Welcome to the June 5 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
KentuckyOne Health: Loads of revenue, low profit margin
KentuckyOne Health’s problems are neatly summarized in a recent chart produced by its parent company, Catholic Health Initiatives, which shows plenty of revenue, but a low profit margin.
The chart shows that KentuckyOne ranks second among Denver-based CHI’s more than 10 geographic regions in terms of operating revenue, but second-to-last in terms of operating earnings margin.
The Kentucky unit, which includes Louisville assets such as Jewish Hospital, Sts. Mary Elizabeth Hospital and, for a few more days, University Hospital, generated 15 percent of CHI’s revenue through the third fiscal quarter, but produced an operating earnings margin of only 1.8 percent. All divisions except one had a margin at least twice as high.
CHI’s Pacific Northwest region, meanwhile, which generated 17 percent of operating revenue, had an operating profit margin of 13.7 percent. The margin data exclude restructuring costs.
CHI executives discussed the results in a recent third-quarter conference call with industry analysts.
KentuckyOne Health in mid-May cited “significant challenges” in the health care industry when it announced that it would sell Jewish Hospital and other Louisville facilities to as of yet unknown buyers. Late last year, the health system and the University of Louisville said they were ending their troubled joint operating agreement for University Hospital, for which KentuckyOne controls 90 percent of income and loss.
Some of KentuckyOne’s assets have struggled in part because it has gained more patients on government insurance, Medicare and Medicaid, which pay less for health care services than it costs hospitals to provide them.
CFO J. Dean Swindle told analysts in the call that its share of Medicare customers has continued to increase, while the share of customers on private insurance has continued to decline.
CHI executives also told analysts that the University Hospital transition was “on track” to occur July 1, and that the nonprofit has seen “a fair amount of interest” for Jewish Hospital and the other assets it plans to sell.
Swindle said that as soon as CHI anticipated the asset sale, it began working with advisers on getting the sales process ironed out.
“Kentucky will be very quick,” he said.
Mint Julep Tours plans a Solar Eclipse & Bourbon Sips experience for Aug. 21
On Monday, Aug. 21, Hopkinsville, Ky., is apparently the place to be to fully witness the total solar eclipse that’ll last a whole two minutes and 40 seconds that afternoon.
Many Kentuckians have already made plans to head that direction, but for those who need more of a reason, Mint Julep Tours is offering a trip to Hopkinsville paired with a craft bourbon distillery experience.
For a fee of $149, the tour includes a trip to the MB Roland Distillery, which will feature tours, tastings, a festival atmosphere with live music and food trucks, and a prime eclipse viewing spot.
MB Roland Distillery opened in 2009 as Kentucky’s first completely grain-to-grass craft distillery. It uses white corn in its bourbon recipe, and the distillery also produces interesting products from Kentucky Dark Fired Whiskey to Kentucky Apple Pie — and something called St. Elmo’s Fire, which includes cinnamon, cayenne pepper and cane sugar blended with moonshine.
Too much of St. Elmo’s Fire, and your world might get a little dark before the eclipse.
Cigar bar adding second location this week
The owner of Match Cigar Bar is hoping the business’s new location in New Albany will catch fire the way the original Match Cigar Bar has in Jeffersonville.
The New Albany location, 147 E. Main St., is hosting a grand opening celebration from 3 p.m. to midnight on Friday, June 9.
“We are excited to bring another 21st century cigar and bourbon bar to New Albany,” Match owner Jeff Mouttet said in a news release. “We feel Match will bring yet another reason to visit Southern Indiana.”
In addition to offering a place for people to buy and smoke cigars, Match offers a full menu of bourbons, craft cocktails, beer and wine. It also will serve food from neighboring restaurant Urban Bread Co.
During the grand opening event, customers also will have the opportunity to take advantage of specials and try the new Pappy Van Winkle Traditional Cigar.
“The Pappy Van Winkle Traditional Cigar will not be officially released until August, so this is a very limited opportunity for cigar connoisseurs to preview this cigar before anyone else,” Mouttet said in the release.
