Veradigm Inc. · OTC:MDRX
Veradigm — Allscripts Healthcare Solutions — Investor Day (March 2017)
180 slides from Veradigm's investor day presentation, Mar 21, 2017
Slide 1: Welcome
Welcome Seth Frank, Vice President, Investor Relations Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements and information regarding future economic performance, finances, and the expectations and objectives of Allscripts management. These fo
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes references to non-GAAP gross margin, selling, general and administrative expenses (SG&A), non-GAAP earning per share, Adjusted EBITDA and Adjusted EBITDA, net of non-controlling interest which are also considered non-GAAP financial measures unde
Slide 4: Positioned For Consistent Growth
Positioned For Consistent Growth Paul Black, Chief Executive Officer
Slide 5: Agenda
Time Topic Presenter 7:30 AM Breakfast & Registration 8:00 AM Welcome – Agenda, Disclosure Allscripts Overview and Corporate Strategy Seth Frank, VP Investor Relations Paul Black CEO & Rick Poulton, President 8:40 AM Q&A Session 1: Strategy Paul Black CEO & Rick Poulton, President DOMESTIC CORE SYST
Slide 6: Agenda (continued)
Time Topic Presenter 10:25 AM Break VALUE-BASED CARE 10:35 AM 11:05 AM 11:25 AM – Population Health: Connecting the Community – Emerging Payer Solutions – Precision Medicine and 2bPrecise James Hewitt, EVP Solutions Development Edward Plut, VP Payer Markets Assaf Halevy, CEO 2bPrecise POST ACUTE 11:
Slide 7: Third Largest Global HCIT Company
Third Largest Global HCIT Company NASDAQ: MDRX Public since 1999 Global HQ: Chicago, IL 2016 Non-GAAP Revenue: ~$1.6B ~78% recurring Our Team 7,300 team associates globally Veteran executive leadership Clients, team members in 13 countries incl. Australia, Canada, Israel & UK Our Company
Slide 8: Our Complete Portfolio
Electronic Health Record The power of Allscripts EHRs extends across the continuum, connecting healthcare communities. Precision Medicine & Consumer Solutions Integrated, actionable genomic information delivered directly into clinical workflow. Financial Management Management and operational efficie
Slide 9: Our Breadth and Connectivity
Third Largest Global HCIT Company Our Breadth and Connectivity 45K+ PHYSICIAN PRACTICES ~2,500 HOSPITALS 10M+ CONNECTED CONSUMERS 100K+ COORDINATED COMMUNITY CARE ORGANIZATIONS 14M+ COORDINATED COMMUNITY CARE REFERRALS 2B+ OPEN API DATA SHARES
Slide 10: Global Market - Massive Untapped Need
Global Market - Massive Untapped Need Must Bend the Cost/Quality Curve U.S. >2x $ per capita Source: DTTL Global Life Sciences and Health Care (LSHC) Industry Group analysis of The World Health Organization Global Health Expenditure database (see http://apps.who.int/nha/database for most recent upda
Slide 11: Underwhelming Outcomes: 2014 v 2009
Source: Bloomberg Health-Care Efficiency Index September 28, 2016 Underwhelming Outcomes: 2014 v 2009 Current Rank 2009 Rank Change Country/Region Efficiency Score Life Expectancy Relative Cost % Absolute Cost $ 1 1 - Hong Kong 88.9 83.98 5.40 2,021 2 2 - Singapore 84.2 82.65 4.92 2,752 3 8 5 Spain
Slide 12: Provider Yields Under Pressure
Provider Yields Under Pressure 5% 0% -2% 2006 2016 Hospital Care Prices Physician and Clinical Services 2015 Source: Altarum Institute analysis of U.S. Bureau of Labor Statistics (BLS) data, Q3 2016
Slide 13: Opportunity Arises
Opportunity Arises BIG DATA ANALYTICS CHANGING INTEROPERABILITY STANDARDS ACA UPHEAVAL AI/MACHINE LEARNING GENOMICS GOING MAINSTREAM GOVERNMENT PAYMENT REFORM
Slide 14: Driving Boardroom Dialogue
Driving Boardroom Dialogue Consumer Rising operating costs Acute Volume pressure Doc/ hospital alignment M&A ACA future Provider shortages Rating agencies Source: nrc Health: Healthcare Forecast 2017: Top Trends Driving Board Strategic Priorities Branding/leakage/engagement Costing systems VBC arran
Slide 15: Creating a Growth Opportunity for Our Solutions
Creating a Growth Opportunity for Our Solutions- Not Dependent on Economic Environment
Slide 16: Our Vision: Open, Contemporary Platform
Dynamic Care Plan™ Patient Centric Innovation Coordinated Community Care™ PHARMACY HOSPITAL & HEALTH SYSTEMS SPECIALIST POST ACUTE PHYSICIAN PRACTICE Only Harmonized Patient Record PREDICTIVE HEALTH SCORE™ PAYER ANALYTICS DATA AGGREGATION & CONNECTIVITY CARE COORDINATION PATIENT ENGAGEMENT CLINICAL
Slide 17: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Third largest HCIT company Complete portfolio Solving large problems with technology Positioned exceptionally well in a non-cyclical industry Best Positioning in Our History
Slide 18: Corporate Strategy
Richard Poulton, President Corporate Strategy
Slide 19: Talk About Two Themes: Growth, Building the Foundation
Talk About Two Themes: Growth Building the Foundation
Slide 20: 2013 – What Was the Five-Point Plan?
