is that once the market takes control and imposes its modes of operation these intentions are of little consequence. Either the company goes under or it eventually compromises its good intentions. In this situation those who succeed are the people who can maintain the illusion of care, convince themselves, persuade others and at the same time responding to the demands of the market.

The market ultimately dictated what would happen. Care of the elderly became a liability and which pushed the company into bankruptcy. When it emerged from bankruptcy it struggled to rid itself of the nursing homes and branch into something more profitable.

Note that most PR Newswire and Businesswire articles were submitted by the companies or by their critics. The extracts selected from the articles do not necessary reflect the content or intent of the whole article


COMMENT:- The first extract simply gives Genesis view of itself. It suggests that Genesis founders did have a mission of care when they started. Sun, and IHS probably did as well. What we are looking at is the ability of a company to actually implement its vision when confronted with the competitive pressures of the marketplace. I have suggested that the prime focus is profit and not care. Success is measured in economic terms and the prime objective for each person in the market system is economic success. A variety of psychological and social processes and strategies come into play when susceptible individuals and groups are confronted with the stark choice between profit and care. Choosing the latter is likely to result in failure. As a consequence they maintain an illusion of care and ethics which they never challenge. They sell this illusion to others. The information I have suggests that Genesis may have done better than some of its competitors. It has not been accused of fraud - yet.

NeighborCare(SM) 'Quest' Program Introduced to Address Demands of PPS
PR Newswire October 21, 1998

Genesis Health Ventures, Inc.(SM) is a leader in the health care industry and was founded in 1985 to redefine how America cares for the elderly, using a coordinated, comprehensive approach that helps older adults define and live a full life. The Kennett Square, Pa.-based company, which consolidated its businesses under the brand name Genesis ElderCare(SM) in 1996, has established Genesis ElderCare Networks in five regional markets in the eastern United States and currently serves more than 170,000 customers daily.

Size does matter; healthcare industry mergers and acquisitions; Cover Story
Hospitals & Health Networks June 20, 1998
Blecher, Michele Bitoun

- - - - - - - - - (millions)

1. HealthSouth acquired Horizon/CMS - - - - - - - - $ 1,600
2. Genesis acquired the Multicare Companies - - - - - $ 1,400

COMMENT:- The next article 1999 article uses Beverly as the prime vehicle to expose what is happening to patients in aged care. The extract is selected and put here because it tells of some of Genesis early purchases in pharmacy. It describes the origin of Eldertrust the REIT which shares the same headquarters and owns the bulk of Genesis facilities. It leases them to Genesis.

THE SHAME OF OUR NURSING HOMES; nursing homes allegedly treat patients poorly ::::: Millions for investors, misery for the elderly
The Nation March 29, 1999
BYLINE: Eric Bates,

Genesis Health Ventures (Kennett Square, Pennsylvania). The company bought a pharmaceutical chain and sponsored a real estate investment trust for some of its 37,700 beds, boosting revenues to $1.4 billion.E.B.

Banking: financing trends in an acquisitive health care market - focus on long-term care.
Journal of Health Care Finance June 22, 1998
Gordon, Lawrence J.; Bressler, Andrew

Genesis Health Ventures' acquisition of Multicare for $ 1.4 billion
This acquisition, which was supported by financial buyers TPG and Cypress Group, represents an important strategic step for Genesis as most of Multicare's markets overlap or complement Genesis's primary markets. In addition, this transaction will further Genesis's operating strategy to provide comprehensive elder care services in the managed care environment. The combined company will have 290 facilities with more than 35,000 beds, strategically concentrated in the Mid-Atlantic corridor. Genesis, whose integration expertise ranks among the best in the long-term care sector, likely will incorporate Multicare's facilities into its regional clusters.
Product/service mix
The long-term care sector has been marked by a trend among companies to diversify revenue sources and to seek higher margins by offering more services on the continuum of care as well as other ancillary services. Thus, a company's fundamental strategy and its service mix should be evaluated. Strategically, some long-term care companies, such as Sun, target an acute level of patient care, which yields higher per diem rates at the expense of occupancy. Others, such as Extendicare, manage their businesses based upon occupancy by targeting a lower acuity level with a longer-term nursing profile, enabling the company to integrate more ancillary services. The Genesis/Multicare transaction represents an attempt to combine companies following each of these strategies to create a network catering to patients with varying acuity levels.

COMMENT:- The most useful account of Genesis earlier conduct comes from a series of three investigations by the Service Employees International Union (SEIU). These investigations analyse available data comparing Genesis with other facilities and with the records of the same facilities before they were purchased by Genesis. Their findings are very disturbing and I have devoted a separate web page to them. On this page I have included extracts from these three investigations. These describe Genesis marketplace polices and practices. The SEIU had access to company reports and other documents which I have not seen. I have given these sources when the SEIU has used them as references.

House of Cards describes what happened to 10 New Hampshire nursing homes after they were purchased by Genesis.

House of Cards (How Patient Care Was Undermined When GENESIS Took Over New Hampshire's Largest Nursing Home Chain)
Report #2 in a Series from SEIU, the Service Employees International Union -- September 1998
Quotes and References are taken from House of Cards.

Schroder & Co.'s industry report cites Genesis Health Ventures as a " prime example" of a company that buys up smaller nursing home net-works to gain dominance in specific regions and create new consumers for its profitable ancillary services .
(Schroder & Co. Inc., The Long-Term Care Industry, November 24, 1997, p. 19)
Genesis Just Keeps Getting Bigger
There were 97 nursing homes in the Genesis chain when Genesis took over these New Hampshire facilities in 1995. Since then Genesis has continued buying up other chains and currently owns or manages 350 facilities throughout the east. Genesis is now the largest nursing home chain in New Hampshire, Massachusetts , Pennsylvania, West Virginia , Maryland and New Jersey. While Genesis is the fifth largest chain nationally in terms of number of facilities, in terms of concentration in the states where it operates, it surpasses all others .
According to industry analyst Jean Swenson of Alex Brown & Sons, "Genesis has probably taken the development of this elder care network the furthest of any of the companies. It's achieved significant regional domination in . . . the Boston-Washington corridor on the East Coast." (The Wall Street Transcript, Industry Outlook, August 15, 1997)
Mike Walker, CEO talks about regional domination. In the Northeast:
"Ask the question, 'How many of the long-term care companies are in this geographical marketplace?' Not a lot." In Massachusetts : ". . . we are the most substantive provider of long-term care services throughout the entire state, but with real dominance in three cities-Springfield, Worcester and Boston."

In New Hampshire : ". . . we're the dominant provider in New Hampshire, in Manchester and Concord ."

In Maryland: "Basically, in Baltimore, we'll cover the whole state.

These networks are so pervasive and so substantive that we will capture the managed care marketplace because there will be no place else to go."
("Genesis Health Ventures, Inc. :Company Report ," August 18, 1997 , Wall Street Transcript Corporation.)

COMMENT:- "Rolling the Dice" expresses its concern that citizens enrolling in HMO's that contract services to Genesis will be required to use Genesis post-acute and other resident facilities unless they choose to pay out of their own pockets. They do so without any knowledge of the services Genesis actually provides. The report then describes its own investigations as well as investigations carried out by others. It concludes that the elderly are likely to get Genesis, whether they want them or not. All parties need to think carefully about the implications.

Rolling The Dice Quality Failures at Genesis ElderCare
1998,Service Employees International Union,

Genesis Health Ventures, the nation's fifth largest nursing home chain, has been hailed as a model for companies in the post-acute and long-term care industry.
But even as consumers' complaints about access to physicians and hospitals gain attention, the managed care industry is preparing to put its cost containment strategy to work in controlling the care provided to patients and residents-especially the elderly-in long-term, rehabilitative, and post-hospital settings. Post-Acute Care: The New Frontier for Managed Care Both Medicare managed care and private managed care plans are moving to cover a variety of medical settings ranging from post-surgical care and rehabilitative care to hospice and AIDS programs. This means that once again, consumers may be forced by their managed care plans to accept care from providers they know little or nothing about.

Leading the charge for managed post-acute care are the for-profit nursing home chains, which claim they can provide these services less expensively and more efficiently than hospitals.
Whether You Want Them or Not
Genesis Health Ventures, the nation's fifth largest nursing home chain, has been hailed as a model for companies in the post-acute and long-term care industry.
Genesis plans to use its position as the largest provider in several regional U.S. markets as the basis for offering low rates to managed care companies. In exchange, Genesis hopes to win exclusive contracts to provide a full spectrum of long-term and post-acute services.

Managed care companies have been successful in attracting business by lowering the cost of health care. To contain costs, consumers who join a managed care plan are pressured-usually in the form of higher out-of-pocket costs for out-of-network care-to choose services within the plan's network .

Consumers in managed care plans that enter into the Genesis partnership may find that their only option for long-term care may be in a Genesis facility. Consumers who need rehabilitation or care during recovery after a hospital stay may find them-selves being checked out of their more-expensive hospital beds and into a Genesis ElderCare Network facility. Consumers will, in effect, be purchasing the Genesis net-work (whether they want to or not) when they choose a health insurance plan.
- - - - Genesis Health Ventures, is positioning itself to win the managed care race by specializing in providing low -cost long-term care services. The Genesis strategy is to accomplish two goals simultaneously. By aggressively seeking exclusive contracts with managed care organizations, Genesis promises to lower managed care costs . At the same time, Genesis has launched a branding strategy, the "Genesis ElderCare Network," that promises health care consumers a consistently high level of quality care in all of their facilities.
"Genesis has probably taken the development of this elder-care network the furthest of any of the companies . It's achieved significant regional domination in ... the Boston-Washington corridor on the East Coast."
(" Industry Outlook,"Wall Street Transcript Corporation, Aug. 15, 1997.)

The Genesis network spans the eastern United States from northern Vermont, New Hampshire and Massachusetts and extends west through Pennsylvania,West Virginia and Ohio. It includes Illinois and Wisconsin and extends south to Florida. It dominates key markets in Boston, Springfield and Worcester, Massachusetts, and Philadelphia, New Jersey, West Virginia and Baltimore. Facilities in Connecticut, North Carolina, Virginia, Rhode Island and Delaware link the chain together.
Genesis CEO Michael Walker has characterized Genesis' managed care strategy as a promise to save money for the HMOs. HMOs and other managed care companies seek to treat patients in the lowest-cost settings, often substituting nursing homes or home care for hospitals. By providing services efficiently, Genesis claims it can lower the amount of money managed care providers must spend on actual medical care, and to share those savings with its managed care partners.

COMMENT:- The SEIU did a similar study to that in New Hampshire after Genesis purchased Multicare, doubling its size.

Bad Deal :: Genesis ElderCare's Takeover of Multicare and Its Impact on Patient Care
Report 1999 Service Employees International Union

From Executive Summary of Bad Deal:
- - - - examines the consolidation of the nursing home industry and its impact on patient care through a case study of the October 1997 leveraged buyout of the Multicare Companies engineered by Genesis Health Ventures (GHV). This acquisition made GHV the nation's fifth largest nursing home chain (measured by the number of owned or managed homes) and the largest nursing home operator in Pennsylvania. Our examination of inspection reports at 16 Pennsylvania Multicare nursing homes before and after the take over reveals that the average number of patient care violations at these homes rose even while average patient care violations for the state as a whole declined. The terms of the leveraged buyout also left GHV with significant financial obligations to its partners and banks.
In 1998, Genesis Health Ventures received 20 percent of revenues from Medicare, twice the industry average. In 1999, GHV is experiencing financial difficulties under the new Medicare prospective payment system of reimbursement. Profits from Medicare have declined and demand for specialty medical services, provided by Genesis ElderCare under contract to other facilities, has also dropped.

Large Chain Mergers and Acquisitions Lead to Larger Nursing Home Debt During 1996 and 1997, the nursing home industry continued to rapidly consolidate with four of the top seven chains expanding by 50 percent or more through mergers and acquisitions. Many corporations sought to maximize profits by creating networks (broadening their market presence) and by buying up ancillary services such as pharmacy and therapy providers (deepening their revenue streams).

In theory, these strategies should have resulted in more profit through greater efficiency and more consistent service by creating a continuum of care. However, expansion came at a steep price, and, today, six of the seven largest nursing home chains are saddled with high debt burdens.

"The long-term care industry 's debt to total capitalization was stable through 1994 at roughly 30 percent. However, since that time, the industry has experienced a steady increase in leverage. By the close of the third quarter of 1998, debt to total capital for the industry had reached 62 percent."
(Merrill Lynch," Long-Term Care Services: An Industry in Transition," Feb. 11, 1999.)

Some of the chains with the largest debt, such as Genesis Health Ventures, also have less obvious financial obligations; for example, lease payments to the real estate investment trusts created through spinoffs or GHV's put and call agreement with two of its investors, Cypress Group and Texas Pacific Group.
At the time, the deal was heralded as a creative harbinger of the future of nursing home industry consolidation.
- - - the Multicare take over left GHV with a significant debt load. In this case, the finances of the take over were too large to be managed through traditional bank loans, creating the need for Genesis Health Ventures to partner with Texas Pacific Group and Cypress Group in a leveraged buyout .

