Bruce Lunsford - Business Career

Business Career

Lunsford and two other partners founded Vencor in 1985. Originally the company was called Vencare, but an initial public offering was registered under the name Vencor in 1989. At one point during Lunsford's tenure, Vencor grew to employ over 65,000 people in 45 states, with more than 300 facilities caring for 50,000 patients. Vencor also became a Fortune 500 company.

In 1998, Vencor was split into two companies. One company, Ventas became a real estate investment trust (REIT) which owned all of the real-estate property, and leased space to the second company, Vencor, which operated the facilities. At the time, Vencor was expanding rapidly, and it considered that using a REIT provided a better financing structure to allow the companies to grow. At the time of the split, all shareholders in Vencor were issued one share of Ventas for every share of Vencor that they held.

In 1997, the US Government drastically reduced Medicare reimbursement rates with the passage of the Balanced Budget Act of 1997, which had a significant impact on the nursing home industry. New York Times business writer Kenneth Gilpin wrote that “The drop in payments was so dramatic that the financial structures of many of these companies were not flexible enough to adjust.” He went on the mention that as of the summer of 1999, 12 percent of the 1.7 million nursing home beds were operating under Chapter 11 bankruptcy protection.

As a result of the Medicare cuts, Vencor filed for Chapter 11 protection from bankruptcy in September 1999. At the time, five of the top seven nursing homes filed for chapter 11 protection from bankruptcy, however Vencor (then Kindred) was the first to emerge. Vencor was renamed Kindred healthcare in 2001.

During the Chapter 11 reorganization, Vencor shares lost their value; however, Ventas shares improved from below $4 per share in 1999 to trading around $50 per share in April 2008.

Lunsford served as the CEO of both companies until resigning in 1999, and remained the Chairman of Ventas until 2003.

A civil claims suit in 2001 alleged that Vencor knowingly submitted false claims to Medicare, Medicaid, and TRICARE, the military's health care program. Vencor maintained that they had committed no wrongdoing and continued to dispute the claims until after Lunsford left the company. Vencor later settled the case for $104.5 million, including $54 million for alleged improper claims in Medicare cost reports, $24 million for alleged overbilling in respiratory care services, and $20 million for alleged failure of care claims. The company did not admit any wrongdoing in the settlement.

Lunsford has been involved as an investor, director and adviser to many other start-up businesses through Lunsford Capital and has also been active in thoroughbred horse racing and independent film production.

Lunsford has raced several graded stakes winners, including Madcap Escapade, First Samurai, Tessa Blue and Bel Air Beauty. Through Hart-Lunsford Pictures, he has co-produced several acclaimed independent films, including Grace is Gone, Diminished Capacity, Dedication, Birds of America, and Me and Orson Welles.