2013 – What Was the Five-Point Plan? Win back confidence of clients; deliver on commitments Eliminate technology debt in our existing solutions Pivot from up-front license to recurring revenue model Reduce bloated overhead cost structure Create differentiation in both our technology solutions and th
Slide 21: Ramp in Gross R&D Investment
Ramp in Gross R&D Investment New management team has significantly ramped up investment in the business
Slide 22: Internal R&D Plus Targeted Acquisitions Creates Portfolio Differentiation
Internal R&D Plus Targeted Acquisitions Creates Portfolio Differentiation R&D Community Aware EHR Advanced 3rd Party Interface Platform 2bPrecise Genomics Platform Care Coordination Platform Acquisitions Data Harmonization Engine Untethered Patient Portal International PAS Discharge Planning and Mon
Slide 23: Momentum in Reputation and Recognition
Lead To: Momentum in Reputation and Recognition HIT Loyalty Index 2016: Allscripts recognized as a “Most Loyal” vendor by customers – the top tier rating 2016, 2015, 2014 Top Rated Inpatient EHR: Large Hospitals & Academic Medical Centers (+200 beds) 2016, 2015, 2014 Top Ambulatory EHR: Large Group
Slide 24: New Business Wins / Bookings
New Business Wins / Bookings Lead to: Bookings inflection 1-2 years after R&D uptick Netsmart Incremental
Slide 25: Acceleration in Recurring Revenue
Acceleration in Recurring Revenue Recurring revenue is approaching ~80% of total revenue Growth 4% 6% 16% % of total revenue 72% 76% 77% 2017 numbers based on mid-point of guidance range.
Slide 26: Stabilization in Non-recurring
Stabilization in Non-recurring Non-recurring revenues are less significant and no longer expected to be a headwind to growth Growth -7% -15% 7% % of total revenue 28% 24% 23% 2017 numbers based on mid-point of guidance range.
Slide 27: Growing Adjusted EBITDA Margins
Growing Adjusted EBITDA Margins Cost reduction efforts have allowed EBITDA Margins to grow; new revenue growth starting to accelerate this impact See reconciliation of non-GAAP metrics in the appendix of this presentation. 2017 numbers based on mid-point of guidance range.
Slide 28: Diversified Growth Strategy
Diversified Growth Strategy Strong foundational core with multiple growth segments for the future U.S. EHR/Core Systems Recurring Services Value-based Care Tools Global Markets Post-Acute ~15% ~25% ~15% ~40% ~5% Replacement Growth Growth Growth Growth Market Trend 2016 % Revenue
Slide 29: 2016 Examples of Growth Momentum
2016 Examples of Growth Momentum Growth Markets Wins Expansions RCMS Payer Life Sciences
Slide 30: Inflecting Toward Growth
Higher client satisfaction and improved product offering has led to an acceleration in sales and new business… Improved bookings performance has not yet resulted in overall revenue growth due to the multi-year decline in non-recurring revenue, which is finally expected to stabilize in 2017 allowing
Slide 31: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Executing on a consistent strategy since 2013 Strong foundation to support future growth Ramped R&D, advanced reputation 2017 begins to demonstrate inflection point of the past four years efforts Best Positioning in Our History
Slide 32: Domestic Core Systems
Domestic Core Systems Allscripts Investor Conference | March 21, 2017
Slide 33: Hospital & Health System Client Growth Strategy
Hospital & Health System Client Growth Strategy John Sage | SVP, Client Organization
Slide 34: Substantial Institutional Footprint
Substantial Institutional Footprint “Our Client Organization Touches 350 of the Largest Health Care Organizations in the United States…Every Day.”
Slide 35: 2016 Momentum
Record Year New Systems Sales Revenue Cycle Wins Industry/Client Recognition Year over Year Growth Bookings & Contract extensions 10 Net New Sunrise Hospital Footprints in the base OptumCare – Touchworks Competitive wins in the Ambulatory base Sunrise Financial Manager Ambulatory Practice Management
Slide 36: Perfected a High Engagement Model
Perfected a High Engagement Model Program Overview and the Adoption/Outcomes Relationship Optimization Strategy Assess Manage Strategize Adoption & Standardization Clinical/Technical Assessment EMRAM stage 7 Survey Improve Outcomes Clients Outcomes Collaborations Outcomes Board Measure Analytics CPM
Slide 37: Results: Industry & Client Recognition
Results: Industry & Client Recognition Black Book 2014-2017 #1 Inpatient EHR 2017 #1 Population Health Management Solution 2014-2016 Top Ambulatory EHR 2017 Top Rated Core EHR HIT Loyalty Index AMA 2015 Perfect Scores Peer60 2016 Mindshare Leader in Revenue Cycle Management 2016 Mindshare Leader in
Slide 38: Increase in Client Satisfaction
Increase in Client Satisfaction
Slide 39: More Software, Services: Multi-Billion Opportunity
More Software, Services: Multi-Billion Opportunity Add-On Whitespace Clients buy assets frequently Significant shift in the industry Needs tools to address their population health needs Hosting Managed Services Revenue Cycle Management Services (RCMS) Professional Services ED Surgery/Anesthesia Ambu
Slide 40: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Industry leading clients Multi-year renewed focus on enhanced client success Client satisfaction and 3rd party recognition gaining momentum Multiple growth opportunities within the base
Slide 41: New Hospital & Health System Sales
New Hospital & Health System Sales Richard Berner| SVP, Hospitals & Health Systems
Slide 42: Replacement Activity – Multiple Considerations
Large displacement market opportunity Fully integrated solution still key Growing focus on EMR + Population Health Solutions Fiscal Responsibility Returning: ROI/Value Matters Ease of Use Continues To Matter Best Practices + Ability To Innovate Replacement Activity – Multiple Considerations
Slide 43: Replacement Opportunity Meaningful
Replacement Opportunity Meaningful 46% Hospital Facilities Source: KLAS 2016 Survey 53% 18% 16% 12% Tracking 50+ opportunities currently
Slide 44: Go To Market Strategy
Go To Market Strategy Enhanced Functionality Ease of Use Reduce TCO Revenue Cycle, Ambulatory, Mobile, Content Enhanced Interface Lightweight, cloud-based Sunrise + CareInMotion + Precision Medicine + Delivery Model Wins!
