Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — J.P. Morgan Healthcare Conference 2021
27 slides from Tenet Healthcare's conference presentation, Jan 12, 2021
Slide 1: Tenet Health
Tenet Health J.P. Morgan Healthcare Conference Ronald Rittenmeyer, Executive Chairman and CEO January 12, 2021
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation includes “forward-looking statements.” These statements relate to future events, including, but not limited to, statements regarding our liquidity, operating results, future earnings, financial position, operational and strategic initiatives, and developm
Slide 3: Table of Contents
TABLE OF CONTENTS Tenet Health Today Resiliency and Performance Commitment to Portfolio Evolution Operating Model Advancement Environmental, Social, Governance 3
Slide 4: Tenet Health Today
TENET HEALTH TODAY 65 Acute Care Hospitals 550+ Surgical & Other Facilities 50+ Health System Partners 10M Patient Encounters Manila $25B Revenue Managed by Conifer 110K Employees Acute Care Hospitals Surgical & Other Facilities Corporate Offices Note: As of December 31, 2020 4
Slide 5: A Diversified Healthcare Company
HOSPITALS USPI CONIFER Competitive acute care Leading surgical facility High performing revenue A DIVERSIFIED portfolio positioned #1 or #2 in 70% of markets platform with nearly 350 facilities across 33 states cycle company managing ~$25B of revenue HEALTHCARE 2019 STATS COMPANY Net Revenue $14.9B
Slide 6: Resiliency and Performance
SUSTAINED VOLUME RECOVERY Demonstrated recovery despite COVID-19 resurgences by providing safe care settings, pivoting service line strategies, physicians choosing our care sites STRONG PERFORMANCE MANAGEMENT Quickly implemented cost management tactics, maintained ability to tightly RESILIENCY flex
Slide 7: Sustained Recovery in Performance
2020 Volume Statistics vs. Prior Year 101% 89% 89% SUSTAINED 67% 85% IP Admits RECOVERY IN PERFORMANCE 106% 84% 85% 69% OP Visits 39% Care delivery demonstrated ability to safely recover 100% 89% 90% 85% volumes, despite COVID-19 Hospital 45% Surgeries resurgences across markets 102% 94% 95% 80% USP
Slide 8: Improved Financial Position
IMPROVED Actions Taken ~$2.5B FINANCIAL Improved cash collection In debt restructured to provide POSITION performance; $1.3B of Notes issued ~$50M of interest expense savings to enhance liquidity; Revolver and eliminated all significant debt Tenet is well positioned to capacity increased $400M matur
Slide 9: Commitment to Portfolio Evolution
SCALE AMBULATORY SURGERY Continue to accelerate investments in USPI’s strong pipeline of acquisitions and de novos as well as organic growth to meet growing patient demand OPTIMIZE HOSPITAL MARKET PORTFOLIO Strategically expand clinical programs to serve community needs as well as COMMITMENT selecti
Slide 10: Expanding in Ambulatory Surgery
Adjusted EBITDA from Ambulatory EXPANDING IN % EBITDA AMBULATORY 45% SURGERY ~33% Continuing to grow USPI’s leadership in segment with ~25% high growth, high margin, strong cash flow and attractive return on invested ~4% capital 2014 2016 2019 2021E Note: Tenet acquired USPI in 2015 10
Slide 11: Acquired 45 Centers from SCD
~$1.1B Purchase price for the portfolio ACQUIRED 45 Acquired 100% SCD interest and additional interest from physicians CENTERS FROM EBITDA generated by 45 acquired centers SCD ~$210M ~$430M in center-level net revenue and healthy EBITDA margins Portfolio of predominantly ~60% Maximum center ownershi
Slide 12: The portfolio added three types of opportunities
The portfolio added three types of opportunities Network states – example Pioneering center – example New market entry – example d d Added 10 centers to the network in Florida White Fence, over 10K total joints performed Entered in Indiana at scale with 7 centers Pictured left to right: SurgCenter o
Slide 13: Built upon USPI's premier network in 2020
Built upon USPI’s premier network in 2020 61 73 3,700+ New, high-quality surgical New service line starts New physicians on medical facilities added to the portfolio, including orthopedics, spine, staff, maintaining culture of including five under construction robotics and bariatrics quality and pat
Slide 14: Furthering USPI's growth in 2021
Furthering USPI’s growth in 2021 $150M+ ~25-40 6%+ Planned acquisition capital, with Tuck-in acquisitions and de Expected annual same-store the potential for more with the novo to be funded; excludes surgical revenue growth given right opportunities potential corporate acquisitions track-record of o
