Welcome to the Aug. 27 Monday Business Briefing, your weekly business intelligence digest from Insider Louisville.
Longest bull market with a surprising winner: health insurance companies
The current bull market has, by some definitions, become the longest ever recorded, with the S&P 500 gaining 320 percent over 3,453 days since March 2009, according to Bloomberg.
According to the New York Times, the S&P 500 has created more than $18 trillion in wealth during that period — though 84 percent of that gain has gone to the country’s wealthiest 10 percent.
“As the stock market surged, prices for homes — the most important source and store of wealth for the American middle class — recovered much more slowly from the Great Recession and housing bust,” the paper reported.
A sector that has performed particularly well during the boom: health insurance. The S&P Managed Care sector, which consists of the nation’s largest insurance companies, has gained more than 1,100 percent in the last nine years, according to CNBC.
The bull run has been especially kind to Medicaid insurers WellCare (up 4,000 percent) and Centene (up 1,800 percent) as the Affordable Care Act has expanded Medicaid coverage by nearly 15 million people, CNBC said.
Papa John’s takes new steps in battle against founder
This post has been updated to reflect that John Schnatter is still on the company’s board of directors
The leaders of pizza chain Papa John’s International have hired investment banks Bank of America Corp and Lazard Ltd, the latest step to reverse course amid dismal sales and a fight with founder John Schnatter, Reuters reported Friday.
After the report, Papa John’s shares ended that day at $44.70, a 4.6 percent increase on the day.
There’s been some analyst chatter about the potential for a Papa John’s sale, but Reuters said there’s currently no investigation into strategic alternatives or a sale process underway, and the investment banks are just beginning to work with Papa John’s executives to explore its options for the future. However, Reuters reported that the banks would help the company evaluate any takeover offers if they are presented.
In July, Papa John’s board of directors adopted a “poison pill” to prevent a hostile takeover by Schnatter, who still owns 30 percent of the company.
Schnatter stepped down as chairman of the board of directors after it was reported that he used a racial slur. He later said the decision was a mistake and has since launched a campaign to smear the current leadership and has vowed to regain power at Papa John’s.
Previous controversial comments made by Schnatter, as well as the battle between him and Papa John’s, has soured sales. The company reported a 6.1 percent decline in North American same-store sales during the second quarter of 2018, and executives told analysts that same-store sales in July were down 10.5 percent. —Caitlin Bowling
Coffee roastery may neighbor Falls City Brewing
This post has been updated.
Documents were file last week related to an unnamed coffee roasting facility and cafe at 901 E. Liberty St.
The property owner plans to replace the existing windows with similar but new windows, and since the property is located within the NuLu Review Overlay District, it must undergo a review. By extension, the documents filed with Louisville Metro Planning & Design Services reveal the reason for the window replacement — the space has a likely new tenant.
The roastery and cafe would colocate with Falls City Brewing Co., which opened at that address back in March. There is still space available for a third or fourth business to operate there.
The documents did not say who would operate the roastery, but there are plenty of local coffee companies it could potentially be. We will have to wait to find out.
Old 502 Winery partners with Louisville Pride Foundation for limited-edition Louisville Proud
Think of it as Pride in a bottle. Old 502 Winery has partnered with the Louisville Pride Foundation — which puts on the annual Louisville Pride Festival each September in the Highlands — for a limited-edition wine called Louisville Proud.
The white wine was released Thursday night during a special launch party at the downtown winery, and $1 from each bottle sold will go toward the Pride Foundation. The bottles can be found at Old 502’s tasting room and at a booth during Louisville Pride, which will be held Saturday, Sept. 15.
Several Highlands bars also will be selling it during the event.
Kenneth Wright, marketing director for Old 502, tells Insider the wine is made with Kentucky-grown Vidal blanc as well as Riesling. It’s a bit dry, with a tropical nose and tart finish.
“We wanted to partner with the Louisville Pride Foundation on this wine collaboration to celebrate the diversity and unique can-do spirit Louisville has to offer,” says Wright. “We wanted to celebrate what makes us all one, while at the same time celebrating what makes us beautifully different.”
JCPS looking for Every 1 Reads volunteers
Want to get involved in Jefferson County Public Schools? Now is your chance. The district is looking for volunteers for its Every 1 Reads program for this school year.
Volunteers are matched with a JCPS student, working with them one-on-one for 30 minutes each week to boost reading skills. JCPS has a goal of working with 1,500 students through the reading initiative this year, according to a Tuesday news release.
“Reading is one of the easiest ways to boost school readiness by improving vocabulary, language and literacy skills, concentration, curiosity and memory,” JCPS Superintendent Marty Pollio said in the release. “The 30-minute connection you make with a student may be just what they need to become strong, confident readers.”
The program aims to build both student literacy and partnerships between schools, families and the community to “enrich students’ educational experiences and support their success,” the release said.
Volunteers can choose a school they want to work in, or the district can help select a location, the release said. Individual community members, organizations and corporations are all encouraged to apply. For more information, visit the Every 1 Reads site. —Olivia Krauth
Group forms to promote comprehensive state health care tax reform
A newly formed group of hospital leaders is making a pitch to save Medicaid expansion in Kentucky through comprehensive state health care tax reform.
The nonprofit, nonpartisan Balanced Health Kentucky has released a budgetary tool for lawmakers to use to create a fix to address a projected $200 million to $300 million shortfall in the Medicaid budget over the next two years.
“We’re for the expansion, but we realize that it can’t be paid for the way it is,” Balance Health Kentucky’s President Riggs Lewis told Insider Louisville. So, with the help of this tool, “let’s have a conversation about paying for the Medicaid expansion with comprehensive tax reform.”
The group, whose members include hospital leaders from around the state such as Norton Healthcare CEO Russ Cox and Baptist Health CEO Gerard Colman, is suggesting that a provider tax that’s mainly paid by hospitals be expanded to other health categories, such as physicians’ services, dental services and podiatric services. It’s not taking a stance on which category to focus on but says 13 out of 18 aren’t paying anything.
“We give you a database that you can click on their industry, you set your own rate and you can decide to include them in the provider tax or exclude them,” Lewis said.
A budgetary fix is needed, the group says, to protect the health care of about 500,000 Kentuckians who gained coverage through Medicaid expansion, which the Bevin administration has threatened to end if its 1115 Medicaid waiver, Kentucky HEALTH, fails to go through.
“Ending the Medicaid expansion program hurts rural hospitals, large hospitals and the patients we’re trying to serve,” said Lewis, assistant vice president of health policy for Norton Healthcare. If you lower the tax rate “and apply it to a broader category, you can fully fund Medicaid expansion.” —Darla Carter
The Kentucky Energy & Environment Cabinet has released its plan of how to spend $20.4 million the state has been allocated from the $10 billion that Volkswagen Corp. has agreed to pay for its cheating on diesel emissions tests. Kentuckians can comment on the plan until Sept. 17. A public hearing will take place from 4 to 6 p.m. Sept. 5 in Frankfort.
Kentucky’s Obamacare customers will see rate hikes next year — but smaller ones than in the recent past. The Kentucky Department of Insurance this week finalized rates for 2019, approving an average rate increase of 4.3 percent for Anthem and of 19.4 percent for CareSource. Enrollment begins Nov. 1.