Slide 45: Go To Market Strategy
Go To Market Strategy Sunrise + CareInMotion + Precision Medicine + Delivery Model Wins! Leverage Base Drive dialogue, presentations on client outcomes Target/expand geographies w/other Allscripts solutions Scale up with clients as they grow
Slide 46: Go To Market Strategy
Go To Market Strategy Sunrise + CareInMotion + Precision Medicine + Delivery Model Wins! Targeted Campaigns Value = Outcomes/Cost World Class Fully Integrated EMR Best Practices, Agile, Innovate
Slide 47: Go To Market Strategy
Sunrise + CareInMotion + Precision Medicine + Delivery Model Wins! Go To Market Strategy Differentiate w/Oncology & Precision Medicine Functionality, openness, flexibility Population health management functionality – must have Growing focus on effective use of genomic information
Slide 48: Go To Market Strategy
Sunrise + CareInMotion + Precision Medicine + Delivery Model Wins! Go To Market Strategy Consulting Awareness Educate & Partner
Slide 49: New U.S. Logos Since 2013
34 New U.S. Logos Since 2013 – ¾ since ‘15
Slide 50: Compelling and Differentiated Offering
Sunrise + CareInMotion + Precision Medicine Best Practices + Ability To Innovate Value = Outcomes/Cost Delivery Model Executive Relationships/Partnership Ease of Use Compelling and Differentiated Offering
Slide 51: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Replacement opportunity has runway Multiple industry drivers Allscripts offers a complete solution from EHR and beyond Recent momentum, stable client base bodes well for additional growth
Slide 52: Independent Ambulatory Physician Business
Independent Ambulatory Physician Business Steve Lalonde | SVP & General Manager
Slide 53: Long-Standing Ambulatory Leadership
Long-Standing Ambulatory Leadership Professional Suite TouchWorks #1 Black Book Rating #2 Share(1) ~80,000 physicians Sunrise Value-Based Care Revenue Cycle Services ePrescribing 1. EHR Market Share Among Top 10 Competitors Source: HIMSS Analytics 3/17 1998 2000 2001-2007 2008-2012 2014 2016 2017 20
Slide 54: 2016 Momentum
2016 Momentum Largest Signings Ever New Systems Sales RCMS Launch Innovation OptumCare- Touchworks Major Health System IDN – Professional Concentra – Allscripts Practice Management Competitive wins – Net New Footprints Cross/upsell base, legacy conversions 6,000 physicians – multi-specialites $1.5B
Slide 55: EHR Independent Physician Market
EHR Independent Physician Market Allscripts Epic ECLINICALWORKS NextGen Healthcare Cerner AthenaHealth Other 12% 17% 9% 7% 6% 5% Source: EHR Share Among Competitors | Source: HIMSS Analytics 3/17 and Allscripts estimates.
Slide 56: Rising Rankings and Client Satisfaction
Rising Rankings and Client Satisfaction KLAS Revenue Cycle Management Report Highest in overall satisfaction 1-10 physician market 2nd in overall satisfaction in the >10 physician market Black Book Rating 2014-2016 Top Ambulatory EHR 2017 Top Rated Core EHR HIT Loyalty Index 1 Year Trend Sales & Con
Slide 57: Practice Challenges Abound
Practice Challenges Abound Physician frustration! Care is impeded Usability Challenged by usability/functionality CMS Mandate 50% value based pay by 2018 Pay-for-Performance Cash flow worries Regulatory Getting Paid Operational Costs Compliance costs jump Data loss and legal fees Partnerships Joint
Slide 58: Independent Physician Strategy
Independent Physician Strategy Grow with Current Clients Win Net New Clients Differentiate value proposition Expand RCMS business Leverage for Growth: Client base size/breadth Client Rankings Comprehensive Solution Set
Slide 59: Grow with Current Clients
Grow with Current Clients Strengthen Clinical and Financial Foundation Improve Client Productivity Industry Leading Innovation Leading Regulatory Change Requirements Cross-sell and Upsell new systems Drive higher client satisfaction Consultative ‘Go-to” for Practice Optimization Streamline upgrades
Slide 60: Win Net New Footprints
Win Net New Footprints Multi Vendor “one off” Solutions Practices Outsourcing Work ACO’s and MSO’s Employers Private Equity Accelerate Market Replacements Go Where the Business Is Connect our Solutions EHR Platform sale RCMS Population Health Management
Slide 61: Differentiated Value Proposition
Differentiated Value Proposition Surround Solutions Open Platform Population Health Patient Strategy with FollowMyHealth Payerpath Penetration/Buying Rate New Payer Collaboration Offerings 160 ADP Partners 2.25 Billion data shares Increase Physician Productivity CareInMotion Platform Analytics for N
Slide 62: Expand RCMS Business
Expand RCMS Business Leader in Practice Management & Payerpath Acquired Revenue Cycle Services Flexibility Account Management Transparency Full or Shared Services Maximize Revenue Strong Asset Base Differentiated Offering Market Opportunity Convert Existing Clients Target New Business RCMS by the Nu
Slide 63: RCMS By the Numbers
RCMS By the Numbers 99% NET COLLECTIONS MGMA Benchmark 91-93% 5% AVG. INCREASE IN COLLECTIONS 98% FIRST PASS CLEAN CLAIMS RATE MGMA Benchmark low 90% 98% 17% A/R OVER 90 DAYS MGMA Benchmark Mid 20% 2016 2015 5%
Slide 64: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History 2nd largest independent physician base Rising client satisfaction Multiple significant cross-sell opportunities RCMS a major business driver today
Slide 65: Client Delivery and Services
Client Delivery and Services Lisa Khorey | EVP, Client Delivery Organization
Slide 66: Physicians Want EHR Improvements
Although few physicians would stop using their current EHR system, nearly all physicians would like improvements. Source: Deloitte 2016 Survey of US Physicians 3 out of 5 would keep the current EHR system they have and not replace it 62% want interoperability 57% want improved workflow and increased
Slide 67: A Former Client's Perspective
A Former Client’s Perspective Interface Programmer Healthcare Junkie Consultant Allscripts BELIEVER Client Delivery Office Focus: Client centric success powered by Allscripts technology. “I am deeply committed to forming trusting relationships with our clients to better serve their needs and empower
Slide 68: Who has great service?
