MPW - are you guys comfortable with the Prime Healthcare relationship? Prime represents 38% of MPW's revenue and there are a number of transactions back and forth.
How much do we know about Prime? Why such a huge mutually dependent relationship? Is there some history there?
MPW sure isn't the typical REIT.
primehealthcare.com
"This Amendment No. 1 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2009 of Medical Properties Trust, Inc. is filed for the sole purpose of adding the consolidated financial statements of Prime Healthcare Services, Inc. and Subsidiaries (“Prime”) as Exhibit 99.1 and of including consents from our independent registered public accounting firms and that of our significant lessee. At December 31, 2009, our properties leased to Prime were more than 20% of our assets. Since these properties are leased to Prime under long-term, triple-net leases that transfer substantially all operating costs to Prime, financial information about Prime may be relevant to investors. The audited financial statements of Prime for the years ended December 31, 2009 and 2008 are attached to this report as Exhibit 99.1"
"On July 8, 2007, the Los Angeles Times ran a news story that alleged that the policies of Prime HealthCare Services, Inc. resulted in higher than average profits at the possible cost of patient care. According to the Times story, "When Reddy's company, Prime Healthcare Services Inc., takes over a hospital, it typically cancels insurance contracts, allowing the hospital to collect steeply higher reimbursements. It has suspended services — such as chemotherapy treatments, mental health care and birthing centers — that patients need but aren't lucrative.... On four occasions since 2002, inspectors have found that Prime Healthcare facilities failed to meet minimum federal safety standards, placing their Medicare funding at risk."[3]
In 2005, two former nurses at Desert Valley Hospital won a lawsuit in which they claimed they were improperly fired after they accused hospital management of providing inadequate care to save money and Reddy of repeatedly reporting to work while under the influence of alcohol. In February 1999, Reddy was arrested for allegedly attacking Dr. Harry Lifschutz at Desert Valley Medical Group. Reddy jumped over a desk in the doctor's waiting room and allegedly attempted to choke him and take a laptop from Lifschutz's office. [4]" |
