Encompass Health Corporation · NYSE:EHC
Encompass Health — HealthSouth — Investor Day (June 2010)
31 slides from Encompass Health's investor day presentation, Jun 9, 2010
Slide 1: HealthSouth Rehabilitation Hospital of Northern Virginia
HealthSouth Rehabilitation Hospital of Northern Virginia June 9, 2010
Slide 2: Note Regarding Forward-Looking Statements
Note Regarding Forward-Looking Statements The information contained in this presentation includes certain estimates, projections and other forward-looking information that reflect our current views with respect to future events and financial performance. These estimates, projections and other forwar
Slide 3: Welcome
Welcome Christina Stover: Jay Grinney: Doug Coltharp: Mark Tarr: Randy Carpenter: Steve Royal: Mary Ann Arico: Terry Maxhimer: Jeff Ruskin: Rusty Yeager: Dayle Unger: CEO, HealthSouth Rehabilitation Hospital of Northern Virginia President and Chief Executive Officer EVP and Chief Financial Officer E
Slide 4: Agenda
Agenda 1:00 p.m. 2:00 p.m. 2:30 p.m. 3:00 p.m. Overview, Strategy and Performance Update Development Process, De novo Trends and Market Dynamics for Loudoun County Clinical Information System Tour Group 1 (Christina Stover, Mark Tarr, Dayle Unger) Group 2 (Jeff Ruskan, Jay Grinney, Randy Carpenter)
Slide 5: Operating Performance Update
• Reminder : Based on the results of Q1, the Company raised its 2010 full-year performance forecast to the high end of the guidance ranges. • Good performance through May (volume, expense management and pricing). § Volume: solid in April, soft in May, appears to be rebounding in June § Expenses: con
Slide 6: Largest Provider of Inpatient Rehabilitative Healthcare
HEALTHSOUTH Largest Provider of Inpatient Rehabilitative Healthcare HealthSouth Rehabil Hospital of Northern Virginia Portfol 22,000 Employees 38 Outpatient Rehab Satellite Clinics 6 Long-Term Acute Care Hospitals SM —. o. 25 Hospital-Based Home Health > ° ° ies Agencies : 2 oe 8 @IRH OLTCH eo Healt
Slide 7: Strategy Recap
Strategy Recap ü Priority : Reduce our leverage and strengthen our balance sheet - No obvious near-term debt repayment opportunities - 10 ¾ Senior Notes callable June 2011 at 105 ⅜ - 2010 focus: growing Adjusted Consolidated EBITDA (1) to reduce leverage ü Near-term : Capitalize on our market-leadin
Slide 8: Agenda
Agenda 1:00 p.m . 2:00 p.m. 2:30 p.m. 3:00 p.m. Overview, Strategy and Performance Update Development Process, De novo Trends and Market Dynamics for Loudoun County Clinical Information System Tour Group 1 (Christina Stover, Mark Tarr, Dayle Unger) Group 2 (Jeff Ruskan, Jay Grinney, Randy Carpenter)
Slide 9: National Market Assessment
National Market Assessment ( 3,141 Counties in 48 states studied) • Population and Demographics • Acute Care Referral Sources • Inpatient Rehab Competition • SNF Presence • Payer Environment • CON/Non-CON Target Opportunity List ( 160 Opportunities Identified ) Existing IRF Assessment Corporate Prio
Slide 10: De Novo Evaluation Process
CON Approval Site Selection Cost Assessment Proforma Financials Execution De Novo Evaluation Process • Permitting • Contract for land NO GO GO
Slide 11: Proforma Bed De Novo
Proforma 40 Bed De Novo Target Cash Pay-back 6-7 years
Slide 12: De Novo Timeline
De Novo Timeline With CON Planning & Design Zoning —_ Groundbreaking CON Process Construction Internal Day 1 Month 20 Without CON Planning & ; Design Zoning Groundbreaking Construction Internal Opening Day1 Month 11 Month 20 Opening Month 32 12
Slide 13: De Novo Occupancy and Hospital EBITDA Trends
De Novo Occupancy and Hospital EBITDA” Trends 80% ae eee ~ 7 im on. 7 / [| - Ws ~ MNT Occupancy —=De Novo ae De Novo —_ —*DeNovo HLS Average 2009 Occupancy 0% 192 3 4 5 6 7T 8 9 0 14 12 13 14 «15 (16 Months ©) Hospital EBITDA = earnings before interest, taxes, depreciation and amortization directly
Slide 14: Northern Virginia Market Dynamics
HealthSouth Rehabilitation Hospital of Northern Virginia Market Dynamics ü COPN (certificate of public need) state ü Five acute care hospitals without rehab within a 30 minute drive time ü Low penetration of skilled nursing facilities ü Rehab CAGR above U.S. average ü Below U.S. average unemployment
Slide 15: Agenda
Agenda 1:00 p.m. 2:00 p.m. 2:30 p.m. 3:00 p.m . Overview, Strategy and Performance Update Development Process, De novo Trends and Market Dynamics for Loudoun County Clinical Information System Tour Group 1 (Christina Stover, Mark Tarr, Dayle Unger) Group 2 (Jeff Ruskan, Jay Grinney, Randy Carpenter)
Slide 16: Clinical Information Systems in Healthcare
Clinical Information Systems in Healthcare The Facts Ø Clinical information systems (CIS) are a key component of successful quality, safety and patient satisfaction initiatives in healthcare Ø Hospitals that implemented Computerized Physician Order Entry (CPOE) reported better quality of care and lo