The complex terms of the deal gave Genesis Health Ventures five years (until October 2002) to accumulate enough money to buy out its partners at a cost of up to $1 billion. (GHV's total revenue in 1998 was just $1.4 billion.) This obligation exists in addition to substantial traditional debt.
(Genesis Health Ventures Form 8-K filed Oct. 24, 1997.)

COMMENT:- The next article illustrates what happens to medical groups who operate in a competitive corporate marketplace when they attempt to put care before profit. Interesting that Genesis was involved in this. It suggests that there was, at least at some stage a genuine commitment to caring for people properly. This was not a big investment.

Doctors health bailout
Baltimore Business Journal October 16, 1998

Headnote: Investors to keep company afloat with capital infusion.

Doctors Health Inc. this week was on the brink of securing a financing package that should keep it afloat at least for a year, but will drastically alter control of the troubled company, according to sources involved in the deal. The Beacon Group, of New York, and Genesis Health Ventures Inc., already Doctors Health's majority investors, are expected to put enough money into the company to see it through its current problems. "Our investors have strongly committed to funding us," said James Gast, Doctors Health vice president of administration. "But we're not out of the woods yet" Gast said Doctors Health must restructure much of its business and rethink its strategy of managing care for Medicare patients in health maintenance organizations (HMOs).

Lofty idea sinks fast
Baltimore Business Journal October 16, 1998

The reasons for the stunning fall of Doctors Health Inc. could easily be lost in the arcane language of modern health care - terms such as global capitation contracts, medical service organization, care management And while the vagaries of modern health care did play a role in Doctors Health's decline, the underlying cause is all about business. By the end of 1997, even as the company was being lauded in the press as the future of managed care, Doctors Health was a very sick company. It was bleeding money and heavily invested in a business that was about to collapse. Doctors Health was founded by the very cream of Maryland's medical community, a group of doctors who proclaimed a vision of reclaiming patients from bottom-lineminded insurance companies. But, very quickly, Doctors Health became a very big business.
It seemed as if everyone in Owings Mills was way more interested in going public and getting investors to sink money into the company than managing lives and patients," one health care executive with knowledge of the company said. The heart of the organization, the reason it was started, began to fall out." More bottom-line pressure was added in September 1996, when Genesis Health Ventures paid $ 10 million for a stake in the company. The last big boost came in July 1997, when the Beacon Group, of New York, agreed to pony up a whopping $ 30 million. The first $ 20 million came then, with the final $ 10 million scheduled to come forth a year later, subject to the company meeting certain financial goals

Doctors Health files for bankruptcy protection; Owings Mills group lost $40 million last year; Health care
The Baltimore Sun November 18, 1998

Doctors Health Inc. of Owings Mills has filed for bankruptcy protection and reorganization.

Company officials could not be reached for comment on the Chapter 11 filing. But Blue Cross officials confirmed that Doctors Health has canceled its largest remaining contract, under which it cared for about 8,800 Blue Cross HMO patients.

Doctors Health Inc. creditors can only wait
Baltimore Business Journal December 18, 1998

For the creditors of Doctors Health Inc., the process of salvaging even a portion of their investments has been reduced to a waiting game.
Meanwhile, Doctors Health and its two main creditors, Genesis Health Ventures and Beacon Group, are trying to arrange a financing package that would inject $ 600,000 into the company to keep it running day-to-day. Judge Schneider, though, rejected the loan Dec. 8.

COMMENT:- Examine the program below. Consider how the energetic application of each of these methods and products potentially threatens care. The company is losing money and its survival is threatened. The pressure to cut costs and make changes which impact on care is very strong. It is easy for even doctors and nurses genuinely concerned for their patients to justify and rationalise changes under strong pressures. What about corporate administrators?

NeighborCare(SM) 'Quest' Program Introduced to Address Demands of PPS
PR Newswire October 21, 1998

NeighborCare(SM), the leading provider of integrated post-acute health care services, today announced the launch of NeighborCare(SM) QUEST, a proprietary program developed by NeighborCare to address Medicare's new reimbursement method -- the prospective payment system (PPS).

Under PPS, skilled nursing facilities are paid by Medicare on a per diem basis rather than the traditional fee-for-service model. This new payment system requires facility operators and caregivers to reevaluate their methods of assessment and care delivery, and realign their strategies to be consistent with the prospective payment system.

NeighborCare(SM) QUEST is designed to enable long-term care providers to adapt to the new system through the provision of clinically appropriate and cost-effective methods and products. QUEST is a total solution for the provider and caregiver and includes:

COMMENT:- I wonder what the words "quality mix" in the following article means. Are they talking about a money making insurance mix of private pay, Medicare, and Medicaid. If so then making money has been defined as "quality". Solving the problem may mean discriminating against poorly insured Medicaid patients.

The use of the vague word "quality" is one of the linguistic plays on words used by corporations to deceive themselves. "Quality", a term with strongly positive associative meanings is frequently misused instead of a denotative term like "standard". Care which makes money similarly becomes "quality care" and this is then sold to the market and to the community as if "quality care" were actually care which was of a high standard, when in fact it is the very opposite. I am not suggesting that Genesis did so, but others have.

Genesis Health Ventures Announces Reduced Fourth Quarter Expectations and Anticipated Impact of Prospective Payment System
Business Wire November 2, 1998

November 2, 1998-- Genesis Health Ventures Inc.(SM) (NYSE:GHV) Monday announced that it expects its earnings for the fourth quarter of its fiscal year ended Sept. 30, 1998 to be significantly below the $ 0.45 per share, on a diluted basis, reported by the Company for its prior fiscal quarter ended June 30, 1998. The anticipated results are lower as a result of the Company's reduced earnings pick-up from its 43.6% owned Multicare affiliate which will be below expectations primarily due to lower than anticipated occupancy and quality mix in Multicare's eldercare centers heightened by a higher than anticipated effective tax rate (non-cash) which will be recorded in the current quarter.
Additionally, the anticipated results, which will include one month of the results of operations from Vitalink Pharmacy Services Inc., are lower as a result of reduced quality mix while maintaining occupancy levels at Genesis' centers, increased benefit costs, and the previously announced termination of management agreements covering eight eldercare centers.

The Company believes that fourth quarter earnings were also adversely impacted by challenges posed from external factors such as changes in Medicare reimbursement under the Medicare Prospective Payment System ("PPS"), increased regulatory initiatives by state and federal agencies and continued pressures on operating margins by payors. As a result of these factors, the Company currently expects its fourth quarter earnings per share (before anticipated fourth quarter non-cash charges described below) will be approximately $ 0.16 to $ 0.18 lower than its prior quarter of which $ 0.05 relates to the non-cash change in Multicare's anticipated effective tax rate.

Several Nursing Home Companies Placed on S&P CreditWatch Negative
PR Newswire November 3, 1998

Standard & Poor's today placed its ratings for several nursing home companies on CreditWatch with negative implications (see list below). The CreditWatch listings affect over $8 billion in rated debt.

Genesis Health Ventures Inc.

Corporate credit rating B+
Senior secured debt B+
Subordinated debt B-
Bank loan rating B+

The Multicare Cos. Inc.

Corporate credit rating B+
Subordinated debt B-
Bank loan rating B+

COMMENT:- Eldertrust is a REIT and its main business is leasing facilities to Genesis with which it shares offices. If Genesis goes under Eldertrust will follow and at the time of writing (Jan 2001) its share price is in tatters.

ElderTrust Addresses Recent Genesis Health Ventures Announcement
PR Newswire November 6, 1998

ElderTrust (NYSE: ETT), a health care REIT, today addressed Monday's announcement by Genesis Health Ventures, Inc. (NYSE: GHV).

"We believe that it is important to address this announcement as Genesis is our most significant tenant and borrower," said Edward B. Romanov, Jr., President and Chief Executive Officer of ElderTrust.

In the announcement Genesis reported, among other things, that it expects fourth quarter 1998 earnings to be significantly below that of its prior quarter ended June 30, 1998, and that the negative impact of the Medicare Prospective Payment System ("PPS") will be greater than previously anticipated.
"It appears that PPS may have a negative impact on the skilled nursing industry," noted Mr. Romanov. "However, we do not believe it will have a material impact on ElderTrust."

COMMENT:- The following was not good advice.

Healthcare Sector: Poor Results, Good Investments
High Yield Report November 9, 1998

Bond prices in the long-term healthcare companies are holding stable and in some cases, even increasing, despite the poor showing in the quarterly results.
Genesis Health Ventures is another company that warned of disappointing results in the fourth quarter last week. It said that profits would be just one-third of analysts' predictions, or 16 to 18 cents per share, instead of the 49 cents estimated by First Call Corp., which compiles estimates of analysts' predictions.

COMMENT:- Reorganising and bringing in new staff.

Genesis Announces New Board Appointment and Executive Promotions
Business Wire November 19, 1998

1998-- Genesis Health Ventures, Inc. today announced the appointment of Jack R. Anderson to the company's board of directors. Currently, the president of Calver Corporation, Dallas, Texas, a consulting and investment firm, Mr. Anderson brings to Genesis' board nearly 30 years of experience in the healthcare industry. He served as president (1970-1976) and later chairman (1977-1981) for Hospital Affiliates International, Inc. in Nashville, Tennessee. He then served as chairman of INA Health Care Group, Inc., Dallas, Texas, before joining Manor Care in 1981.
In a separate announcement, Genesis named President Richard Howard and Executive Vice President and Chief Operating Officer Dave Barr vice chairpersons of the Company. Earlier this year the Company formed the Core Business Group and the Strategic Business Group to better align it's eldercare businesses.

COMMENT:- Starting to sell some of its diversified holdings, but it still buys in pharmacy.

Genesis Health Ventures Reports Fiscal 1998 Results
Business Wire November 24, 1998

As previously announced, the Company recorded non-cash impairment charges of approximately $ 77 million, after-tax, relating to the decision to dispose of certain non-core businesses, including the Company's ambulance business and certain Medicare home health operations; investments and other assets the Company believes are impaired as a result of Medicare Prospective Payment System ("PPS''); and an impaired investment in a medical care management company in the Company's Chesapeake region. During fiscal 1997, the Company recorded a non-cash impairment charge of $ 9.6 million after tax.
Net loss for the fourth quarter of fiscal 1998 was $ (67.4) million or $ (1.92) per share compared to net income of $ 7.6 million or $ 0.21 per share in the prior year.
Revenue growth in the fourth quarter reflects the continued expansion of the Genesis ElderCaresm Network through the acquisition of Vitalink Pharmacy Services, Inc. on August 26, 1998.

COMMENT:- Other companies are already in trouble and going cap in hand to their lenders. Note the comment about the new prospective system which brings managed care like pressures to bear. They could equally have said that by underservicing they will make more profit.

Bank Letter December 21, 1998

Healthcare companies are flocking back to the bank market to loosen covenants on their credit agreements as they wrestle with Medicare's prospective pay system, bankers said. The prospective pay system introduces fixed reimbursement for service providers and will likely reduce their revenue, an event that could make some companies breach their covenants. The new system will start being phased in Jan. 1, 1999. Companies currently seeking amendments to the credit agreements reportedly include Mariner Post-Acute Network and Integrated Health Services. Sun Healthcare and Genesis Health Ventures are among companies that have already altered leverage covenants.
Historically, healthcare companies were reimbursed by Medicare for all of their costs. The new prospective pay system forces service providers to work within a specific budget. If companies over-service their patients, they find themselves out of pocket.

Bed News: The Business Potential Of Nursing Homes Is Elusive, Vencor Finds: Bid for High-Paying Patients Brings Firm Headaches, And It Has to Regroup: Medicaid Is Welcome Now
The Wall Street Journal 12/24/98
Chris Adams and Michael Moss

Stock values reflect the problems. A nursing-home company assembled by financier Leon Black, Mariner Post-Acute Network Inc., has seen its share price fall nearly 75% since spring. So has Genesis Health Ventures Inc., a chain backed by two teams of financiers.

Forbes, 01/11/99, Vol. 163 Issue 1, p182, 2p,
Section: The Forbes Platinum List

It was another sick year for health care services, as hospitals, HMOs and nursing homes all came under pressure to adapt to significant changes in Medicare funding and reimbursement systems. Managed-care stocks climbed 15% last year, but hospital stocks were off an average 22% and long-term-care providers were off 56%. Mergers and acquisitions slowed in the HMO sector but remained brisk in long-term care, with more than $10 billion in deals.
Earnings uncertainties will plague the long-term-care sector as it continues to adapt to lump-sum Medicare reimbursement. Expect more mergers in this sector. Beverly Enterprises and Genesis Health Ventures are possible takeover candidates.

