What's in a name? Would that which we call Vencor, by any other name, still be Vencor?
The Louisville, Ky.-based company must hope not.
The nursing home chain's name carries some heavy baggage: bankruptcy, an $80 million settlement of Medicare overpayments and a $26 million Medicare fraud settlement triggered by whistleblower lawsuits.
So it comes as no surprise to marketing experts that Vencor plans to rename itself Kindred Healthcare when it emerges from bankruptcy, which is scheduled to occur no later than May 1 (March 5, p. 6).
"If you are in a position where you've just had horrendous difficulties, changing the name might be the best thing to do," said Laura Ries, president of Ries & Ries, an Atlanta-based marketing consulting company. "In (Vencor's) case, I think it was their only strategy. Once you have really damaged the brand name in the minds of consumers, there's no going back."
Even without the baggage, Ries said, almost anything is better than the old name. "Vencor is very sterile and doesn't really say anything or mean anything," she said. "Kindred Healthcare is more emotional, a touchy-feely type of thing. It just sounds better."
Vencor officials did not return several calls for comment on this article.
Changing the thinking of consumers, industry-watchers and vendors will not be easy, said Pamela Kiecker, chair of the department of marketing and business law at Virginia Commonwealth University School of Business in Richmond.
"If you want to cut it (the old name) off completely, you're having to build from ground zero, and it's hugely expensive in terms of time and money," she said.
No one at Gentiva Health Services, Scarsdale, N.Y., needs to be told how hard it is to change names. The home health and specialty pharmaceutical company formerly known as Olsten Health Services took charges totaling $3.9 million in the first three quarters of 2000 related to the name change. Figures for the fourth quarter, which ended Dec. 31, hadn't been made available.
The name change was compelled by the spinoff of the company from Olsten Corp., said Michael Johns, Gentiva's vice president of communications. Adeco, a Swiss staffing company, forced the divestiture when it purchased Olsten Corp.'s staffing business shortly after Olsten Corp. settled a whistleblower lawsuit that was joined by the U.S. Justice Department. The suit alleged that Olsten Health Services conspired with Columbia/HCA Healthcare Corp. to defraud Medicare. Olsten wound up paying $61 million to settle both criminal and civil charges.
Despite the settlement, the company thought consumers still had a positive view of Olsten, so both names were used for the first three months after the name change occurred on March 16, 2000, Johns said. In addition, Gentiva rolled out a new logo, new signs at its 400 locations, a fresh Web site and a new stock symbol, GTIV, the last two letters of which emphasize the company's home infusion service, Johns said.
Since the Gentiva name itself has no meaning, Johns said, the company has been able to "paint an image" of quality and service that will be attached to the name.
However, when Total Renal Care wanted to change its name, it purposely chose a name that did mean something. DaVita translates from Italian into English as "he/she gives life. It represents what we do every day," said LeAnne Zumwalt, a spokeswoman for the Torrance, Calif.-based dialysis-services provider. DaVita owns 440 outpatient centers and manages 48 others.
DaVita's new name was prompted by financial troubles, although not on the scale of Vencor/Kindred. Total Renal Care broke some of its loan covenants and completely turned over its management team before the decision was made in June 2000 to rename the company DaVita, Zumwalt said.
DaVita could afford to remind patients of its old name because there was some value left in it, the marketing experts said, but Vencor/Kindred doesn't have that luxury. "From the company's perspective, I would try to distance myself as much as possible from the old name," Ries said.
Some of Vencor's longtime critics may work to keep the name in the public eye. The National Citizens' Coalition for Nursing Home Reform plans to mention the company's emergence from bankruptcy and name change in its newsletter, Quality Care Advocate, which reaches 3,000 people, said Janet Wells, public policy director. The group would step up its efforts if Kindred fails to live up to its agreement with the federal government.
Ries also recommended an aggressive public relations campaign, preferably led by Vencor/Kindred's president, chairman and chief executive officer, Edward Kuntz.
"He should spend a lot of time talking to reporters, giving speeches and going to seminars," Ries said. "It takes a lot of dedication, but it's the best long-run strategy."
Ries stressed that the public relations tactics can work only if Kindred is truly different in its operations than Vencor. Kindred operates 295 nursing homes and 56 long-term-care hospitals.
"In the end, it's really up to them to live up to their new name," Ries said. "I mean, a name can't solve everything."