Book Proposal: Bad Company

By Christopher Zoukis

There’s a small town in Ohio.  The town’s name is Dublin, after the famous city in Ireland.  Commonly described as ‘rustic,’ which is a quaint way of saying ‘countrified’ and ‘unsophisticated,’ Dublin – the one in Ohio, not the other one – is headquarters for Wendy’s International.  Most people have heard of the hamburger chain.  What they haven’t heard of is another big firm in the same city.

National Century Financial Services.  Started in 1991, this outfit soon became the nation’s largest purchaser of hospital, physician and other health care receivables.  It works like this.  NCFE buys the accounts receivable of small hospitals, medical clinics and nursing homes.  Because of their small sizes, all of these health-care providers are having money problems.  They are desperate.

National Century steps in, giving them cash to cover their expenses so they can stay in business.  The health-care providers win because they don’t have to wait for insurance companies to pay them.  They get most of their money now, and don’t have to mess with the frustrating job of dealing with stingy insurance companies.

National Century wins because they keep a fee or percentage of any money they collect from the insurance companies.  Then NCFE puts all the accounts they bought into a kitty and sells them in the form of asset-backed securities to huge institutional investors like money market funds, or retirement funds. 

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