5 Healthcare Firms Ratings Cut By S&P Over Medicare Changes
Dow Jones Newswires March 3, 1999

NEW YORK -- Standard & Poor's said it lowered the ratings for five companies, and their subsidiaries, being impacted by Medicare's adoption of the restrictive Prospective Payment System (PPS) for the reimbursement of nursing homes.

The ratings for these companies - Genesis Health Ventures Inc., Integrated Health Services Inc., Mariner Post-Acute Network Inc., NovaCare Inc., and Sun Healthcare Group Inc. - remain on CreditWatch with negative implications, S&P said.


- - - - - - - - - - - - - - - - - - - - To- - - - - From

- Genesis Health Ventures Inc.

  • Corporate credit rating - - - - - B - - - - - B+
  • Senior secured debt - - - - - - - B - - - - - B+
  • Subordinated debt - - - - - - - CCC+ - - - - B-
  • Bank loan rating - - - - - - - - B - - - - - B+

- The Multicare Cos. Inc.

  • Corporate credit rating - - - - B - - - - - B+
  • Subordinated debt - - - - - - - CCC+ - - - B-
  • Bank loan rating - - - - - - - B - - - - - B+

Sun Threatens to Sink on Sun Healthcare: Along with its Long-term Care Brethren, Sun Feels Medicare Reform's Heat
Mergers and Acquisitions Report March 08, 1999

Much of the long-term care sector is highly leveraged and the potential for lower revenue from Medicare payments has pushed bond prices and credit ratings down recently. Last Wednesday, Standard & Poor's lowered the subordinated debt credit ratings on Sun and four others, including Genesis Health Ventures Inc. and Integrated Health Services Inc., to CCC or CCC+.

Long-Term Care Providers Ail Healthcare Sector
Bank Loan Report March 15, 1999

After driving more than half of all leveraged loan issuance in 1997, health care credits-specifically in the long-term or post-acute care sector-are making investors more than a little queasy. The reason? A new restrictive Medicare payment method known as the prospective payment system, or PPS, has dramatically increased the asset volatility in the sector, sending market yields on new healthcare loans smashing through the roof and their trading values crashing through the floor.
- - - - the likes of Sun Healthcare was being bid for a paltry 60, while Genesis Health wasn't faring much better at 70.

COMMENT:- Genesis is weak and is seen as a takeover target, but few are strong enough to do so.

Analysts Call Deal Between Genesis Health, Cardinal Unlikely
Dow Jones Business News 03/26/99

* NEW YORK -(Dow Jones)- Shares of Genesis Health Ventures Inc. and Cardinal Health Inc. climbed Friday on rumors Cardinal Health would make an offer for Genesis, but analysts discounted the talk, calling such a deal unlikely.

Genesis Health Ventures Policy On Unusual Market Activity
Business Wire March 26, 1999

At the request of the New York Stock Exchange, Genesis Health Ventures Inc. (NYSE:GHV) was requested to comment on rumors and above-average trading volume in the Company's stock on Friday, March 26, 1999. The Company restates its policy not to comment on rumors and unusual market activity.

COMMENT:- Note that Genesis cut far fewer therapists than the other chains. Is this because they are further away from bankruptcy than the others or because they are genuinely trying to maintain services to patients.

Modern Healthcare April 12, 1999

Other long-term-care companies that have laid off up to 20% of their therapists include Atlanta-based Mariner Post-Acute Network, which cut 1,200 therapists; Fort Smith, Ark.-based Beverly Enterprises and Owings Mills, Md.-based Integrated Health Services, which eliminated 1,000 therapists each; and Kennett Square, Pa.-based Genesis Health Ventures, which cut 321 positions.

COMMENT:- The nurses have been in bitter conflict with Genesis and are very critical of the care they provide. The following article reflects some of that criticism. There is more on the page about care in Genesis facilities. The company strongly denied nurses claims and attacked them as being self interested and making allegations only to further their industrial claims.

Should we believe corporate staff when corporate claims by other corporations have repeatedly been shown to be false, or the nurses whose assertions have repeatedly been shown to have substance? Note that the web site mentioned can no longer be accessed. The SEIU has prepared a number of reviews which address the same concerns. Some extracts are supplied on this page and others on a separate page dealing specifically with the SEIU's concerns about care.

Union Establishes Special Web Site to Track Performance of Nation's Fifth Largest Nursing Home Chain
PR Newswire April 26, 1999

"Company's Performance Doesn't Measure Up to the Hype"

Washington, DC --The nation's largest health care union unveiled a web site today devoted to examining the operations and performance of Genesis Health Ventures (NYSE:GHV), one of the biggest publicly traded companies in the nursing home industry.

The Service Employees International Union (SEIU) has launched the Inside Genesis Health Ventures web site to help the company's shareholders, industry analysts, and other market watchers understand the increasingly complex world of Genesis' finances, marketing and performance. Genesis is the nation's fifth largest nursing home chain.

The web site address is Comments or information can be e-mailed to

"Genesis is regarded by some as representing the future of the nursing home industry in this country," said SEIU President Andrew L. Stern. "But our research shows that the company's performance doesn't measure up to the hype."
* How institutional investors began fleeing Genesis stock after the company announced a complex and risky transaction involving Multicare Inc. in October 1997. ("Institutional Investors Cut Their Losses on GHV," Vol.1 No.1)

* How GHV kept $1 billion in future liabilities implicit in the Multicare deal off their books, rendering GHV's current book value per share, "meaningless." ("Deciphering the Multicare Deal," Vol.1 No.2)

* How the company's effort to establish the "definitive brand name in eldercare services" is foundering on media reports of serious patient care problems in a number of its nursing homes. ("Genesis ElderCare Branding Strategy: Is It Working?," Vol.1 No.3)

* How GHV lost $4.4 million with its purchase of 1,000,000 call options on their own stock. ("Did GHV Management Speculate In Its Own Stock?," Vol.2 No.2)

Outcry Grows Over Nursing Home PPS Losses, But Some Are Doing Fine.
Medicine & Health April 26, 1999

Perhaps the most dramatic evidence of the new straightened circumstances in which nursing home owners find themselves was the decision last month by Standard & Poor's to lower the debt ratings on five major operators: Genesis Health Ventures, Integrated Health Services, Mariner Post-Acute Network, NovaCare, and Sun Healthcare Group. Those five were singled out because they are highly leveraged and S&P said it had worries about "the increasing impact of PPS on corporations laden with substantial debt."

The notice of the downgrading in creditworthiness noted that "since November, earnings reports, company announcements, and reviews with corporate management have confirmed Standard & Poor's position that developing operating conditions will severely test the financial strength of industry participants." Evidence has been gathering of just how right S&P was.

COMMENT:- Note the comment about the new funding system being being like capitated Managed Care. It certainly stops the pressure to overservice. Like Managed care it also introduces new pressures to underservice and deny care. As extensive material on this www site shows this has been happening for years to those aged care services (e.g. basic nursing) provided under capitation like payments.

Federal Pay Rules Hit Nursing Homes :::: Market Slams Publicly Traded Firms Squeezed by Reimbursement Rules
The Daily Record (Baltimore, MD.) May 3, 1999
Bob Keaveney; Daily Record Business Writer

Ever since the so-called Prospective Payment System (PPS) took effect for most nursing facilities in July, long-term care providers have been complaining that they aren't being paid enough.

As a result, the stocks of the public companies that provide these services, including Genesis, the Pennsylvania-based owner of 26 Maryland nursing homes; Owings Mills-based Integrated Health Services; and HCR Manor Care of Toledo, Ohio, have dropped like stones since last summer.
Meanwhile, Industry officials and advocates for the elderly say basic medical needs will go unfilled by companies that can't afford to perform them at a loss.

Stark contrast

PPS is to the nursing home industry what the early days of managed care were to hospitals and other acute care providers.

Designed to reimburse the providers on the basis of what care should cost, rather than what it actually costs, PPS provides health care facilities up-front, per-day payments similar to "capitated" managed care plans.
"The Prospective Payment System is a sound concept, in the sense that it keeps facilities focused on cost management, as opposed to the old system," in which the government "pretty much" would pay whatever providers billed, said Jerry Bowen, chief financial officer of Stella Maris, the state's second-largest nursing home.

Company Press Release :::: NeighborCare Announces Cardinal Health Contract
Thursday May 6, 6:02 am Eastern Time

BALTIMORE, Md.--(BW HealthWire)--May 6, 1999--NeighborCare(SM), the wholly-owned pharmacy subsidiary of Genesis Health Ventures, Inc. (NYSE:GHV - news), announced today that it has selected Cardinal Health, Inc. (NYSE:CAH - news) as its primary pharmaceutical supplier.

The 5-year contract calls for Cardinal to supply NeighborCare's 36 professional retail and 74 long term care pharmacies. Last year, NeighborCare purchased approximately $500 million worth of pharmaceuticals.
NeighborCare, with annual revenues of $900 million, serves more than a million customers in 41 states including over 240,000 long term care customers. The Company's professional and long term care pharmacies, medical supply centers, infusion therapy services, and home medical equipment facilities are an integral part of the Genesis ElderCare(SM) Network.

Genesis earns fall short of street, stock tumbles
Reuters Thursday May 6, 1999 :: 7:08 pm Eastern Time

KENNETT SQUARE, Pa., - Genesis Health Ventures Inc. (GHV - news) posted a second quarter loss on Thursday and failed to meet Wall Street's expectations for a profit as changes in Medicare distribution payments took their toll on revenues.

Genesis said it had a net loss after charges of $11.08 million dollars, or 31 cents per share, for the quarter ended March 31, vs. a profit of $14.57 million, or 41 cents per share, in the year-ago period.

Even excluding one-time charges, the long term care company had an operating loss of nine cents per share, well below analyst consensus of 20 cents per share profit, according to tracking firm First Call Corp.

The results stopped short a recent upward trend of Genesis shares, which on Thursday afternoon tumbled 15 percent, or $1.06, to $5.875, making it the largest percentage loser on the New York Stock Exchange.

COMMENT:- How do you maintain reasonable standards of care when facilities and their staff are being passed around like a parcel between groups which all have different management styles, different arrangements with staff, and different approaches to care? This goes on all the time - see below. Corporate policies also change in response to market fashions, market pressures and political tinkering. Patients are the meat in the sandwich.

A HELPING HOME: A special report.; A Niche for the Elderly, and for the Market
The New York Times May 9, 1999

More Older People With More Money

Five years ago, Massachusetts had fewer than a dozen assisted-living centers. Today it has 115 and more on the way as national chains and local hospitals compete for a piece of the market.

The brief history of Heritage at Framingham suggests the ferment within the industry, one that promises its customers stability and support at a critical stage in their lives.

Heritage was built in 1995 by a developer, ADS Senior Housing, in conjunction with a local nonprofit hospital, Metrowest Medical Center. Hospitals increasingly see assisted- living centers as sources of patients.

The Metrowest Medical Center then spun off a nonprofit corporation that included Heritage.

ADS Senior Housing, meanwhile, which was managing Heritage, was bought by the Multicare Companies Corporation, which owned and managed nursing homes. Multicare was then bought by the larger Genesis Health Ventures of Kennett Square, Pa. A division, Genesis Elder Care, now manages Heritage.

New Hampshire
Nursing homes feel the pinch of federal Medicare changes
The Associated Press State & Local Wire May 19, 1999

Genesis and at least two other companies have taken a financial beating recently, largely because of a new payment system for Medicare, federal health insurance for the elderly.

Donald Shumway, the state's health and human services commissioner, warned this week that some national chains could run out of money or even go through bankruptcy reorganization.

He considers all 2,250 beds in the state's nationally owned nursing homes at risk.

Bonds to run away from ::::: Capital Markets
FORBES June 14, 1999

The very troubled Vencor recently failed to make a $14.8 million coupon payment; don't be shocked if Sun Health Care Group and MedPartners have similar trouble. Nursing home operators like Genesis Health Ventures, Integrated Health Services and Mariner Health have all been further downgraded.

Nursing Home Industry's Financial Crisis Threatens Patient Care
The Washington Post June 19, 1999

Much of the nation's nursing home industry is in such dire financial straits that regulators and other observers are worried about the care elderly residents will receive.
The companies hurting the most blame their financial woes chiefly on a new, stricter Medicare payment system that began coming online about a year ago. The system was intended to keep the federal health insurance program from going broke. Having structured themselves to take advantage of the old system's largesse, some firms were ill-prepared for the change.

A series of mergers and acquisitions in recent years and an accumulation of debt had left the industry in a precarious position, analysts said.

"Basically they've been expanding much too fast . . . and it sort of backfired on them," bond analyst Frank Bianco of McMahan Securities said of nursing home chains. "I'd say that had they not expanded to the extent they did they'd probably still be in good shape now," Bianco said.
For companies such as Vencor and Genesis Health Ventures Inc., the average daily payment for a Medicare patient declined by more than 20 percent during the first quarter of 1999, compared with a year earlier. For Genesis, the average sank from $ 393 to $ 312.

COMMENT:- Note that the following three articles describe extra services provided by Genesis. These bring in money and do not require any capital.