Slide 15: Enhancing Care Provided by Our Health Systems
ENHANCING CARE San Antonio, TX Palm Beach, FL PROVIDED BY OUR Launched CT surgery at North Central and a Achieved additional Comprehensive Stroke market-wide neurosciences program certifications at Delray and St. Mary’s HEALTH SYSTEMS Investing in high-quality Phoenix, AZ Palm Springs, CA clinical p
Slide 16: Continue to enrich specialty medical group complement
Continue to enrich specialty medical group complement Dr. Matt Dobbs, Orthopedics Dr. Sonia Eden, Neurosurgery Dr. Emun Abdu, Neurosurgery The Paley Institute, Palm Beach DMC Medical Group, Detroit Abrazo Neuroscience Institute, Phoenix Dr. Richard Farnum, Urogynecology Dr. David Fox, Orthopedics Dr
Slide 17: Strengthening Conifer Prior to the Spin
STRENGTHENING End to End Tech-Enabled Financial Revenue Cycle Point Solutions Services CONIFER PRIOR TO THE SPIN Optimize performance and client experience Activate a more focused growth pipeline Launch financial services for health systems • Focus on cash • Prioritize best-in-class • Deliver effici
Slide 18: Tenet Enterprise Operating Model Advancement
GLOBALIZING & IMPROVING SERVICES Mature the Global Business Center to increase functions supported as well as continue to realize efficiencies and process improvements TENET ENTERPRISE DELIVERING CONTINUOUS IMPROVEMENT OPERATING Continue to utilize analytical insights in action-oriented management p
Slide 19: Scaling the Global Business Center
Tenet Global Business Center SCALING THE # Employees ~5,000 GLOBAL BUSINESS CENTER First large provider to establish a ~3,000 captive center in the Philippines Over 10 core functions, 30 sub- ~1,600 functions with 2,500+ process flows All Tenet markets served with over <50 400 performance metrics in
Slide 20: Promoting Talent & Culture
PROMOTING TALENT & CULTURE We are committed to developing talent, recognizing everyday impact and supporting RECOGNIZING TALENT HEALTHCARE HEROES TENET CARE FUND Continuing to promote talent Expanding a decade-old Supporting ~1,200 colleagues our employees from within, as well as attract tradition i
Slide 21: Environmental, Social, Governance
BUILDING A SUSTAINABLE FUTURE Includes proactive initiatives with measurable impact, such as the reusable sharps container program diverting 600K+ pounds of plastic from landfills ENVIRONMENTAL, RECOGNIZING OUR SOCIAL RESPONSIBILITIES SOCIAL, Includes ensuring access to care with ~$7B in uncompensat
Slide 22: Building a Sustainable Future
Commitment #1 BUILDING A Improving the physical SUSTAINABLE plant FUTURE Commitment #2 We understand our Reducing resource responsibility to create the consumption best places to provide care, while minimizing our impact Commitment #3 on the environment Fostering community alignment & partnerships 2
Slide 23: Continuing Our Commitment to Diversity
CONTINUING OUR COMMITMENT TO Of workforce is Leadership diversity DIVERSITY 47% ethnically diverse 45% based on gender and / or ethnicity We recognize that providing compassionate care to our diverse communities also Of new hires Board diversity means embracing diversity 51% ethnically diverse 58% b
Slide 24: Reflecting the communities we serve within our company
Reflecting the communities we serve within our company Black Hispanic Asian & Other White Detroit El Paso Orange County % Hospital Employees % Hospital Employees % Hospital Employees 2% 5% 13% 4% 29% 21% 35% 52% 2% 11% 81% 46% Note: As of January 2021 24
Slide 25: Sound Governance
SOUND GOVERNANCE Our governance includes diversity of experience and our Board of Director refreshment has been strong with 9 new directors since 2017 25
Slide 26: Changes implemented to improve governance practices
Changes implemented to improve governance practices 1. Strong Lead Director with defined and robust responsibilities 2. Active shareholder outreach and engagement 3. Proxy access on market standard terms 4. Shareholder right to call special meetings at 25% vote threshold Tenet was rated in top 10% o
Slide 27: Tenet Health in 2021
COMPETITIVE ADVANTAGE & STRATEGY Enhanced position in higher acuity, high growth specialties with strong quality, safety, patient and physician experience HIGH-PERFORMANCE CULTURE TENET HEALTH Supported by data-driven decision making, continuous improvement, talent IN 2021 management, and transparen
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