Who has great service? Healthcare = the next big client service opportunity
Slide 69: Massive Diversity in Client Base
Allscripts Has Massive Diversity in Client Base – Delivering a Consistent Experience is Critical Effective The experience delivers value to customers. Trustworthy The experience instills a sense of confidence. Reliable The experience is consistent and predictable. Products don’t have to be perfect f
Slide 70: Client Delivery Organization Opportunity
Client Delivery Organization Opportunity Drivers Complexity, non-core, capital constraints No scale for efficient technology deployment, staffing Allscripts Offerings Professional Services Hosting Services Managed Services Client Support Services
Slide 71: Significant White Space Growth Opportunity
Significant White Space Growth Opportunity Within Allscripts Client Base Sunrise TouchWorks 90% Hosting Opportunity 46% Hosting Opportunity 65% Outsourcing Opportunity 94% Outsourcing Opportunity
Slide 72: Services as a % of Revenue
Services as a % of Revenue We have room to grow See reconciliation of non-GAAP metrics in the appendix of this presentation.
Slide 73: Case Study – Helping Clients Maximize Allscripts Investments
Case Study – Helping Clients Maximize the Power of Allscripts Investments Customer: Operates in multiple states at more than 100 hospitals, including academic health centers, major teaching hospitals and critical access facilities. Goals: Install management team and adjust staffing levels to meet re
Slide 74: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Major commitment to consistent client execution Multiple “white space” opportunities w/ high ROI Increase Allscripts strategic value to clients
Slide 75: Global Markets
Global Markets Allscripts Investor Conference | March 21, 2017
Slide 76: Global Markets
Global Markets Paul Black | Chief Executive Officer
Slide 77: Our Global Presence
Our Global Presence United Arab Emirates wm - Singapore
Slide 78: Government Drivers: From Treatment to Wellness & Prevention
Government Drivers: From Treatment to Wellness & Prevention Digitization is seen as a key initiative to ‘manage’ costs in many markets, although the point of intersection and timing varies e.g. EHR Admin / Financials Connectivity Patient engagement Clinical documentation COST DEMAND QUALITY EFFICIEN
Slide 79: Global Strategy
Global Strategy Government funded digitization programs Consolidating markets where larger players will make single decisions “Framework” contracts Investment lead Initiatives Leverage existing solutions – speed to value Multi-site – strategic “client partners” Partner locally, enhancing brand aware
Slide 80: Allscripts Value Proposition
Allscripts Value Proposition Innovative solutions, open architecture, Microsoft based Strong value proposition – flexible implementations align w/ client requirements Value Based Care – clinical & financial solutions Subscription, SaaS model Capex/op-ex flexibility Ability to localize the solutions
Slide 81: Country Focus: UK
Country Focus: UK Leverage LLP Framework contract Launch cloud solution Upsell Sunrise to U.K. PAS clients Upsell CareInMotion™ to Sunrise base Deliver all wins at high, referenceable quality
Slide 82: Country Focus: Canada
Country Focus: Canada Manitoba & Saskatchewan Expand Allscripts solutions to at least 18 hospitals over the next 5 years Ontario – Large Replacement Market Replacement market where over 160 hospitals must replace or upgrade in 5-10 years Maritime Provinces NFLD, NB and NS all need to upgrade or repl
Slide 83: Regional Focus: APAC
Regional Focus: APAC Singapore National EMR Underpin MyHealthRecord (Australia) with dbMotion Upsell Sunrise to Core Medical clients (Northwest Territories, S. Australia) Geographic expansion Sunrise via S.E. Asian Private Sponsors Population Health across APAC region driven by rising health costs a
Slide 84: Growing an Anchor Global Base
Growing an “Anchor” Global Base Kings NHS: 970 beds Salford Royal NHS: 728 beds Dudley NHS: 750 beds New Royal Adelaide: 800 beds Sing Health General: 1700 beds Total population of Israel 8.5m citizens covered by dbMotion™ Manitoba Connect >500 sites Fraser Health (British Columbia) – connects 12 ho
Slide 85: Demonstrating Positive, Reproducible Outcomes
20% reduction in chemistry tests DAY ONE go-live (Rockyview General Hospital) Improved diabetes management: two day reduction in LOS Care plans reduce ED visits/cost Significant dollar cost savings Re-engineering blood product work flows drove 50% reduction in consumption of high priced therapeutics
Slide 86: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Strong global reputation Focused strategy Leveraging domestic assets New geography and sell through opportunities
Slide 87: Value-Based Care
Value-Based Care Allscripts Investor Conference | March 21, 2017
Slide 88: Population Health: Connecting the Community
Population Health: Connecting the Community James Hewitt | EVP Solutions Development
Slide 89: Our Vision
Dynamic Care Plan™ Patient Centric Innovation Our Vision Coordinated Community Care™ PHARMACY HOSPITAL & HEALTH SYSTEMS SPECIALIST POST ACUTE PHYSICIAN PRACTICE Only Harmonized Patient Record PREDICTIVE HEALTH SCORE™ PAYER ANALYTICS DATA AGGREGATION & CONNECTIVITY CARE COORDINATION PATIENT ENGAGEMEN
Slide 90: Third Party Clinical Systems
Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs
Slide 91: Data Acquisition
Data Acquisition Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs Integration Agent i o i o i o i o i o i o
Slide 92: Data Harmonization
Data Harmonization Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs Integration Agent i o i o i o i o i o Clinical Data Repository i o
Slide 93: Data View