Being the specialist resource for a web site providing information to prospective patients offers endless opportunities to influence their perceptions and bring them into your homes. This will certainly be presented as objective and it is unlikely that those who access SolutionsMD will recognise the conflict of interest.

Genesis Health Ventures Announces Strategic Partnership with Cybear, Inc.
PR Newswire June 21, 1999

Genesis Health Ventures(SM), Inc. (NYSE: GHV), a leading provider of eldercare services, today announced a partnership with Cybear (Nasdaq: CYBA), an internet-based healthcare communications technology company making Genesis Cybear's official eldercare resource for SolutionsMD.

Genesis Takes Over Management of 12 New England Skilled Nursing Centers
/PRNewswire July 23 1999

KENNETT SQUARE, Pa., -- Genesis Health Ventures, Inc. (NYSE: GHV) announced today that it will take over the day-to-day operation of 12 Massachusetts and Connecticut skilled nursing centers pursuant to management contracts with The Frontier Group and Omega Healthcare

COMMENT:- The SEIU is the union which has repeatedly exposed the problems in care and in staffing across the nursing home industry. Its warnings, initially ignored are now seen to have been well founded.

Despite more money, some Connecticut nursing homes headed for trouble
The Associated Press State & Local Wire July 29, 1999

"I suspect we're going to see quite a lot of bankruptcies in nursing home industry," Chernoff (SEIU spokesperson) said. "It appears in many cases the change in Medicare reimbursement may really have tipped the balance for some homes that may have been somewhat financially stretched to begin with."
The Chapter 11 bankruptcy filing of a Boston-based company is affecting eight other nursing homes around the state, as well as a home health care business and a temporary health care staffing agency.

Frontier Group had owned and operated eight homes in Connecticut under the name Center for Optimum Care: two in New Haven and one each in Danielson, Griswold, Waterford, West Hartford, West Haven and Willimantic.

The homes in Griswold, New Haven, West Haven and West Hartford are now under the ownership of Omega Healthcare Investors, a Michigan company that held the mortgages on the nursing homes. Omega has put Genesis Health Ventures in charge of the homes' day-to-day operations.

The company has no plans to sell or close the three remaining homes, said spokeswoman Meghan Chandler.

COMMENT:- Genesis gets some badly needed cash from its two Multicare partners.

Genesis Health Ventures Announces Revision of Multicare Joint Venture; The Cypress Group and Texas Pacific Group to Invest $ 50 Million in GHV
Business Wire August 2, 1999, Monday

Genesis Health Ventures Inc. (NYSE:GHV) announced today it has reached an agreement in principle with The Cypress Group and Texas Pacific Group (TPG), its co-investor partners in Genesis ElderCare Corp. (the joint-venture parent of The Multicare Companies), to simplify the joint-venture structure, accelerate the integration of Genesis and Multicare, and strengthen the financial position of both entities. Under the agreement in principle, Cypress and TPG will invest $50 million into GHV in exchange for 12.5 million newly issued common shares and 2 million warrants with a $ 5.00 exercise price. In addition, Cypress and TPG will

PHILADELPHIA INQUIRER August 3, 1999, Tuesday

Genesis Health Ventures indicate two investor groups will invest $50 million in Genesis to increase their stake and simplify a joint-venture agreement (S)

Multicare Reports Third Quarter Fiscal 1999 Results
Business Wire August 4, 1999, Wednesday

The net loss for the quarter ended June 30, 1999 was $8.5 million compared to net income of $1.5 million for the corresponding period in the prior year.

COMMENT:- Genesis and its chairman were among the most active in pressing politicians to reverse the 1997 Medicare legislation. They are well represented on delegations, committees etc. They have the advantage that they have not been accused of overcharging or fraud.

Genesis Health Ventures CEO Praises Introduction of S.1500
PR Newswire August 5, 1999, Thursday

Genesis Health Ventures, Inc. (NYSE: GHV) Chairman and Founder, Michael R. Walker, announced today in reaction to Senator Orrin Hatch's introduction of S.1500: "Senator Hatch's bill is one of the first positive steps we have seen toward correcting health care access problems caused by the Balanced Budget Act and flawed implementation of the Medicare Prospective Payment System.

As a provider of health services in 16 states, we have seen Medicare PPS wreak havoc on the entire eldercare delivery system -- especially for medically complex patients coming directly from hospital stays who need extensive treatment to get back on their feet. We serve over 1,000 of these medically complex patients on a daily basis and welcome the additional resources Senator Hatch's bill provides for their care.

We also applaud the 66 additional Senators of both parties who recently wrote to Health and Human Services Secretary Donna Shalala urging her to fix Medicare PPS problems. We urge all members of the U.S. Senate to support the Hatch bill.

By fixing the PPS-induced Medicare problems immediately, we are insuring the current and future health care system remains viable for elders across the United States."

SOURCE Genesis Health Ventures, Inc.

Genesis Health Ventures Files Preliminary Proxy Regarding Revision of Multicare Joint Venture
Business Wire September 16, 1999, Thursday

1999-- Genesis Health Ventures, Inc. (NYSE: GHV) announced today it has filed a preliminary shareholder proxy with the Securities and Exchange Commission in connection with the revision of the Multicare joint venture. If approved, The Cypress Group (Cypress) and Texas Pacific Group (TPG) will invest $ 50 million into GHV in exchange for 12.5 newly issued common shares and 2 million warrants with a $ 5.00 exercise price.

Fuquay, Aleshire, Bowen & Co. Texas Pacific Group invests in nursing home venture
THE FORT WORTH STAR-TELEGRAM September 20, 1999, Monday

Texas Pacific Group, the big investment group with offices in Fort Worth and San Francisco, will team up with The Cypress Group to invest $ 50 million in Genesis Health Ventures, operator of 342 nursing homes in 16 states in the East.

Like most other nursing home companies, it has been hammered by the 1997 Balanced Budget Act, which cut Medicare reimbursements.
Its stock is down about 80 percent in the past year to about $ 2.75. The company is trying to reduce its debt by $ 200 million.

TPG and Cypress will get 12.5 million shares for their investment, or $ 4 a share. They also will get 2 million warrants - right to purchase shares in the future - that are exercisable at $ 5. TPG also jumped into Magellan Health Services , the behavioral health company in which Richard Rainwater and his wife, Darla Moore, began investing in 1995. The couple currently owns 19 percent of Magellan's shares.

Last month, TPG disclosed that it will invest $ 75 million in Magellan for preferred stock.

COMMENT:- This is the same Rainwater (and his wife Darla Moore) who founded Columbia/HCA?

Firm denies claims of insolvency;
The Tampa Tribune October 16, 1999, Saturday,

TAMPA - Nursing home chain Genesis Health Ventures Inc. declares its strength in reply to a report on financially troubled nursing home operators.

A Pennsylvania company Friday protested its inclusion on a Florida list of financially troubled nursing home operators.

And Genesis Health Ventures Inc. lashed back at a report that it's considered on the verge of bankruptcy.

"We're not going bankrupt," said Lisa Salamon, spokeswoman for the company that has 30 nursing homes and assisted living facilities in Florida.

Salamon said Genesis was busy Friday with panicked calls from employees, patients and vendors after The Tampa Tribune noted industry observers see Genesis as a candidate to join other nursing home chains seeking bankruptcy protection.

COMMENT:- The figures below probably represent the stage each company is at on the slide into bankruptcy. Those below Genesis are already in Chapter 11 or very close.

Medicare cuts: Industry taking a big hit; Home health care agencies, hospitals and nursing homes are still reeling
The Atlanta Journal and Constitution October 31, 1999,


Selected Public Companies:.1/2/98..........Now..........Pct.change

Manor Care. ............................... $ 40......... .......$ 15.75........... -60.9%
Beverly Enterprises. ................$ 13.06 1/4.....$ 3.93 3/4.......-69.9%
Centennial HealthCare. ... .........$ 22.50.............$ 2.50..............-88.9%
Genesis Health Ventures............$ 26.50.............$ 1.75..............-93.4%
Integrated Health Services....... $ 32.12 1/2......28 cents.. ........-99.1%
Vencor. ..................................... $ 29.37 1/2* ..17 cents........... -99.4%
Mariner Post-Acute Network... $ 19.00.............. 9 cents........... -99.5%
Sun Healthcare Group...... $ 19.81 1/4.. ..............6 cents............-99.

*price on April 8, 1998

GHV Shareholders Approve Multicare Revision
Business Wire November 11, 1999, Thursday

Nov. 11, 1999-- Genesis Health Ventures (NYSE:GHV) announced today that shareholders approved the restructuring of the Company's Multicare joint venture agreement. The restructuring, which simplifies the Multicare joint-venture and accelerates the integration of Genesis and Multicare, is expected to be closed on or around November 15--pending state regulatory approvals. It also satisfies certain material conditions for an additional $ 40 million in bank capacity for GHV. In addition, GHV reports that delevering activities are in process which are expected to realize an additional $ 175 million in net proceeds.

COMMENT:- ElderTrust was formed by Genesis and earns its income by leasing facilities to Genesis. If Genesis can't pay its lease then ElderTrust will be in serious trouble.

ElderTrust Addresses Genesis Restructuring
PR Newswire November 11, 1999, Thursday

ElderTrust (NYSE: ETT), an equity healthcare REIT, today addressed the restructuring plan (Plan) approved today by the shareholders of Genesis Health Ventures, Inc. (NYSE: GHV), ElderTrust's most significant customer. Among other things, the Plan settled a significant liability incurred by Genesis for the acquisition of The Multicare Companies, Inc. Under the Plan, this liability will be resolved through the issuance by Genesis of additional equity securities. In addition, the new equity holders will contribute $50 million into Genesis.

"Settling the Multicare acquisition liability is a significant achievement for Genesis and we applaud the efforts of all involved," said D. Lee McCreary, Jr., ElderTrust's President and Chief Executive Officer.

Integrated Health Services reports $1.8 billion third-quarter loss
The Associated Press State & Local Wire November 16, 1999,

Two of IHS' competitors have already sought bankruptcy protection, and a third, Genesis Health Ventures of Pennsylvania, which has substantial operations in Maryland, barely staved off the same fate.

COMMENT:- Genesis is low looking for buyers so that it can unload facilities in return for cash to pay off its loans. Buyers with this sort of money are in short supply. Note that the banks are not lending money to anyone wanting to buy nursing homes. Hoosier gets money elsewhere.

Hoosier's Growth Spurt Health Nonprofit to buy from For-Profit Chain
The Bond Buyer November 17, 1999, Wednesday

Nonprofit, Indiana-based Hoosier Care Inc. will bring $113 million of unrated, tax-free debt to market tomorrow to pay for the acquisition of nursing care facilities from a for-profit company, an ownership change that several health care market players believe is on the rise.

Hoosier Care will use bond proceeds to buy 14 nursing homes from the Multicare Companies Inc., including nine in Illinois and five in Wisconsin. The Wisconsin Health and Educational Facilities Authority will sell $32 on the group's behalf, and four Illinois cities and a regional authority will act as issuers on the remaining $81 million.
Other nonprofits in the Midwest's long-term health care business are undergoing similar growth spurts, according to market professionals familiar with the sector. Consequently, the groups are electing more and more to finance their acquisitions with tax-free debt.

Bankers and analysts attribute the increase in deals to a greater availability of nursing homes stemming from for-profit companies that have sought to unload them. "It's a trend we are seeing as large national chains are struggling and looking for divestiture," said Lawrence Nines, executive director of the WHEFA, conduit issuer on the Wisconsin portion of Hoosier's issue.

Genesis Health Ventures Reports Fourth Quarter and Fiscal 1999 Results
Business Wire December 2, 1999, Thursday 06:17 AM Eastern Time

Net loss before extraordinary items and excluding impairment of assets and other charges was $17.5 million for the fiscal year ended September 30, 1999 compared to net income before extraordinary items and special charges of $53.1 million for the comparable period in the prior year.

COMMENT:- At some stage in the past Manor Care, another chain acquired a share in Genesis. It seems it is not being paid and Manor Care's contract has some remedies for this.

Manor Care Comments on Legislative News, the Genesis Dividend and Fourth-Quarter Expectations
Business Wire December 7, 1999, Tuesday

Mr. Ormond (from Manor Care) also said, "With regard to the company's investment in Genesis Health Ventures Series G Preferred Stock, Genesis has not paid Manor Care cash for the dividends that were due in March, June or September 1999. In the event that Genesis does not pay a cash dividend for December 1999, the preferred instrument provides that future dividends be paid-in-kind' until Genesis has paid the 1999 dividends in cash. Because of this, Manor Care does not plan to accrue as current income dividend amounts received in the year 2000 as pay-in-kind' dividends. Manor Care and other Series G Preferred shareholders will be permitted to name two additional members to the Genesis Board of Directors following the fourth consecutive quarter of non-payment of cash dividends.