Customers will be able to speak with Julian Van Winkle, president of the Old Rip Van Winkle Distillery, and Jonathan Drew, owner of cigar company Drew Estates, who partnered to create the new cigar, at Match’s grand opening.
Match in New Albany is in a building dating back to the 1870s, which features exposed bricks and original hardwood floors. The furniture and artwork were designed by Drew Estate, Arturo Fuente and other boutique cigar brands. —Caitlin Bowling
Butchertown pizzeria slated to open
Absence the apocalypse or a waylaid food delivery, Butchertown Pizza Hall will open its doors on June 19.
With the new pizzeria, chef Allan Rosenberg’s return to his first love. Rosenberg founded Papalino’s Pizza and eventually sold that business and moved on to other ventures.
Butchertown Pizza Hall will serve its first slices of thin-crust pizza to the public at 11 a.m. in the former Hall’s Cafeteria building at 1301 Story Ave. Prices will range from $3.50 for a cheese slice to $30 for a packed pizza.
The pizzeria also will have a full bar and arcade games.
Another restaurant is under construction a little ways down the street, but no opening date has been set yet. However, the owners of the coming Italian restaurant Lupo at 1540 Frankfort Ave. have been posting pictures of the construction process. It looks like it won’t be long before it ready for customers either. —Caitlin Bowling
California company buys local apartment complex
A 212-unit apartment complex in Louisville sold for $30 million last week, according to Jefferson County property records.
Cushman & Wakefield/Commercial Kentucky represented the seller.
Mount Auburn Multifamily declined to say what, if anything, they plan to do with the property.
“We love Louisville; it’s a great city. However, we have a company policy of not disclosing or discussing our business plans,” Nichole Mitchell, commercial real estate closer for Mount Auburn Multifamily, said in an email to Insider.
According to the company’s website, the company owns and operates “stabilized, high quality-multifamily assets” where rents are affordable to middle-income families and occupancy rates exceeds 90 percent. They primarily invest in secondary or suburban markets. —Caitlin Bowling
1792 releases limited-edition 225th Anniversary Bourbon to commemorate Kentucky’s birthday
More than 100 industry representatives, elected officials and media gathered at the Barton 1792 Distillery in Bardstown on Thursday to raise a toast to the state’s 225th anniversary of joining the United States.
So what were they toasting with?
1792’s latest limited-edition expression, appropriately called 225th Anniversary Bourbon, which can now be found on bar and liquor-store shelves throughout the commonwealth only.
The bourbon in this batch was aged 10 years and bottled at 92.15 proof, a nod to both the year we joined the Union and to us being the 15th state to do so.
The signature band around the bottle’s neck is dark blue, the same color as the state seal.
Insider was there for the festivities and can attest to the bourbon’s quality. The proof seemed like a great fit for the juice, making it sweet and smooth with lingering notes of honey and almonds. And best of all, this product is quite affordable at $35.99.
The supply is limited, however, which is why the distillery decided to only sell it in Kentucky. If you can’t find it at a store near you, try the distillery’s gift shop. (Distillery tours are free, by the way.) —Sara Havens
Wesley Manor introduces interactive technology to keep residents engaged
From popping virtual bubbles to flying virtual plans, residents at Wesley Manor Retirement Community now have access to new technology to help them remain engaged.
Developed by Centennial, Colo.-based It’s Never 2 Late (iN2L), the tech includes 70-inch display, stationary bicycle pedals, a joystick and more than 3,000 applications that Wesley Manor officials hope will help especially the residents with dementia.
Wesley Manor, a faith-based nonprofit, opened in 1963 and provides services ranging from independent living to skilled nursing care at its campus on East Manslick Road. It introduced the service about a month ago.
“The technology improves quality of life by actively engaging residents in experiences unique to their interests and cognitive abilities,” the nonprofit said in a press release.
One of the applications prompts residents to use their fingers to pop virtual bubbles appearing on the giant screen. Other apps include puzzles, brain teasers and help with physical exercise.
“The technology has nearly endless applications for our activities, therapy and pastoral care staff to share with our residents,” Wesley Manor President Jerry Hoganson said in the release.