Slide 17: EMR adoption stages (HIMSS Analytics)
Stage 6 Physician documentation (structured templates), full Clinical Decision Support (variance & compliance), full Digital Imaging Stage 7 Complete EMR; standardized transactions to share data; Data warehousing; Data continuity with Emergency Dept, ambulatory Stage 1 Ancillaries - Lab, Radiology,
Slide 18: Electronic Medical Record (EMR) Adoption Model
Electronic Medical Record (EMR) Adoption Model Ø Most U.S. hospitals are at Stage 3 (Foundation Stage) or below Ø Stages 0, 1 and 2 are slowing Ø Stage 3 is growing the fastest - 10% in 2005 - 50.9% in 2009 Ø Advanced Stages 3 through 7 - Require only one service or unit to be implemented - Reduce m
Slide 19: HealthSouth Clinical Information Technology Current State
Item Current State Comments Clinical Documentation Mostly manual Some MS Word templates Order Management Manual Team working on automation with pilot in multiple hospitals. Pharmacy Automated All HealthSouth IRFs, primary product is lacking functionality. Lab/Radiology Imaging N/A In house not requi
Slide 20: Vendor Selection Process
– 2005 - Request for Proposal (13 vendors responded; 3 finalists) – 2007 Project on hold due to business unit divestitures – 2009 Cerner final selection – July 2009 Core team assembled – Integrated solution meeting all functional requirements – Enterprise capable vendor with scalability – Positive r
Slide 21: Key Features
Patient Safety Features: Operational Efficiency: Focused online documentation (physician, nursing, therapy) Point of care charge capture (therapy intensity) Real time patient condition awareness (medical and functional) from any team member support device Results reporting feeds from legacy and outs
Slide 22: Project Timeline
Project Timeline Clinical Visioning Vendor Evaluations Project On Hold (Divestitures) Project Restart & Vendor Re-evaluations Cerner Selected Feb Pilot Contract Negotiation Jun 2009 Pilot Project Kickoff Aug 2009 Benefits Recognition Study Jul - Dec 2010 Pilot “Go-Live” Jun 2010 Executive/ Board Rev
Slide 23: Agenda
Agenda 1:00 p.m. 2:00 p.m. 2:30 p.m. 3:00 p.m. Overview, Strategy and Performance Update Development Process, De novo Trends and Market Dynamics for Loudoun County Clinical Information System Tour Group 1 (Christina Stover, Mark Tarr, Dayle Unger) Group 2 (Jeff Ruskan, Jay Grinney, Randy Carpenter)
Slide 24: Appendix
Appendix
Slide 25: HealthSouth Rehabilitation Hospital of Northern Virginia
HealthSouth Rehabilitation Hospital of Northern Virginia • Grand Opening June 2010 • 40 private beds with flat screen televisions and wireless internet capability • 47,500 square feet • Expected to generate approximately 80 new, full-time jobs • Latest rehabilitation equipment and therapy tools • Po
Slide 26: Our Rehabilitation Disciplines
Our Rehabilitation Disciplines Rehabilitation physician : Daily visits by a physician trained in physical medicine and rehabilitation. Rehabilitation nursing : Implement each patient’s medical care program as directed by his or her physician. Physical therapy : Evaluate and design a treatment progra
Slide 27: Our Rehabilitation Disciplines (cont'd)
Our Rehabilitation Disciplines (cont’d) Speech-language pathology : Assess and treat individuals with communication and comprehension disorders, cognitive difficulties and swallowing disorders. Dietary and nutritional counseling : Supervise all meals to ensure patients receive the necessary nutritio
Slide 28: State-of-the-art rehabilitation technologies
State-of-the-art rehabilitation technologies : VitalStim VitalStim® Therapy is an innovative procedure that facilitates retraining of throat muscles affected by dysphagia, or difficulty swallowing. Reo Go The Reo Go™ provides a platform for robot-assisted therapy that retrains arm movements for pati
Slide 29: State-of-the-art rehabilitation technologies
State-of-the-art rehabilitation technologies : AutoAmbulator Bringing cutting-edge technology into the rehabilitation process, the AutoAmbulator is an innovative therapeutic device designed to help rehabilitate patients who experience difficulty walking. LiteGait Ambulation training device - used wi
Slide 30: Reconciliation of Net Income to Adjusted Consolidated EBITDA
Reconciliation of Net Income to Adjusted Income from Continuing Operations and Adjusted Consolidated EBITDA (1) (3) (4)
Slide 31: Reconciliation Notes
Reconciliation Notes 1. Adjusted income from continuing operations and Adjusted Consolidated EBITDA are non-GAAP financial measures. The Company’s leverage ratio (Total Consolidated Debt to Adjusted Consolidated EBITDA for the trailing four quarters) is, likewise, a non-GAAP financial measure. Manag