CareFirst BlueCross BlueShield and Genesis Health Ventures Announce Joint Venture
PR Newswire December 9, 1999, Thursday

Genesis Health Ventures (NYSE: GHV) today announced new agreements with CareFirst BlueCross BlueShield which extend their business relationship for nursing facilities for a three year period and extends their relationship with Genesis pharmacy subsidiary, NeighborCare, for a two year period with an option for a third year.

Under the agreements, Genesis skilled nursing facilities will furnish eldercare services to CareFirst customers as its preferred provider. NeighborCare will continue as CareFirst's exclusive provider for home medical equipment, respiratory therapy, home infusion and home nursing services for 370,000 FreeState Health Plan members.

Loan Market Week December 13, 1999

Bids for Genesis Health Ventures' bank debt jumped up by 5 points last week, fuelled by positive earnings numbers released earlier this month. Bids rose to 70-72 from 65, traders noted. "The numbers were a little better than expected, and they reflected some semblance of stability at the company," noted one dealer. Mellon Bank leads Genesis' $ 1.1 billion credit.

Company notes
Modern Healthcare December 20, 1999, Monday

Citing deteriorating operating results, Moody's Investors Service downgraded its ratings on Kennett Square, Pa. -based Genesis Health Ventures and Multicare Cos., in which Genesis has a 57% stake through a joint venture with an investor group.

Loan Market Week December 20, 1999

An original lender auctioned off $ 10 million of Genesis Health Ventures' bank debt last week at 73, taking advantage of the paper's recent strengthening to cut its holding in the credit, dealers said.

COMMENT:- Note the last paragraph in the next article. That the for profit market based health system has failed has been obvious for years and what we are confronted with is a state of "paradigm stall,". In other words no one with any power is in a position to think outside the current market paradigm and consequently there are no serious attempts to solve the fundamental problem. Despite this the USA continues to export this failed system through the World Trade Organisation (WTO) in order to force others to adopt it. Australia has been a gullible ally and done its best to set up the same system.

Long-Term Health Despair
The Motley Fool (Dec. 21, 1999)
Brian Graney (TMF Panic)

(Dec. 21, 1999) --For the second year in a row, it was a tough year to be a publicly traded long-term healthcare provider. The entire industry, and the skilled nursing facility segment in particular, was among the worst performing sectors in the market in 1999, which is not too surprising considering that most of these companies also had their heads handed to them in 1998 as well. The one-two punch of Medicare reimbursement cutbacks and governmental fraud investigations sent the shares of nursing home operators crashing down as earnings dried up and investors ran away from the business. As the year draws to a close, many operators are in critical condition financially, with several already having slipped into full-out bankruptcy comas.

The destruction has been startling, as the following chart shows:

Company............. .....................52-Week High ...12/10/99 Price....% Decline

Beverly Enterprises (NYSE: BEV) ........$8 3/16 ....................$3 7/8 ...........................-52%
Manor Care (NYSE: HCR) ......................$33 1/2 ....................$16 1/16 ......................-52%
Genesis Health Ventures (NYSE: GHV) ....$9 1/2 ...................... $2 3/8 ....................... -75%
Centennial HealthCare (Nasdaq: CTEN) ..$15 9/16 ................. $2 15/16 .....................-81%
Integrated Health (NYSE: IHS) ..............$14 11/16 ................$9/32 ...........................-98%
Vencor (OTC BB: VCRI) .........................$5 ................................$0.085 .........................-98%
Mariner Post-Acute (OTC BB: MPAN) .$6 3/8 ........................$0.09 .............................-99%
Sun Healthcare (OTC BB: SHGE) ...........$6 7/8 ........................$0.04 .............................-99%

For the most part, the companies that find themselves in bankruptcy proceedings and trading in the pink sheets can only blame the government to a certain extent for their inglorious fates. An emphasis on the most risky patient profiles produced high levels of Medicare reimbursement revenues when the going was good for these firms in the early 1990s. Go-go growth investors piled on as the companies shifted gears into all-out consolidation mode in the middle of the decade, a strategy that produced not only higher earnings but enormously leveraged balance sheets in the process. Between 1995 and 1998, the buying spree effectively dwindled the number of publicly traded nursing home operators from 28 to 10.
The result? An industry-wide rash of earnings warnings in late 1998 was accompanied by staff reductions, asset sales, and operational cost-cutting measures by the most highly leveraged firms. Stock prices sank as the full effects of the Medicare spending cutback ripped through the nursing home industry like a super-caffeinated strain of the Ebola virus. Meanwhile, the government further put the screws to the industry by opening up Medicare billing fraud probes at several operators, including Beverly, Centennial, and Vencor, scaring away even more investors.
If anything, the recent history of the long-term care industry underscores the true uneconomic nature of the current American healthcare system and the need for reform if for-profit medical care is ever to work as a viable, long-term business. Some observers have suggested that the U.S. healthcare system at the close of this century is in a state of "paradigm stall," where anyone with any sense at all understands that the current model doesn't work economically but no one seems to know what to do about it. From an investing standpoint, such a situation is undesirable and offers little opportunity for market-beating performances by companies trying to make a business out of healthcare delivery over the long-term.

IHS expansion leads to Chapter 11
Modern Healthcare February 7, 2000, Monday

The bankruptcy filing last week by one of the nation's largest post-acute-care companies was the sharpest nail yet in the coffin of diversification.
The survivors in the long-term-care field are those that have stuck to their core businesses, analysts said.

For example, both Beverly Enterprises and Manor Care earn most of their revenue from the nursing home business, with very little from ancillary services. By contrast, Genesis Health Ventures, which analysts say has avoided insolvency in part through recently completing a partial buyout by an investor group, is heavily into the pharmacy and therapy contracts business.

COMMENT:- Manor Care realises that its investment in Genesis is not worth much now.

Manor Care Reports 1999 Fourth-Quarter Earnings
PR Newswire February 10, 2000, Thursday

At year end, a reserve was recorded against the four quarters of dividends accruing from the Genesis Health Ventures (Genesis) Series G Convertible Preferred shares held by Manor Care subsidiaries. Additionally, following an independent valuation analysis of Genesis and the Series G shares, the company wrote down its investment of $293 million by $274 million.

Loan Market Week February 21, 2000 

Genesis Health Ventures' bank debt traded down last week as investors reacted to poor first quarter results that revealed a $ 450 million loss. As much as $ 5 million traded in the Street at 63 last week, down from 70 two weeks ago, according to one dealer. He noted the price is also dropping because of concerns about the entire health care industry. Officials said the conversion to Medicare's prospective payment system has cut into company revenues, making it difficult for them to balance their books. "The whole industry is under pressure," noted one trader.

Standard & Poor's Announces Changes In S&P Indices
PR Newswire February 22, 2000, Tuesday

Standard & Poor's will make the following changes in the S&P MidCap 400 and S&P SmallCap 600 Indices: -- Deltic Timber (NYSE: DEL) and Saga Systems (NYSE: AGS) will replace Players International (Nasdaq: PLAY) and Genesis Health Ventures (NYSE: GHV) in the S&P SmallCap 600 Index after the close of trading on Wednesday, February 23, 2000.
Health Ventures is being removed for lack of representation·

Manor Care Comments on Legislative News, the Genesis Dividend and Fourth-Quarter Expectations
Business Wire December 7, 1999, Tuesday

Mr. Ormond also said, "With regard to the company's investment in Genesis Health Ventures Series G Preferred Stock, Genesis has not paid Manor Care cash for the dividends that were due in March, June or September 1999. In the event that Genesis does not pay a cash dividend for December 1999, the preferred instrument provides that future dividends be paid-in-kind' until Genesis has paid the 1999 dividends in cash. Because of this, Manor Care does not plan to accrue as current income dividend amounts received in the year 2000 as pay-in-kind' dividends. Manor Care and other Series G Preferred shareholders will be permitted to name two additional members to the Genesis Board of Directors following the fourth consecutive quarter of non-payment of cash dividends.

The Ailing NH NURSING Homes Industry
Business NH Magazine March 1, 2000


Experts point to three contributing factors. First, during the mid-1990s, a wave of nursing home acquisitions flooded the nation, and NH was no exception. By the end of the decade, 47 percent of NH's nursing homes were no longer independently owned.

There was a "fury to buy in 1994, '95, '96," says John Poirier, executive director of the NH Health Care Association, whose members include about 82 long-term care facilities in the state (most of the remaining facilities are government owned). Then the acquisition trend slowed, as the multi-facility owners got very large and had purchased most of the New Hampshire-based chains," such the 10 McKerley homes, acquired by Genesis Health Ventures. "Rather than negotiate one by one, they got economies of scale" by purchasing the chains, he says.

Now three of those national corporations Integrated Health Services, Vencor, Inc. and Sun HealthCare Group, Inc. - have filed for Chapter 11 bankruptcy protection. What happened?

"They put together business plans that assumed reimbursement levels would stay constant," Poirier says. Then along came the Balanced Budget Act of 1997, which threw a monkey wrench into those optimistic projections.

Golden years fade for nursing home chains; An industry booming only a few years ago struggles to survive
THE BALTIMORE SUN March 5, 2000, Sunday ,FINAL

"To meet our debt obligations, we have to sell some facilities," Walker (CEO of Genesis) said, "but banks won't lend to buyers."

The current crunch in the industry has its roots in the mid-1980s, when companies like Genesis and Integrated Health were getting started. They took nursing homes in a new direction -- a direction that made the term "long-term care" somewhat misleading.

American Health Line March 7, 2000

Despite closures and the "parade to bankruptcy court," some analysts are predicting that the financially ailing nursing home industry will "reorganize and survive" recent hardships, the Baltimore Sun reports. Noting that nursing homes remain about 90% full and pointing to Congress' recent vote to restore some of the 1997 Medicare cuts, Stephen Monroe, editor of SeniorCare Investor, said, "The bankrupt companies will emerge a little smaller. With less debt and restructured leases, they should be fine."

The Philadelphia Inquirer Loose Change Column
The Philadelphia Inquirer March 12, 2000, Sunday

AT THE COMPANY'S ANNUAL MEETING on Thursday, shareholders of Genesis Health Ventures will be asked to approve an unusual measure to deal with worthless stock options held by 600 directors, executives and administrative employees.

Shares of the beleaguered Kennett Square nursing home operator traded for close to $ 40 in October 1997, but they have been dropping ever since in an industrywide meltdown caused largely by cuts in federal Medicare payments. For the last eight months, shares have been trading below $ 4 and recently dropped below $ 2.

Because the average exercise price of options held by the executives and employees is a relatively astronomical $ 18.88, the holders had little hope of ever profiting from this supposed incentive.

So in November, the board approved a plan that allows the employees, many of whom work on the front lines managing nursing homes, and executives to exchange their "under the water" options for unrestricted shares of stock.

The company had little else to offer its managers as an incentive to stay, spokeswoman Lisa Salamon said.

The plan affects 2.3 million options held by directors and executives and 4.5 million options held by employees.

COMMENT:- Unable to pay interest on its loans Genesis tries to renegotiate terms -- and then Multicare follows.

( BW)(PA-GENESIS-HEALTH)(GHV) GHV Begins Debt Restructuring Discussions
Health & Medical Writers/Business Editors

KENNETT SQUARE, Pa.--(BW HealthWire)--March 21, 2000--Genesis Health Ventures, Inc. (NYSE:GHV) announced today that it has begun discussions with lenders under its Senior Credit Agreement to revise the company's capital structure.

The company also announced it did not make a $3.8 million interest payment under its Senior Credit Agreement led by Mellon Bank, Citibank, Bank of America and First Union due yesterday and it has requested a grace period while discussions on an overall restructuring take place.

Genesis reported it does not expect to make scheduled interest and principal payments on its Senior Credit Agreement or interest payments on subordinated debt during the discussion period.

Multicare Begins Debt Restructuring Discussions
(BW HealthWire)--March 21, 2000

KENNETT SQUARE, Pa.--(BW HealthWire)--March 21, 2000--The Multicare Companies, Inc. announced today that it has begun discussions with lenders under its Senior Credit Agreement to revise the company's capital structure.

Multicare reported it does not expect to make scheduled interest and principal payments under its Senior Credit Agreement led Mellon Bank, Citibank, Bank of America, and First Union or interest payments on subordinated debt during the discussion period. Multicare has requested a grace period while discussions on an overall restructuring take place. The company's next senior bank debt payment is scheduled for March 29.

ElderTrust Addresses Announcements by Genesis Health Ventures and The Multicare Companies
PR Newswire March 21, 2000, Tuesday

ElderTrust (NYSE: ETT), an equity healthcare real estate investment trust, today addressed announcements made by Genesis Health Ventures, Inc. (NYSE: GHV) and The Multicare Companies, a 43.6% owned consolidated subsidiary of Genesis. Each of these companies today announced the beginning of debt restructuring discussions with the intention of revising their capital structures. Genesis also announced that it did not make a $3.8 million interest payment to its senior debt lenders due March 20, 2000. Both Genesis and Multicare announced their intention not to make interest and principal payments on senior debt and have been prohibited by their senior lenders from making any scheduled interest payments on their publicly traded subordinated debt. Each company cited their inability to sell assets due to the lack of long-term care market financing and the continuing effect of reduced Medicare payments as the causes of these actions.