A Wesley Manor spokesman told Insider via email that the project cost $49,000 and was paid through a state grant.
Centennial, Colo.-based iN2L was founded in 1999 and provides hardware, software and content to help older adults enjoy technology and the Internet. The company said its tech is being used in 2,000 communities in all 50 states, Canada, Northern Ireland and Australia. —Boris Ladwig
Humana partners with the ‘Marathon Woman’
Switzer was the first woman to officially enter and run the Boston Marathon. She was attacked during the race but finished it and, Humana said, since then “has served as an icon of optimism, equality and healthy living.”
To kick off the partnership, Switzer will serve as Humana’s health and well-being ambassador when she participates in the National Senior Games this month. The partners will identify other opportunities throughout the year “to instill optimism and advance the understanding that great things are ahead when your health is ready for them,” Humana said in a press release.
On April 17, 50 years after her historic run, Switzer ran the race again, at age 70.
“Just as women have continued to overcome gender stereotypes over the last 50 years, I believe that in the next 50, seniors will continue to defy stereotypes and rise above society’s expectations,” Switzer said in the release. “That’s why partnering with Humana was a natural fit for me. We both want to inspire seniors to achieve their best health, so they can experience all that life has to offer.”
Humana Chief Consumer Officer Jody Bilney said that the company’s partnership with Switzer “is rooted in our confidence of people’s ability to achieve amazing things as they age. We’re honored to be working with someone who shares our belief in the power of championing active aging for the many great things ahead.” —Boris Ladwig
SmartBox, Capture Higher Ed among Inc.’s best workplaces
More than 1,600 companies applied to be included, but only 233 made the list, based on a 30-question survey from 169,000 employees, Inc. said.
Inc. said keeping employees happy and productive is one of the biggest challenges businesses encounter, and the solution has less to do with policies than with workplace philosophies.
Companies that made the list offered baseline benefits including health and retirement plans and sweetened the employee experience “with benefits like longer maternity leave, paternity leave, innovative health and wellness initiatives, and flexible scheduling,” Inc. said.
One insight from employee comments stood out, Inc. said: “Strong company cultures breed stunning individual and team performance. Workers at the best companies don’t view their employers as sugar daddies. They aren’t mesmerized by whatever giveaways seem to be the latest fad, be it gourmet lunches or beer fridges. Phrases like ‘Do my best work’ and ‘I work on an amazing team’ were seen countless times, indicative of the virtuous circle of culture and performance.”
Capture Higher Ed was among just two Kentucky-based businesses that made the list. Five Indiana companies were included. —Boris Ladwig
VA now free to make final decision on Brownsboro property for new hospital
Last weekend marked the end of a 30-day waiting period for the U.S. Department of Veterans Affairs, as the agency may now issue a Record of Decision, which could officially name the property of Brownsboro Road as the site of its nearly $1 billion replacement hospital for the Louisville region.
The 30-day period kicked in once the VA’s Environmental Impact Statement was published on April 27, which named the controversial Brownsboro property its preferred alternative. However, that does not necessarily mean that this final decision is imminent – which probably would not be a surprise to those who have followed the long-delayed process of the VA hospital saga in Louisville over the past decade.
Local VA medical center spokeswomen Judy Williams recently told IL that until the ROD is issued, “we continue to focus on the Brownsboro Road site.”
Despite the VA’s preference and focus on the Brownsboro property, University of Louisville interim president Greg Postel recently stated that it would be “very rational” for the VA to reconsider and evaluate buying the newly for-sale Jewish Hospital in downtown Louisville. The leadership of UofL and its medical center have consistently preferred a downtown location for the new VA hospital over the past decade, arguing that centralizing services and university staff in one area would help patient care.
UofL spokesman John Karman says that Postel stands by his belief that acquiring Jewish Hospital from KentuckyOne Health could be a better use of the VA’s financial resources, but adds that “none of this has reached the point of any formal discussions” between Postel, the VA or KentuckyOne, nor is he aware of any informal discussions that have recently taken place. —Joe Sonka