Data View Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs Integration Agent i o i o i o i o i o Clinical Data Repository Agent Fusion Get VPO CAG i o
Slide 94: Analytics
Analytics Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs Integration Agent i o i o i o i o i o Clinical Data Repository Agent Fusion Get VPO CAG Analytics i o
Slide 95: Care Planning
Care Planning Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs Integration Agent i o i o i o i o i o Clinical Data Repository Agent Fusion Get VPO CAG Analytics Care Director i o
Slide 96: Patient Engagement
Third Party Clinical Systems Epic eClinicalWorks Cerner Athena Allscripts EHRs Integration Agent i o i o i o i o i o Clinical Data Repository Agent Fusion Get VPO CAG Analytics Care Director FollowMyHealth® Achieve Update chart with goal results i o Patient Engagement
Slide 97: CareInMotion Differentiators
CareInMotion™ Differentiators Aggregates community data to create a True Harmonized View of the patient Puts care plans and interventions Into Action Patient-Centric engagement across all settings of care Enables Full Enterprise Financial Performance Management CARE COORDINATION CONNECTIVITY & DATA
Slide 98: Allscripts Cloud Strategy
&! Allscripts —- —_, eames Allscripts Cloud Strategy
Slide 99: Cloud Perspective: Complex Decisions
Cloud Perspective: Complex Decisions Data Applications Runtime Middleware O/S Virtualization Servers Storage Networking Data Applications Runtime Middleware O/S Virtualization Servers Storage Networking Data Applications Runtime Middleware O/S Virtualization Servers Storage Networking Data Applicati
Slide 100: Cloud Benefits
Rapid deployment of our solution sets: No hardware acquisition Standard configurations are managed Reduced direct and indirect total cost of ownership: Capital procurement and associated financial accounting Hardware deployment personnel and related costs Pay for what you use: No upfront procurement
Slide 101: Allscripts Cloud Today & Tomorrow
Allscripts Cloud Today & Tomorrow Private Cloud and Applications: Sunrise, TouchWorks, ProSuite Platform-as-Service: Care Management, Care Director, FollowMyHealth™, PayerPath™ Future Applications: On-premise GA today and native applications in development Hybrid Cloud Solutions Business continuity
Slide 102: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Comprehensive population health platform CareInMotion as community architecture EHR agnostic Significant cloud presence today increasing into the future
Slide 103: Allscripts Emerging Payer Solutions
Allscripts Emerging Payer Solutions Edward M. Plut, PharmD | VP, Payer Markets
Slide 104: Agenda: Allscripts Payer & Life Sciences
Agenda: Allscripts Payer & Life Sciences (PLS) PLS Value Proposition Payer Line of Business Life Sciences Line of Business
Slide 105: Payer & Life Sciences – Our Value
Solutions that bridge gaps and deliver value between Providers / Patients, Payers and Life Sciences. Payer & Life Sciences – Our Value Leveraging MDRX Install base and Core Technology to drive incremental revenue PROVIDERS & PATIENTS LIFE SCIENCES PAYERS/PBMS PHYSICIAN PBM CRO’s PHARMA PAYER PATIENT
Slide 106: Best in Class Network of Payer Clients
Best in Class Network of Payer Clients Allscripts has the most robust network of payer clients and we continue to grow and deepen these relationships
Slide 107: Payer Vendor Complexity
Commercial Risk Lines of Business Individual, Large & Small, Group, etc Clinical Operations Provider Engagement Patient Engagement Clinical Analytics Quality Measures HEDIS STARS Business Analytics Actuarial Underwriting Benefits Design Provider Payment (MIPS/APM) Public Sector Risk Lines of Busines
Slide 108: Allscripts Payer Vendor Complexity
Allscripts Payer Vendor Complexity Commercial Risk Lines of Business Individual, Large & Small, Group, etc. Clinical Operations Provider Engagement Patient Engagement Clinical Analytics Quality Measures HEDIS STARS Business Analytics Actuarial Underwriting Benefits Design Public Sector Risk Lines of
Slide 109: Payer Market Strategy
Payer Market Strategy Allscripts is growing the transactional base of business while moving up the value chain to maximize growth LEVEL 1 “Transactional - Outbound ” LEVEL 2 “Transactional – Bi-Directional” LEVEL 3 “Insights and Analytics” Member Clinical Data Integrated w/provider workflow Risk Adj
Slide 110: Bi-Directional Data Exchange
Bi-Directional Data Exchange We facilitate collaboration between payers & providers through bi-directional data exchange >100 Million Chart Pulls Annually* – converting to electronic and monetized Allscripts Cloud Risk Adjustment Clinical Analytics Clinical Operations Quality Measures CMS audits and
Slide 111: Population Health — CareInMotion
Population Health — CareInMotion™ Proprietary infrastructure solutions for Payers to receive, aggregate, normalize data – common platform for all data analytics Electronic chart Data aggregation (disparate sources) Normalize data Platform to run analytics on normalized data
Slide 112: Payer Analytics, Growth Opportunity
Payer Analytics, Growth Opportunity The number of members (and associated coding requirements) tied to value-based payments has steadily expanded into adjacent markets over the past decade, creating an exponentially larger market opportunity. Healthcare Analytics segment worth $25B by 2021* Allscrip
Slide 113: Payers are Entering an Era of Value-Based Payments
Payer Analytics – Payers are Entering an Era of Value-Based Payments Rising healthcare costs are fueling the migration from legacy volume-based models towards new value-based payment models. Risk Drivers: A comprehensive understanding of a member’s medical history, acuity level, chronic and co-morbi
Slide 114: Provider Engagement – Closing the Loop