Kennett Square, Pa.-Based Health-Care Firm Falls Behind on Debt
The Philadelphia Inquirer March 22, 2000, Wednesday

Genesis Health Ventures Inc. said yesterday it failed to make a $ 3.8 million interest payment on its senior debt, due Monday to a group of lenders led by Mellon Bank.

The struggling long-term health-care provider, based in Kennett Square, said it is talking with the lenders about obtaining a grace period for repayment. It also said it retained Merrill Lynch & Co. to advise it on restructuring its assets.

Genesis did not specify what strategies it may consider. In general, restructuring assets can involve selling or closing some operations, or layoffs.

Genesis' credit rating falls to 'D' after missed payment; Moody's downgrades nursing home chain
THE BALTIMORE SUN March 23, 2000, Thursday ,FINAL

Genesis Health Ventures Inc., a nursing home chain with about 50 homes in Maryland, has had its credit rating lowered after it failed to make a $3.8 million interest payment due Monday.

Genesis, based in Kennett Square, Pa., had its corporate credit and bank loan rating downgraded to "D" - - the lowest rating -- from "B" by Standard & Poor's. A "D" rating signifies a company in default on some of its payments.
Some analysts said the restructuring effort could be a prelude to a filing for bankruptcy protection.

Bad Health Loan Prompts A Credit-Quality Checkup
The American Banker March 27, 2000, Monday

Some analysts are taking a closer look at credit quality specifically in health-care lending -- after four major banks were forced to restructure their loan to the ailing Genesis Health Ventures Inc. in Kenneth Square, Pa.

Units of Mellon Financial Corp., Citigroup Inc., Bank of America Corp., and First Union Corp. have an estimated $50 million apiece of credit exposure as the lead lenders in a syndicated loan to Genesis.

Institutional Investor, Inc. ::::: Loan Market Week April 10, 2000

As much as $20 million of Genesis Health Ventures' bank debt traded last week with dealers pointing to the company's strong management as a reason for the credit's popularity. The credit traded up to 54 from about 48 previously, with sources reporting that at least $17 million of the paper was sold in a single trade.

Loan Market Week April 17, 2000

The continuing positive sentiment about Genesis Health Ventures' drug distribution business saw its bank debt tick up, with around as $10 million traded up to 56 in the secondary market, from levels of 54 two weeks ago.

Genesis Health's troubles infecting ElderTrust REIT
Philadelphia Business Journal April 21, 2000

KENNETT SQUARE - ElderTrust, the health-care real estate investment trust, is facing uncertain times because of close ties to its biggest tenant, the floundering and debt-laden Genesis Health Ventures Inc.

Genesis is in the midst of restructuring $1.5 billion of debt, including $775 million that is owed by its nursing home affiliate, Multicare Cos. Inc.

The situation facing Genesis and its subsidiary has placed ElderTrust in a precarious position because 70 percent of its assets are leased to or managed by Genesis. The companies share an office building in Kennett Square.
"Any failure by Genesis or Multicare to continue making payments to the company could have a significant, adverse effect on the company's financial position, results of operations and cash available for distribution, could adversely effect the ability of the company to maintain distributions at current levels or at all and could adversely effect the ability if the company to meet its own debt obligations," the report said.

Genesis reports a loss after restructuring costs; Operator of 50 nursing facilities in Maryland has optimistic outlook; Nursing homes
THE BALTIMORE SUN May 5, 2000, Friday ,FINAL

Genesis Health Ventures, trying to avoid bankruptcy by renegotiating terms with its lenders, reported a loss of $21.5 million, or 44 cents a share yesterday, for the quarter ended March 31, after a number of one-time restructuring charges. The result was in line with analysts' expectations.

Based in Kennett Square, Pa., Genesis operates about 50 nursing homes in Maryland.

Beverly's earnings rose a bit in quarter
Modern Healthcare May 8, 2000, Monday

Meanwhile, Genesis Health Ventures, Kennett Square, Pa., lost $54.9 million, or $1.13 per share, on revenue of $604.8 million in its second quarter ended March 31. Figures for the year-ago quarter were not available.

Genesis, which operates 338 nursing homes in 16 states, has defaulted on interest payments and is negotiating a restructuring of its debt.

GHV Secures 40 Day Forbearance Extension; continues working with senior lenders to develop restructuring plan
Business Wire May 16, 2000, Tuesday

Genesis Health Ventures, Inc. (NYSE:GHV) announced today that a required majority of lenders under its Senior Credit Agreement have agreed to an extension of the company's current forbearance period through June 30, 2000.

During the forbearance period Genesis is working with financial advisor Merrill Lynch and certain senior lenders to revise the company's capital structure.

Multicare Secures 40 Day Forbearance Extension; continues workingwith senior lenders to develop restructuring plan
Business Wire May 16, 2000, Tuesday

The Multicare Companies, Inc. announced today that a required majority of lenders under its Senior Credit Agreement have agreed to an extension of the company's current forbearance period through June 30, 2000.

Multicare Reaches Agreement to Sell 14 Facilities in Ohio
Business Wire May 16, 2000, Tuesday

The Multicare Companies, Inc. announced today that, pending senior lender and regulatory approvals and other closing conditions, it has agreed to sell all of its Ohio eldercare facilities to Trans Healthcare, Inc. (THI) of Camp Hill, PA for $36.5 million in cash.

Long-term homes here part of sale; Purchase means mgmt. shift for four area care facilities
Crain's Cleveland Business May 22, 2000, Monday

Four Greater Cleveland nursing homes are about to trade hands as the shakeout in the nursing home business continues.

Berea Quality Care, Chardon Quality Care, Kent Quality Care and The Northwestern, a Berea nursing home, are set to be purchased by Trans Healthcare Inc., a Camp Hill, Pa., long-term care company. The homes, owned by Multicare Cos., a Kennett Square, Pa.-based nursing home operator, will be acquired by May 31 as part of a larger, $36.5 million transaction that includes five nursing homes in southern Ohio.

"We're an acquisition-driven company," said Anthony Misitano, president and chief executive of Trans Healthcare. "It's a decent time for a company like ours to take advantage of opportunities that become available" to acquire nursing homes, Mr. Misitano said.

For the record
Modern Healthcare May 22, 2000, Monday

*Genesis may file for bankruptcy. Genesis Health Ventures, which since March has withheld interest payments to lenders while it negotiated a restructuring of its $2.6 billion debt, said in papers filed last week with the Securities and Exchange Commission that it may need to seek bankruptcy protection. In return for payment of some of the interest owed, the bank group has extended its forebearance period on interest payments from the Kennett Square, Pa.-based company and its 44%-owned subsidiary, Multicare Cos., to June 30. Together the companies operate about 340 nursing facilities in 17 states.

Multicare Sells 14 Ohio Facilities
Business Wire June 2, 2000, Friday

The Multicare Companies, Inc. announced today that Trans Healthcare, Inc. (THI) of Camp Hill, PA has purchased all its Ohio operations for $36.5 million in cash.

COMMENT:- After all its protests and anger at suggestions it was financially unsound and a likely bankrupt Genesis goes into Chapter 11. Multicare goes with it. One wonders if all that bluster was simply to boost perceptions and deceive the public - or did it really believe that it was financially sound and would survive. If my ideas about how the corporate mind works in these situations is correct then it was probably the latter.

Genesis Health Ventures Files Voluntary Petition for Bankruptcy Protection; Receives Commitment for up to $250 Million in DIP Financing
Business Wire June 22, 2000, Thursday

Genesis Health Ventures (NYSE:GHV) today filed voluntary petitions with the U.S. Bankruptcy Court in Delaware to reorganize its capital structure under Chapter 11 of the U.S. Bankruptcy Code.

The company elected to seek court protection in order to facilitate efforts to restructure capital obligations in the wake of drastic, unanticipated cuts Federal payment systems that reimburse the company for skilled nursing care and ancillary services.
Genesis also announced today that it is making arrangements to have its stock traded as an over-the counter (OTC) equity security on the OTC bulletin board (OTCBB) and anticipates trading under the ticker symbol GHVIQ.

In a separate action, The Multicare Companies, Inc. also filed for Chapter 11 protection in Delaware this morning. Multicare -a corporation principally owned by Genesis (43.6%)-owns and manages skilled nursing and assisted living facilities. Multicare's 141 owned and managed facilities are operated by Genesis ElderCare.

Multicare Files Voluntary Petition for Bankruptcy Protection; Receives Commitment for up to $50 million in DIP Financing
Business Wire June 22, 2000, Thursday

The Multicare Companies, Inc. and certain affiliates today filed voluntary petitions with the U.S. Bankruptcy Court in Delaware to reorganize its capital structure under Chapter 11 of the U.S. Bankruptcy Code.

The company elected to seek court protection in order to facilitate efforts to restructure capital obligations in the wake of drastic, unanticipated cuts in Federal payment systems that reimburse the company for skilled nursing care and ancillary services.

Genesis Health Ventures Files for Bankruptcy
The New York Times June 23, 2000, Friday,

Genesis Health Ventures Inc., which operates skilled nursing and assisted-living centers, has filed for protection from its creditors under Chapter 11 of the Bankruptcy Code.

The company -- with about 34,000 employees, $1.86 billion in 1999 revenue and more than $2 billion in debt -- is seeking approval of a federal bankruptcy judge in Wilmington for $250 million in loans to continue operations while it reworks its finances.

Genesis, based in Kennett Square, Pa., said late today that it was faced with huge cuts in Medicare reimbursements, and that it had been negotiating with senior noteholders since March to reorganize.

Shares of Genesis were suspended today on the New York Stock Exchange, where they will be delisted. Genesis said the shares would soon be traded over the counter.

Genesis will offer equity to lenders. Nursing home chain may not be able to sell assets now Health care
THE BALTIMORE SUN June 24, 2000, Saturday ,FINAL

Genesis Health Ventures, the Pennsylvania-based nursing home chain that operates 50 nursing homes in Maryland, plans to reorganize its way out of bankruptcy by persuading lenders to accept equity in the company, not by selling assets, spokeswoman Lisa Salamon said yesterday.

To some degree, that may reflect Genesis' confidence in its "network strategy," building dense regional operations which include not just nursing homes but also pharmacies, rehabilitation contractors and other related businesses.

However, according to analysts and industry sources, it also reflects the difficulty of selling facilities in the current depressed market.
When Genesis filed for bankruptcy reorganization Thursday, it became the fifth of the seven largest nursing home chains to do so. Integrated Health Services Inc., which has its headquarters in Sparks but no homes in Maryland, filed in February.
Robert M. Mains, an analyst with Advest Inc. in Saratoga Springs, N.Y., said, "Genesis has had some nice homes up for sale, but nobody wanted to buy them, and anybody who wanted to buy them couldn't get financing."

Mariner turns over eight Wisconsin nursing homes
The Business Journal July 14, 2000

In a related matter, another national nursing home chain involved in Chapter 11 proceedings was looking for a buyer for its Wisconsin nursing homes, but has not been successful. A spokeswoman for Genesis HealthVentures of Kennett Square, Pa., said the company has put on hold the sale of its seven Wisconsin nursing homes after negotiations with a potential buyer fell through this week.

In late 1999, Genesis put its Wisconsin, Illinois and Ohio nursing homes up for sale as part of a debt restructuring plan. The company subsequently filed for Chapter 11 reorganization June 22.

Genesis sold its Ohio homes and had been negotiating with a prospective buyer for the Illinois and Wisconsin homes until last week, when the buyer failed to secure long-term bond financing for the deal, said Genesis spokeswoman Lisa Salamon.

The seven Wisconsin homes, totaling 954 beds, are in Columbus, Madison, Marshfield, Arpin and Colby.

Genesis has no plans to sell NeighborCare, its Baltimore-based pharmacy division, Salamon said, in Wisconsin, NeighborCare pharmacies are located in Madison, Menomonee Falls and Stevens Point.

If the first are to be last and the meek are to inherit the earth, the post-acute-care industry may be ahead of its time.
Modern Healthcare July 24,2000 Special Report

Manor Care, based in Toledo, Ohio, also lost money last year. Its $43.7 million loss included a $274 million write-down of an investment in Genesis Health Ventures, a long-term-care chain that filed for bankruptcy last month.


Federal News Service July 25, 2000, Tuesday

My name is Michael Walker, and I am the Chairman and CEO of Genesis Health Ventures, one of the largest eldercare providers in the United States. Today I speak on behalf of the American Health Care Association -- a federation of affiliated associations representing over 12,000 non-profit and for-profit assisted living, nursing facility and subacute care providers, nationwide.
My company made a commitment to admit all patients regardless of reduced Medicare payments for services which averages about $100 a day reduction from our pre-SNF PPS rates. We are the most recent provider to succumb to bankruptcy. Bankruptcy is not just financial restructuring. Bankruptcy directly affects employee morale, recruitment and retention, care services available and investments toward future care and services. In reality it is a major distraction from care giving.

