Encompass Health Corporation · NYSE:EHC
Encompass Health — William Blair 38th Annual Growth Stock Conference (June 2018)
18 slides from Encompass Health's conference presentation, Jun 12, 2018
Slide 1: William Blair 38th Annual Growth Stock Conference
William Blair 38th Annual Growth Stock Conference Mark Tarr, President and Chief Executive Officer June 12, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements The information contained in this presentation includes certain estimates, projections and other forward-looking information that reflect Encompass Health’s current outlook, views and plans with respect to future events, including legislative and regulatory developments, s
Slide 3: Company Overview - Encompass Health
Company Overview - Encompass Health National leader of inpatient rehabilitation hospitals and home-based care 127 268 36 IRFs Home Health States and and Hospice Puerto Rico Agencies Committed to delivering high-quality, cost-effective care across the post-acute continuum Encompass Health 3
Slide 4: Company Overview - Inpatient Rehabilitation
Company Overview - Inpatient Rehabilitation Largest owner and operator of IRFs 127 Inpatient Rehabilitation Hospitals 22% 30% 42 Operate as joint ventures of Licensed beds of Medicare with acute care hospitals patients served 31 105 States and Puerto Rico Hospitals hold one or more disease-specific
Slide 5: Company Overview - Home Health and Hospice
Company Overview - Home Health and Hospice 4th largest provider of Medicare-certified skilled home health services 96% Home health agencies ≥ 3 stars for quality of care 212 56 30 95% Home Health Hospice States Locations Locations Home health agencies ≥ 3 stars in patient satisfaction ~8,800 ~128,00
Slide 6: Market Overlap: Inpatient Rehabilitation and Home Health
Market Overlap Inpatient Rehabilitation and Home Health ~60% of EHC's IRFs have an EHC home health location within an approximate 30-mile radius. Encompass Health 6
Slide 7: Clinical Collaboration
Clinical Collaboration Improving the Patient Experience and Reducing Total Costs Through Integrated Care Delivery 33.5% 28.9% Collaboration Rate Collaboration Rate 460 Basis Points 5,409 Year-Over-Year Increase 4,308 Near-term Goal = 35% - 40% 10,603 10,726 Encompass Health Home Health Encompass Hea
Slide 8: Strategy
Strategy The Company’s strategy is to expand its network of inpatient rehabilitation hospitals and home health and hospice agencies, further strengthen its relationships with healthcare systems, provider networks, and payors in order to connect patient care across the healthcare continuum, and to de
Slide 9: Quality
Quality Inpatient Home Health Rehabilitation Discharge to 30-day hospital community readmission 320 bps better 79.2% 90 bps 16.9% better 76.0% 16.0% Industry Average Encompass Health Industry Average Encompass Health 280 certified clinical programs Developed programs to create including 103 hospital
Slide 10: Cost Effectiveness
Cost Effectiveness Inpatient Rehabilitation Average Average Average Average Medicare Case Cost Payment Beds Discharges Mix per per per IRF per IRF Index Discharge Discharge Encompass Health 67 950 1.28 $13,505 $20,300 Industry Average 34 357 1.25 $18,507 $21,160 (27.0)% Home Health Average Average A
Slide 11: Technology
Technology Working together to improve efficiency and outcomes homecare POST-ACUTE INNOVATION CENTER homebase TM Encompass Health 11
Slide 12: Both Segments Benefit from a Demographic Tailwind
Both Segments Benefit from a Demographic Tailwind: Growth in the Medicare Beneficiary Population Projected Population of Age 65+ Baby Boomer wave Millions reaches average age of an Encompass Health 80 Medicare patient (~76). 70 60 ~3% CAGR CAGR (Population Growth by Age) 50 Age 2014 2018 2022 40 46%
Slide 13: Multi-faceted Growth Strategy
Multi-faceted Growth Strategy Track record of consistent market share gains IRF organic growth supplemented by bed additions De novos and acquisitions complement organic growth Maturation of acquired home health locations Home health acquisitions and new-store growth prioritized in Encompass Health
Slide 14: IRF Growth: Target 4 to 6 new IRFs per year
IRF Growth Target 4 to 6 new IRFs per year Inpatient Rehabilitation Facilities # of New Beds... 2018 2019 De Novo: 1) Shelby County, AL 34 — 2) Hilton Head, SC 38 — 3) Murrieta, CA — 50 4) Katy, TX — 40 Joint Ventures: 5) Murrells Inlet, SC 29 — 6) Winston-Salem, NC 68 — 7) Lubbock, TX — 40 8) Boise
Slide 15: Home Health and Hospice Growth
Home Health and Hospice Growth Target $50 to $100 million in home health and hospice acquisitions per year Camellia Healthcare 18 hospice 14 home health 2 private duty Completed acquisition May 1, 2018 Encompass Health 15
Slide 16: Adjusted Free Cash Flow and Priorities
Adjusted Free Cash Flow and Priorities 2018 Assumptions (In Millions) Adjusted Free Cash Flow $340 to $440 Priorities Growth in Core Business IRF bed expansions $30 to $40 New IRFs - De novos 80 to 110 - Acquisitions opportunistic - Replacement IRFs and other 40 to 50 Home health and hospice acquisi
Slide 17: Strong and Sustainable Business Fundamentals
Strong and Sustainable Business Fundamentals Attractive Healthcare Sectors Industry Leading Positions Cost-Effectiveness Real Estate Ownership Financial Strength Growth Opportunities Encompass Health 17
Slide 18: Committed to Delivering High-Quality, Cost-Effective Care Across the Post-Acute Continuum
Committed to Delivering High-Quality, Cost-Effective Care Across the Post-Acute Continuum
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