Provider Engagement – Closing the Loop After Clinical Data Exchange and Analytics Gaps in Care Rendered in multiple EHR Workflows to maximize provider engagement via 2 Key solutions Direct Messaging to via Payer Health Profile Point of Care Alerts via Payer GIC Allscripts facilitates actionable prov
Slide 115: Electronic Prior Authorization – eAuth
Electronic Prior Authorization – eAuth Allscripts is leading in high growth area to convert manual transactions into monetized efficient electronic transactions (ePA) >180M Prescriptions Impacted by Prior Authorizations Annually* - converting to electronic and monetized Solutions Pro EHR TouchWorks
Slide 116: Life Science Solutions – Pharma, CRO, Data Markets
Life Science Solutions – Pharma, CRO, Data Markets RWE & COMMERCIAL ANALYTICS CLINICAL DECISION SUPPORT CARE COORDINATION CLINICAL RESEARCH CLINICAL OMICS PATIENT ADHERENCE MOBILITY AND WEARABLES PATIENT ENGAGEMENT Precision Medicine & Consumer Solutions Behavior Change Population Health Management
Slide 117: Allscripts Clinical Trial Solutions
Source: Examination of Clinical Trial Costs and Barriers for Drug Development. July 25, 2014. Study prepared by ERG under Assistant Secretary for Planning and Evaluation. Allscripts Clinical Trial Solutions Allscripts’ value-add enables efficiencies across clinical trial phases, resulting in study c
Slide 118: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Leveraging the EHR base Innovative solutions which simplify Payer Supply Chain Strong growth in Payer and Life Science segment
Slide 119: Precision Medicine and 2bPrecise
Precision Medicine and 2bPrecise Assaf Halevy | Chief Executive Officer, 2bPrecise
Slide 120: The Shift: From Generalized Care to Precision Medicine
Providers: Genomic testing in a subgroup of patients suffering from cardiac disease, resulted in a 30% reduction in hospital admissions Patients: Genetic factors play a role in 9 out of the 10 the leading causes of death Pharma: $7.5 billion - size of the pharmacogenomics market Payer: $25 billion a
Slide 121: Challenges in Precision Medicine
Challenges in Precision Medicine Physicians are overwhelmed by the sheer number and types of genetic tests, and need support in their interpretation Genomic insights are not available in the already busy clinical workflow Patients expect their physician to understand their genetic results 2bPrecise
Slide 122: Obstacles Remain: Paper Not Actionable
Obstacles Remain: Paper Not Actionable
Slide 123: Enables precision medicine by merging clinical and genetic data
Enables precision medicine by merging clinical and genetic data to deliver actionable insights to clinicians
Slide 124: Where We Matter
Where We Matter Academic Research Institutions Integrated Health Systems Accountable Care Organizations Cancer Centers Children’s Hospitals Acute Psychiatric Facilities And More To Patients!
Slide 125: 2bPrecise Turns Silos of Data to Actionable Knowledge
ACQUIRE Clinical Information HARMONIZE ENGAGE Identify Populations and Trends Research Ready Clinical/Genomic Correlation Stratify/Manage Risk Groups In-Workflow Genomic Enablement Diagnosis Treatment Prevention 2bPrecise Turns Silos of Data to Actionable Knowledge Genomic Information Cross Clinical
Slide 126: 2bPrecise – Care Delivery and Research Value
2bPrecise – Care Delivery and Research Value Clinical Programs Provider Geneticist Researcher GEM - Genomic EHR Mentor Population Analysis Molecular Diagnostics Prediction Research
Slide 127: On-demand, In-workflow Intelligence
On-demand, In-workflow Intelligence
Slide 128: On-demand, In-workflow Intelligence
On-demand, In-workflow Intelligence
Slide 129: Early Adopters Program
Early Adopters Program Value Based Care & Research Focused
Slide 130: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Leading innovation Disruptive solutions for a paradigm shift in care Actionable clinical genomic information at the EHR-agnostic point of care Strong early partnerships
Slide 131: Post-Acute: Netsmart Strategy
Post-Acute: Netsmart Strategy Kevin Scalia | EVP, Corporate Development
Slide 132: Netsmart's Solutions Today, Building Tomorrow
NETSMART 'S SOLUTIONS TODAY BUILDING TOMORROW @ Kansas ~ ~e New York be v v at SOLUTIONS @® % we © | COMMUNITIES WE SERVE @ Fe # PROVIDERS CLIENTORGANIZATIONS CONSUMERS 66480846
Slide 133: Total US Annual Healthcare Spend and Netsmart TAM
Total US annual healthcare spend: $3.2 trillion All Other Hospital Care Long-term Care Durable Medical Equipment Rx Drugs Dental Services Medical Supplies Human Services $317 billion Behavioral Health Public Health Child/Family Services Substance Use Intellectual/Developmental Disabilities Software
Slide 134: Large Greenfield Opportunity in HHS vs. Physical Health
Acute Care Primary Care HHS Utilizes a Certified EHR No Commercial Solution Only 50% of Human Services providers utilize a commercial EHR Large Greenfield Opportunity in HHS vs. Physical Health
Slide 135: Even Lower Adoption in Homecare and LTC
Source: http://aspe.hhs.gov/daltcp/reports/2013/HIEengage.pdf *EHR adoption rates are measured differently across provider types and comparisons across provider type is not advised. **Survey question was adoption of “electronic information systems.” 43%** 41% 17% 6% Skilled Nursing Facilities Home a
Slide 136: What Our Communities Have In Common
What Our Communities Have In Common Need to connect to the rest of healthcare Play a care coordination role for the community Highly mobile workforce High complexity reimbursement level/models Shift towards value-based care Different margin profile than acute care Care models tend to be less episodi
Slide 137: Netsmart's Vision