These financial challenges raise the most critical question before this committee--who will take care of this most vulnerable population if we continue to lose the infrastructure of our skilled nursing facilities at a time when demographics create an increased demand for care? The consequences will be devastating.


In closing, Mr. Chairman, there are two key points that I emphasize.

First, dollars spent on caring for patients on the front-end help to reduce their reliance on institutional care. Admissions and discharge statistics for the past decade demonstrate that nursing homes are returning a larger percentage of their patients to the community. Medicare fueled this transformation. That investment in intense skilled nursing facility services is a win-win. Beneficiaries win - they are returned to their home setting; government wins - the burden of care costs are reduced, and the health system wins - - care is given in the most appropriate settings. The BBA and BBRA as being implemented by HCFA, are unraveling that win-win, making it a lose- lose. Unless quickly addressed, the burden of care costs will rise, there will be a backlog of patients inappropriately placed, and Medicaid and Medicare costs will explode.

Second, demographic projections indicate that once the baby-boom generation begins retiring en masse -- in just a few years -- the burgeoning demand for skilled nursing care and related health services will exceed the available supply. Unless we as a nation are willing to assume the full burden of caring for our grandparents, parents, and siblings, we need to fix the eldercare funding crisis immediately. If we don't, quality long-term care will not be there when you and your loved ones need it - - no matter who pays for it. The federal government should provide a favorable environment encouraging providers to invest now to meet future needs -- not wait until the level of problems threatens to overtake our ability to solve them.

Thank you very much, Mr. Chairman, for this opportunity to express our deep concerns and frustrations with the current PPS system and its flawed implementation by the Health Care Financing Administration.

Top 15 nursing home chains

Modern Healthcare By the Numbers Supplement July 31, 2000

Table ranks top 15 nursing home chains by number of beds as of 1/99 Beverly Enterprises had 62,293 beds.

Rank ...Company................................................Beds

1 Beverly Enterprises Fort Smith, Ark. ...........................62,293
2 Mariner Post -Acute Network Atlanta .......................... 49,656
3 HCR Manor Care Toledo, Ohio .......................... ..............47,138
4 Sun Healthcare Group Albuquerque .......................... .....44,941
5 Integrated Health Services Owings Mills, Md. ...............44,302
6 Vencor Louisville, Ky. .......................... ........................38,362
7 Genesis Health Venturers Kennett Square, Pa. ............. 35,016

Out on a limb;
The Tampa Tribune September 17, 2000, Sunday, FINAL EDITION

John Ransom, health care research director at Raymond James & Associates in St. Petersburg, laid it out to the senators step by step.

It started more than 10 years ago, he said, when the government cut back Medicare payments to hospitals, which, in turn, began discharging patients who still needed rehabilitation.

A group of "entrepreneurial" nursing home executives saw the opportunity to grow, Ransom explained, and began building special units for people who needed nursing and therapy services after surgery, strokes or other long-recovery conditions.

These new Medicare patients brought in $ 300 to $ 400 per day, Ransom said, compared with the $ 70 to $ 100 per day paid by Medicaid. Medicaid is the state and federal program that covers nursing home care for people who can't pay As the money poured in, "public companies, especially Genesis Health Ventures, Integrated Health Services, Vencor, and Sun Health, rose to prominence," Ransom said.

The big companies began acquiring the smaller ones. Genesis Health spent $ 1.4 billion for a company called Multicare. Vencor spent $ 2 billion for nursing home, therapy and short-term hospital companies. Integrated spent billions more on a collection of rehabilitation and home health companies. Most paid with cash, largely borrowed.

"In the mid-'90s," Ransom said, "there was a sentiment in the financial community ... that, you know, generous financing from the federal government would continue, even under a cost-based system."

The companies miscalculated.

ElderTrust Announces Company Has Fallen Below New York Stock Exchange Continued Listing Criteria

Business Wire September 22, 2000, Friday

ElderTrust (NYSE:ETT), an equity healthcare REIT, today announced that it has been notified by the New York Stock Exchange (NYSE) that it has fallen below the continued listing criteria relating to total market capitalization and minimum share value.

Under the market capitalization requirement, the Company's market capitalization must equal or exceed $15 million. Under the NYSE rules, the NYSE may grant a period of up to 18 months ending February 10, 2002 during which the Company would need to meet the requirement.

The Company has formally requested that this time period be granted and has submitted a business plan to the NYSE to demonstrate its ability to achieve compliance with this standard.
Under the minimum share value requirement, the Company's shares must trade at a value exceeding $1 for thirty consecutive trading days. As a result of this notification, the Company must meet this requirement by the later of either its next annual meeting, currently scheduled for May 2001, or March 20, 2001 to retain its listing.

ElderTrust Announces Agreements With Genesis and Multicare; Genesis and Multicare to File Motions Seeking Approval of the Agreements from the U.S. Bankruptcy Court
Business Wire November 22, 2000, Wednesday

ElderTrust (NYSE:ETT), an equity healthcare REIT, today announced that it has reached agreements, subject to approval of the U.S. Bankruptcy Court, with Genesis Health Ventures, Inc. (OTC:GHVIQ.OB) and The Multicare Companies, Inc. regarding the lease and loan transactions between the entities.

Genesis and Multicare have advised the Company that they intend to file the motions with the U.S. Bankruptcy Court seeking the Court's approval to enter into the proposed transactions. Depending on the Court's schedule, the motions will likely be heard by the Bankruptcy Court in January 2001. During the period between the filing of the motions and the Court hearing, the creditors for Genesis and Multicare may object to all or any portion of the agreements.

ElderTrust Announces Continued Listing by New York Stock Exchange; NYSE Will Reevaluate on January 11, 2001
Business Wir December 7, 2000, Thursday

U.S. Bankruptcy Court Hearing Scheduled for January 4, 2001; Objection Deadline Set for December 22, 2000

ElderTrust (NYSE:ETT), an equity healthcare REIT, today announced that it has been notified by the New York Stock Exchange (NYSE) that the NYSE is prepared to continue the Company's listing on that exchange and to monitor its performance over the thirty trading days subsequent to November 27, 2000.

ElderTrust Announces Tentative Agreement to Extend Bank Credit Facility Term to August 31, 2002; Announces Acquisition of 118,750 Partnership Units
Business Wire December 19, 2000, Tuesday

ElderTrust (NYSE:ETT), a healthcare REIT, today reported that it has reached a tentative agreement with German American Capital Corporation to further extend the term on its Bank Credit Facility.

Under the new agreement, the Credit Facility would be extended from June 30, 2001 to August 31, 2002 and the extension would, among other requirements, be contingent upon the successful completion of the previously announced agreements with Genesis Health Ventures, Inc. (OTC:GHVIQ.OB) and The Multicare Companies. A summary of significant terms of ElderTrust's tentative agreement with German American Capital Corporation is as follows:

ElderTrust Announces U.S. Bankruptcy Court Action; Court Approves Motions As Filed; Transactions Scheduled to be Completed by January 31, 2001
Business Wire January 4, 2001, Thursday

ElderTrust (NYSE:ETT), a healthcare REIT, today reported that the U.S. Bankruptcy Court has approved as filed the Company's agreements with Genesis Health Ventures, Inc. (OTC:GHVIQ.OB) and The Multicare Companies.


Genesis Health Ventures, Inc. (OTCBB: ghviq) has reported results for its fiscal year ended September 30, 2000.

Revenues for the fiscal year ended September 30, 2000 were $2.4 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) and excluding impairment of assets and other charges were $201.4 million.

The company recorded impairment of assets and other charges in the fourth quarter of fiscal 2000 of approximately $357.2 million, consisting of the following:
Net loss before cumulative effect of a change in accounting principle and preferred stock dividends for the fiscal year ended September 30, 2000 was $831.1 million.

ElderTrust Completes Transactions with Genesis and Multicare Finalizes Bank Credit Facility Extension
Business Wire February 2, 2001, Friday

ElderTrust (NYSE:ETT), an equity healthcare REIT, today announced that it has successfully completed the previously announced transactions with Genesis Health Ventures, Inc. (OTC:GHVIE.OB) and The Multicare Companies.

Concurrent with the completion of these transactions the Company also finalized the extension of its Bank Credit facility maturity date to August 30, 2002. Details of the transactions with Genesis and Multicare are available in the Company's press release dated November 22, 2000. Details of the Bank Credit Facility extension are available in the Company's press release dated December 19, 2000.

Genesis Health Ventures and Independence Blue Cross Sign Five Year ElderCare Contract
Business Wire February 12, 2001, Monday

Genesis Health Ventures, Inc. today announced that it has signed a five year contract to provide skilled nursing and related services to Independence Blue Cross and its affiliates ("IBC") members in Pennsylvania, New Jersey and Delaware.

Prior to the contract, Genesis had a yearly agreement with the insurer to provide in-patient services in Genesis ElderCare Centers throughout the region. The new pact covers all IBC members.

ElderTrust Completes Agreements with Mortgage Lender
Business Wire February 13, 2001, Tuesday

ElderTrust (NYSE:ETT), an equity healthcare REIT, today announced that it has successfully completed the renegotiation of loan covenants with the holder of two mortgage notes payable totaling approximately $20 million.

Nursing home violations rise; Life-threatening problems at some long- term centers worry state officials
Milwaukee Journal Sentinel April 8, 2001 Sunday FINAL EDITION
STEVEN WALTERS of the Journal Sentinel staff

COMMENT:- One of the cases used to illustrate this article was a Genesis home.

Still, on some days in some homes in the last few months, the frayed safety net of nursing home care has failed completely.

Stevens Point: Care given to four residents of the River Pines Center in Stevens Point -- who all died between Dec. 23, 2000, and Jan. 29, 2001 -- was criticized by state inspectors in a 167-page report.
Alleged care lapses at that home were "sobering," Schroeder said. "I am not aware, in talking with the staff, that there had ever been a case like this before."

River Pines is owned by Genesis Health Ventures, which owns several Wisconsin nursing homes, including two in Madison. The chain's homes are part of the estimated 14% of nursing homes in the state that are operating under bankruptcy protections.

Genesis spokeswoman Lisa Salamon said company officials reacted with "shock and disbelief" at the allegations of poor care at River Pines and "assembled a team of clinical care experts" to investigate.

"We have done root-cause analysis of all four cases and have met with the state to informally dispute their findings and conclusions," said Salamon, who said the state report " distorts circumstances and causes" surrounding the four deaths.

ElderTrust Announces Fourth Quarter and 2000 Year-End Results
Business Wire April 9, 2001, Monday

ElderTrust (NYSE:ETT), an equity healthcare REIT, today reported results for the fourth quarter and the year ended December 31, 2000.

Funds from operations (FFO) for the fourth quarter ended December 31, 2000, totaled $12.8 million, or $1.80 per basic and $1.77 per diluted share, on revenues of $7.1 million. In comparison, FFO for the fourth quarter of 1999, totaled $2.9 million, or $0.40 per basic and diluted share, on revenues of $6.9 million.

Genesis Health Ventures Reports Second Quarter Fiscal 2001 Results and Files Form 10-Q
Business Wire May 17, 2001, Thursday

Revenues were $630.1 million and $1.259 billion for the three and six months ended March 31, 2001, respectively.

Earnings before interest, taxes, depreciation and amortization (EBITDA) and excluding $14.0 million of debt restructuring, reorganization costs and other charges, and a loss of $2.3 million on the sale of an eldercare center were $45.3 million for the quarter ended March 31, 2001.

The Multicare Companies Report Second Quarter Fiscal 2001 Results and Files Form 10-Q
Business Wire May 17, 2001, Thursday

Genesis ElderCare Corp., the joint venture that owns The Multicare Companies, Inc., today announced results for the second quarter of fiscal 2001 concurrently with the filing of its Form 10-Q.

Revenues were $158.9 million and $319.3 million for the three and six months ended March 31, 2001, respectively.
Net loss was $8.1 and $11.2 million for the three and six months ended March 31, 2001, respectively.

Genesis and Multicare File Joint Chapter 11 Plan of Reorganization
Business Wire June 5, 2001, Tuesday

Genesis Health Ventures, Inc. (GHVIQ.OB) and the Multicare Companies, Inc. today filed a joint plan of reorganization in U.S. Bankruptcy Court for the District of Delaware, calling for the merger of the two companies under the Genesis banner.

The plan, as filed, provides for the issuance of new notes, new preferred stock and 96% of the new common stock to the Genesis and Multicare senior secured creditors and approximately 4% of the new common stock to the Genesis unsecured creditors. Genesis unsecured creditors will also receive warrants to purchase approximately 5.8% of the new common stock.
Existing holders of Genesis preferred stock and Genesis and Multicare common stock would receive no distribution under the plan. Genesis plans to register the new common stock for trading on a public exchange at a future date.