Netsmart’s 10 Year-Vision Become the platform that serves the providers that traditionally sit outside of health systems Solidify the Chassis Optimize the Value Integrated Health Clarify and complete solution strategy Enhance and expand support models Create a centralized implementation and upgrade
Slide 138: Leveraging the Chassis to Scale Netsmart
Future Wound Care Therapies Rehab Addiction Treatment LTC Markets: Skilled Nursing, Memory Care, Assisted Living Leveraging the Chassis to Scale Netsmart Creating Value from the Chassis Proven teams, processes and delivery functions accelerate strategies Provides cost and productivity synergies for
Slide 139: Netsmart Solutions and Services
Revenue Cycle Benchmarking Management and Analytics, Hosted Services ‘nd Solutions Implementation ‘and Consulting Services G saya we Driving Value-based Care Pchavira ares pe ath fiction Te in sot erpmer ba en arate oa inuing cars Hospice Private Duty &Palative Care Pub Medependent LS vende ‘ent Com
Slide 140: Netsmart Solutions are Core to Delivering Value-Based Care
Hosting & SaaS CLINICAL INNOVATION CARE COORDINATION BUSINESS EFFICIENCIES BENCHMARKING DATA ANALYTICS DELIVERING VALUE-BASED CARE Value OUTCOMES COST = EMR & Medication Management Clinical Decision Support Information Exchange Primary Care Integration Meaningful Use Population & Community Health Ma
Slide 141: Growth Strategies
Growth Strategies ACQUISITION INNOVATIONS CLIENT ALIGNMENT Continue strategic acquisitions Continue to develop innovative solutions and services Capitalize on greenfield opportunities in Human Services, LTC and Homecare markets Drive incremental revenue from existing client base by increasing share
Slide 142: Netsmart's Scale is a Differentiator
100% Estimated Relative Revenue 1 1 Management Estimates Netsmart’s Scale is a Differentiator in Our Marketplace: Nearly 2x Next Largest Competitor Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Competitor 6 Competitor 7 Competitor 8 Competitor 9 Competitor 12 Competitor 11 Competi
Slide 143: Post-Acute Market Entry
Post-Acute Market Entry Assisted/ Independent Living CCRC Skilled Nursing Adult Day Care Memory Care Only integrated platform across LTC/HC Clients very positive about merger Clients are eager for care coordination and connections: referrals, CCD, lab results Substantial investments initiated in sol
Slide 144: The Move To Value
The Move To Value
Slide 145: Depression in Long-Term Care Residents
may experience either major depression or clinically Up to 35% of residents in long-term care facilities significant depressive symptoms Source: Department of Psychiatry and Behavioral Sciences, Duke University Medical Center, Durham, NC 27710, USA.
Slide 146: Chronic Conditions and Comorbid Depression
have significantly more ambulatory visits, emergency Source: Stewart WF, Ricci JA, Chee E, Hahn SR, Morganstein D. Cost of lost productive work time among us workers with depression. JAMA. 2003;289:3135-3144. such as CHD, and comorbid depression Patients who have a high chronic medical condition, ro
Slide 147: Behavioral Health Co-morbidities Impact on Healthcare Costs
3.1X 2.6X 2.8X 3.9X 2.3X Annual Per Capita Costs No Mental Illness and No Drug/Alcohol Mental Illness and Drug/Alcohol Behavioral Health Co-morbidities Have Significant Impact On Healthcare Costs
Slide 148: Risk Continuum
COMPLEXITY Capitation Full risk Population target Disease specific/ All in Fee-for-service One service One payment Case Rate Group of services Unified payment Periodic payment Bundled Payment Bundle of services Unified payment Quality targets Episode-based payment Total Health Outcomes Shared risk o
Slide 149: Level of Risk Bearing
Source: The Advisory Board Company and William Blair LEVEL OF RISK BEARING Pay-for-performance Bundled payments Shared-savings models Shared-risk models Full risk models Hospital value-based payments BCPI initiative Medicare shared-savings program (MSSP) Track 1 (savings only, no downside risk) MSSP
Slide 150: Hospital View of Biggest Technology Gaps
Source: KLAS Survey Hospital View of The Biggest Technology Gaps As They Prepare for Value-based Care CareFabric Platform
Slide 151: Expanded Connectivity – CareConnect
945,658 INDIVIDUAL PROVIDERS 68,819 ORGANIZATIONS Expanded Connectivity – CareConnect In Process OmniCare PharMerica FrameworkLTC QS/1 IMMUNIZATION REGISTRIES HIT PARTNERS HEALTH INFORMATION EXCHANGES LABORATORIES NETSMART REFERRALS
Slide 152: CMHC to Acute Care myAvatar
CMHC to Acute Care myAvatar myAvatar
Slide 153: Population Health Strategy
Population to engage Care coordination/ care management Population Health Strategy
Slide 154: BH/HC/LTC as a Care Coordinator
BH/HC/LTC as a Care Coordinator Attributed to your ACO Attributed to your Bundle Attributed to another ACO Attributed to another hospital's Bundle Health System CCD Data | ED Alerts | ACO Pts | Bundle Pts | Care Plans | Referral Data Primary Care Office Skilled Nursing Facility Outpatient Clinic Con
Slide 155: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Best Positioning in Our History Largest community care provider in the second largest area of healthcare spend Significant greenfield opportunity Multiple segments and growth opportunities with high barriers to entry Critical component f
Slide 156: Financial Model & Capital Allocation
Financial Model & Capital Allocation Allscripts Investor Conference | March 21, 2017
Slide 157: Financial Model & Capital Allocation
Melinda Whittington, CFO Financial Model & Capital Allocation
Slide 158: Allscripts Strong Financial Results
Allscripts Strong Financial Results 2016 Bookings $1.3B 18% Backlog $4B 11% Revenue $1.6B 14% $1,217M $359M Recurring Revenue Non-Recurring Revenue Software Revenue Services Revenue $543M $1,033M See reconciliation of non-GAAP metrics in the appendix of this presentation.
Slide 159: Allscripts Strong Financial Results
Allscripts Strong Financial Results 2016 Adjusted EBITDA $304M 25% Non-GAAP EPS $0.55 17% Operating Cash Flow $269M Free Cash Flow $131M FCF Yield 6% See reconciliation of non-GAAP metrics in the appendix of this presentation.
Slide 160: Strong Sales Trends
Strong Sales Trends Dollars in millions. See reconciliation of non-GAAP metrics in the appendix of this presentation.
Slide 161: Expanding Margins
Expanding Margins See reconciliation of non-GAAP metrics in the appendix of this presentation.
Slide 162: Strong Cash Delivery Enables Capital Allocation Strategy
Strong Cash Delivery Enables Capital Allocation Strategy Invest to Accelerate Growth Continue to innovate across our growth pillars Gross R&D Spend = $270M in 2016 M&A Broaden portfolio with opportunistic M&A. In 2016: Core Medical Solutions; International expansion Careport; Value Based Care expans
Slide 163: History of Delivering on Commitments
History of Delivering on Commitments METRICS 2013 2014 2015 2016 3-Yr CAGR ('13-'16) 2-Yr CAGR ('14-'16) 3-Yr Outlook JPM 2014 ('13-16) Bookings $901 $923 $1,111 $1,311 13.3% 19.2% NA Revenue $1,383 $1,390 $1,386 $1,576 4.4% 6.5% 5-8% Adjusted EBITDA (100%) $179.8 $199.0 $242.6 $303.7 19.1% 23.5% 18
Slide 164: 2017 Outlook
2017 Outlook Revenue between $1.71 billion and $1.74 billion Adjusted EBITDA between $345 million and $365 million, consisting of: Allscripts, excluding Netsmart, Adjusted EBITDA between $255-265 million, and; Netsmart Adjusted EBITDA between $90-100 million Non-GAAP earnings per share growth of bet
Slide 165: Allscripts 3-Year CAGR Targets 2018-2020
Allscripts 3-Year CAGR Targets 2018-2020 +6 to 8% Non-GAAP Revenue +12 to 15% Non-GAAP EPS Consistent gross margins Improved services margin, offset by higher cap software amortization Improved operating leverage Overhead expenses grow only with inflation Utilize excess free cash flow Share repurcha
Slide 166: Diversified Growth Strategy
Diversified Growth Strategy Strong foundational core with multiple growth segments for the future U.S. EHR/Core Systems Value-based Care Tools Recurring Services Global Markets Post-Acute ~15% ~15% ~25% ~40% ~5% Replacement Growth Growth Growth Growth Market Trend 2016 % Revenue
Slide 167: Top Line Growth Derived Across Multiple Lines
Top Line Growth Derived Across Multiple Lines CAGR Relative Size Weighted Impact Core Plus Managed Services ~4-5% x 65% 2.6 – 3.3 Value Based Care Tools ~9-13% x 15% 1.4 – 2.0 International ~10-18% x 5% 0.5 – 0.9 Post-Acute ~10-12% x 15% 1.5 – 1.8 6.0% – 8.0% 3-Year 2018-2020 Non-GAAP Revenue CAGR
Slide 168: Netsmart – Different Capital Structure Than Allscripts
Three large post-acute HCIT assets(1) sold at significant EBITDA multiples premiums to traditional HCIT assets (range ~12-16x) Extrapolating such post-acute multiples and their higher than sector average growth rates - Allscripts investment in Netsmart should be calculated as follows… Requiring diff
Slide 169: Netsmart Valuation Considerations - Illustrative
Scenario 1 Scenario 2 2017 Adjusted EBITDA mid-point $95M $95M 3-Year CAGR (>50% core revenue growth) 15% 18% 2020 Adjusted EBITDA(E) $144 $156 Market Multiple 10x 14x Enterprise Value $1,440 $2,184 Less Debt ($600) ($600) Theoretical Equity Value $840 $1,584 Allscripts Share 49% 49% Potential Value
Slide 170: Best Positioning in Our History
OPTIMIZED FOR WHAT’S NEXT PATIENTS DELIVERY SYSTEMS CLINICIANS Strong 2016 performance Sector-leading cash flow yield - clear capital deployment strategy to drive shareholder value Revenue visibility generated by diverse business lines Three-year targets illustrate confidence in sustainable growth N
Slide 171: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
Slide 172: Reconciliations: Services as a % of Non-GAAP Revenue
Reconciliations: Services as a % of Non-GAAP Revenue
Slide 173: Reconciliations: Rec/Non-Rec and SW/Services
Reconciliations: Rec/Non-Rec and SW/Services
Slide 174: Reconciliations: Adjusted EBITDA & Margins ('15-16)
Reconciliations: Adjusted EBITDA & Margins (‘15-16)
Slide 175: Reconciliations: Adjusted EBITDA & Margins ('13-14)
Reconciliations: Adjusted EBITDA & Margins (‘13-14)
Slide 176: Reconciliations: Adjusted EBITDA & Margins ('12)
Reconciliations: Adjusted EBITDA & Margins (‘12)
Slide 177: Reconciliations: Non-GAAP EPS ('15-16)
Reconciliations: Non-GAAP EPS (‘15-16)
Slide 178: Reconciliations: Non-GAAP EPS ('13-14)
Reconciliations: Non-GAAP EPS (‘13-14)
Slide 179: Reconciliations: Non-GAAP Gross Profit and Margin
Reconciliations: Non-GAAP Gross Profit and Margin
Slide 180: Reconciliations: Free Cash Flow
Reconciliations: Free Cash Flow
Allscripts Healthcare Solutions — Investor Day (March 2017) on 6ix