Philadelphia-Area Nursing Home Firm Files for Reorganization
The Philadelphia Inquirer June 6, 2001, Wednesday
By Josh Goldstein

Genesis Health Ventures Inc., the Kennett Square nursing home company that filed for bankruptcy last year, submitted a plan for reorganization yesterday.

The plan was filed in the U.S. Bankruptcy Court for Delaware and must be approved by the court and creditors. It would provide no compensation to holders of preferred or common shares. Its stock peaked at $ 39 a share in October 1997.
The reorganization plan calls for the merger of Genesis and Multicare Cos. Inc., of Hackensack, N.J., which filed for bankruptcy protection simultaneously with Genesis. Genesis has a 43.6 percent ownership stake in Multicare.

The newly merged company would operate 286 nursing homes in 15 states under the Genesis name. The nursing homes have remained open since the bankruptcy filing.

Secured creditors, including banks and other lenders, would receive 96 percent of the new company's common stock under the proposed reorganization. The remaining 4 percent would go to unsecured creditors such as medical equipment companies and other suppliers. The reorganized company would borrow $ 610 million for operating capital and other purposes.

ElderTrust Addresses Bankruptcy Reorganization Plans Filed by Genesis and Multicare
Business Wire June 6, 2001, Wednesday

A significant plan component calls for Multicare to become a wholly-owned subsidiary of Genesis. Together these customers represent approximately 70% of ElderTrust's revenues.
The Multicare unsecured creditor committee has not approved the plan.
We have not yet had an opportunity to review the filing but, based on discussions with Genesis management, understand that the reorganized company will have a very acceptable leverage level which should enhance their status as a good credit tenant.

Unsecureds to fight health care merger
The June 6, 2001
by Terry Brennan

Bankrupt companies Genesis Health Ventures Inc. and The Multicare Companies Inc. want to take the novel step of emerging from Chapter 11 as one in an estimated $1.5 billion merger, but unsecured creditors of the latter are seeking to block such a deal.
Kennett Square, Pa.-based Genesis already owns 43.6% of Multicare under the Genesis Eldercare brandname, and that has led Multicare unsecureds to file a lawsuit claiming Genesis has a conflict of interest.
The major hurdle to the joint reorganization plan, however, is a motion filed in the case by Multicare's unsecured creditors committee that alleges that Genesis already has too much control over Multicare and that more value could be wrung out of Multicare if a third party bought it, attorneys said Wednesday.
Genesis already manages Multicare under several contracts, Beckerman explained, and Multicare's unsecured creditors charged in their litigation that there's a conflict of interest in those contracts since Multicare's board is made up primarily of Genesis employees.
Genesis and Multicare, also based in Kennett Square, hope to follow a handful of healthcare providers out of Chapter 11 this year after five of the nation's largest nursing home operators filed for Chapter 11 between 1999 and 2000 when Medicare slashed its reimbursements.

Genesis Health Ventures Emerges From Bankruptcy
Business Wire October 2, 2001

Genesis Health Ventures, Inc. today announced that it has emerged from chapter 11 protection following the completion of its plan of reorganization and merger with the Multicare Companies, Inc.

In conjunction with emergence, Genesis also announced that it has secured a $515 million senior secured credit facility led by First Union, Goldman Sachs and GE Capital that will fund obligations under the plan of reorganization as well as ongoing corporate financing needs.

Genesis Listed on Nasdaq National Market System
Business Wire February 7, 2002

Genesis Health Ventures, Inc. today announced that Nasdaq has approved listing of Genesis common stock and warrants on the National Market System and anticipates trading will begin February 8

Pittsfield nursing home to close
Berkshire Eagle May 16, 2002

Cerow, who has been administrator for a year and a half, said the facility learned of the decision Tuesday after receiving a copy of a letter from the state Department of Public Health approving the closure plan. The letter was addressed to Genesis ElderCare of Andover, which manages the nursing center.

Genesis Health Ventures CEO resigns; Michael R. Walker says he needs more time to lobby Congress to fund nursing-home care.
The Philadelphia Inquirer May 29, 2002

Michael R. Walker, who founded Genesis Health Ventures Inc. in 1985, stepped down yesterday as the nursing-home chain's chief executive officer.

Eight months after Genesis emerged from bankruptcy, Walker said he was leaving to focus on lobbying the federal government to better fund long-term care.

"We need a permanent stable funding source for this industry to continue to exist," Walker said in an interview yesterday. "If Congress does nothing, the industry will collapse."

He plans to spend three days a week in Washington in his role as chairman of the Alliance for Quality Nursing Home Care, an industry lobbying group. He will lead the group's effort to head off a crisis on Oct. 1. That's when the federal government's 2003 fiscal budget goes into effect.

Genesis Shells Out for Execs
Senior Housing Wire July 8, 2002

Two former executives with Genesis Health Ventures Inc. are walking away with hefty sums.

The company, which provides senior care and support services, announced July 1 that it expects to record a charge of $13 million on its third-quarter 2002 report for "transition agreements" with former Chief Executive Michael Walker and former Vice Chairman David Barr, the Wall Street Journal reports.

Under the agreements, Walker will receive $5.1 million in severance pay, $425,000 in incentives and $70,833.33 per month, according the company's recent filing with the Securities and Exchange Commission.

Barr will get $1.5 million and 75,000 shares of Genesis stock.

NeighborCare buys pharmacy rival
Chicago Daily Herald July 31, 2002

Genesis Health Ventures Inc. has agreed to acquire NCS HealthCare Inc., a rival in the institutional pharmacy market, for $340 million in stock and debt.

Genesis Health lays off 125 as part of $16 million cuts
The Philadelphia Inquirer September 17, 2002

Genesis Health Ventures Inc., Kennett Square, announced that it had completed a $16 million cost-reduction program. The nursing-home chain said $11 million in savings came from reduced labor costs that resulted from the layoffs of 125 people and the elimination of five vacant positions. Genesis said no direct caregivers in its 258 nursing homes and assisted-living facilities had lost their jobs. "This reduction initiative follows a thorough review and ensures that the company operates as efficiently as possible," said Robert Fish, interim chief executive officer

Genesis Health lays off 125 as part of $16 million cuts
The Philadelphia Inquirer September 17, 2002

Genesis Health Ventures Inc., Kennett Square, announced that it had completed a $16 million cost-reduction program. The nursing-home chain said $11 million in savings came from reduced labor costs that resulted from the layoffs of 125 people and the elimination of five vacant positions. Genesis said no direct caregivers in its 258 nursing homes and assisted-living facilities had lost their jobs. "This reduction initiative follows a thorough review and ensures that the company operates as efficiently as possible," said Robert Fish, interim chief executive officer

WEEKLY NEWS : NCS HealthCare switches:
The Plain Dealer October 27, 2002

The board of Beachwood-based takeover target NCS HealthCare Inc. has rejected the suitor it previously preferred, Genesis Health Ventures, because Genesis stock has tumbled 25 percent since the deal was announced in July. Omnicare Inc.'s offer is almost three times the value per share of the Genesis deal.

Blackstone eyes nursing homes
Daily Deal (New York, NY) November 26, 2002

The New York private equity firm is considering the purchase of Genesis Health Ventures' ElderCare business for about $900 million.
One of the nation's largest operators of geriatric care facilities, Kennett Square, Pa.-based Genesis has been working since September with UBS Warburg LLC and Goldman, Sachs & Co. on a sale, and its board plans to meet in December to choose a strategic direction.
But Genesis is still looking for a solution for its nursing care business, which includes 284 owned, leased and co-ventured sites and 35,600 beds.

Blackstone is one of the only serious suitors for ElderCare, a source said. But Blackstone, a New York-based private equity firm, is something of a surprise bidder, as it has little experience investing in the healthcare industry.

Genesis ends effort to buy NCS; :: OmniCare outbid the Kennett Square company by 3-1. It will receive a $22 million breakup fee.
Philadelphia Inquirer December 17, 2002

Outbid by a rival, Genesis Health Ventures Inc., of Kennett Square, announced yesterday that it had ended its bid to acquire NCS Healthcare Inc., an institutional pharmacy company based in Cleveland.

Genesis Completes Sale of Eight Centers in Illinois; 850 Beds Sold for $25.4 Million
PR Newswire February 6, 2003

Genesis Health Ventures, Inc. today announced that it has completed the sale of eight Illinois skilled nursing centers to Rothner Health Ventures, a private regional healthcare provider headquartered in Evanston, Illinois, for $25.4 million.

Genesis unloads Florida nursing homes
Daily Deal (New York, NY) February 6, 2003 Thursday

After losing a battle for a geriatric pharmacy services company, nursing home operator Genesis Health Ventures Inc. is shedding its operations in Florida, - - - - .
The company's disappointing results come after it lost a nearly half-year battle to win Beachwood, Ohio-based NCS HealthCare Inc. to rival Omnicare Inc. Genesis had hoped to combine NCS' pharmacy services operations with its own NeighborCare unit, which provides nearly 45% of the company's revenues, to create a leader in the long-term pharmaceutical care.

Genesis Health to become two firms One will be nursing homes and other care facilities. The other will be mainly an institutional pharmacy
Philadelphia Inquirer February 13, 2003

One of the nation's biggest nursing home operators, Genesis Health Ventures Inc., of Kennett Square, announced yesterday that it would break into two separate, publicly traded companies.

Genesis' ElderCare divisions, consisting of 233 nursing homes, 33 assisted-living facilities, and related rehabilitation and other businesses in 14 states, will make up one company. The other will constitute primarily Genesis' Baltimore-based institutional pharmacy division, NeighborCare.
The split frees the pharmacy side of the business from the risks inherent in the nursing home industry, which faces high medical-malpractice liability exposure and is primarily financed by Medicare and Medicaid payments that could be cut back in the face of federal and state budget shortfalls.

Genesis Health to split in two
Daily Deal (New York, NY) February 14, 2003

In a conference call, executives said that Genesis had received more than 20 letters from companies interested in purchasing its ElderCare nursing home and assisted living facilities. The company and its advisers, UBS Warburg and Goldman, Sachs & Co., didn't feel the assets would be sold at the best price possible given the current environment. The Goldman Sachs Group owns about 15% of Genesis.

Press Release February 19, 2003

Standard & Poor's Ratings Services said today that it affirmed the ratings on Genesis Health Ventures Inc. At the same time, the ratings have been removed from CreditWatch, where they were placed Oct. 3, 2002. The removal from CreditWatch reflects the company's announcement that its board has approved a plan that splits Genesis into two public companies.

Genesis will retain its institutional pharmacy business, called NeighborCare, and will spin off its eldercare businesses into a new firm. The transaction is expected to be completed by the end of the year.

The outlook on the Kennett Square, Pa.-based Genesis is developing. Total debt outstanding as of Dec. 31, 2002, was $647 million.
"The rating currently reflects the company's existing business profile," said Standard & Poor's credit analyst David Peknay. "About half of Genesis' revenues derived from its eldercare business and half from NeighborCare. The eldercare division has experienced significant challenges as a result of several industry-related concerns such as government reimbursement and the highly litigious environment."

Comment:- It seems that Genesis has been the subject of patient care litigation in Florida and is following Beverly, Extendicare and Kindred by selling and leaving.

Mining Florida's seniors for gold: Negligence, fraud, serial bankruptcies, billion-dollar criminal and civil fines. It's the seamy side of nursing home care in the U.S.
Ottawa Citizen April 28, 2003

Genesis, now our largest chain, has puts its homes up for sale and will likely be gone by the summer. Florida is now the worst place in the nation to be in this business."

Comment:- It seems to have done well in 2001, coming out of bankruptcy after being forgiven US $1.5 billion in debt. It did worse in 2002 but a spokesperson claims to be happy with this. Contrast this with S&P's comments above.

Post-acute pain; Modern Healthcare survey shows mixed results for providers in '02, with end of Medicare add-on payments among the challenges
Modern Healthcare May 5, 2003

With some of the largest companies recently emerging from bankruptcy, year-to-year comparisons become harder to interpret, according to George Hager, executive vice president and chief financial officer at Genesis Health Ventures. For example, Kennett Square, Pa.-based Genesis, which operates skilled-nursing and assisted-living facilities, reported $70.1 million in net income on $2.6 billion in revenue for 2002, a 72% drop in earnings from the previous year. However, the company's reported net income of $247 million in 2001-after having suffered losses of $1.2 billion from operations-takes into account a $1.5 billion forgiveness of debt, Hager says.

Genesis Health discloses details of elder-care spin-off
Philadelphia Inquirer June 4, 2003

- - - - the spin-off of its elder-care businesses into a separate publicly traded company called Genesis HealthCare Corp. - - - - - Once the transaction is completed, Genesis HealthCare will change its name to NeighborCare Inc.

Genesis Health Ventures Reports Third Quarter Fiscal 2003 Results
PR Newswire August 4, 2003

NeighborCare Reports Strong Growth in Revenues and Expanding Margins
ElderCare Spin-Off on Target for October
Increased revenues were primarily driven by growth in NeighborCare.

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