Xerox Holdings Corporation · NASDAQ:XRX
Xerox — Investor Day (March 2013)
61 slides from Xerox's investor day presentation, Mar 7, 2013
Slide 1: Xerox Healthcare Services Analyst Day
Xerox Healthcare Services Analyst Day Hosted by PARC, A Xerox Company March 7, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to id
Slide 3: Today's Discussion
Today’s Discussion • Showcase Xerox’s leadership position in healthcare services • Review growth opportunities aligned with trends in industry and regulatory reforms • Highlight differentiating innovation that simplifies complexity of healthcare administration 3
Slide 4: Large Healthcare Exposure
Large Healthcare Exposure (Percentages represent percent of total Services revenue) Document Outsourcing State Government Commercial IT HR Services Transportation & Local (~30%) (~12%) (~12%) (~10%) Government (~8%) • Electronic toll collection • Medicaid administrative • Data center outsourcing • C
Slide 5: Healthcare - Attractive Growth and Profitability
Healthcare - Attractive Growth and Profitability Financial Human Services Resources Healthcare growth and Health- care Provider Healthcare Payer profitability above Operating Margin % Transportation Services average Central Managed Retail, Gov’t Print Travel Customer Investing in innovation, Service
Slide 6: Xerox Touches All Aspects of Healthcare
Xerox Touches All Aspects of Healthcare 6
Slide 7: Healthcare Services Analyst Day Agenda
Healthcare Services Analyst Day Agenda Welcome and Overview Jim Lesko • Xerox in Healthcare Connie Harvey • Our Government Healthcare business Mary Scanlon • Our Payer business Mike Morrison • Our Provider business Charles Fred Break Lunch – PARC & Healthcare Innovation overview Steve Hoover / RG Co
Slide 8: Xerox in Healthcare
Xerox in Healthcare March 7, 2013
Slide 9: Xerox Healthcare Services: Fuels Xerox Growth
Xerox Healthcare Services: Fuels Xerox Growth • $2B+ business -> among largest players in U.S. Healthcare • Double-digit revenue growth; mid-teens operating margins • Significant market penetration across key segments • Capturing business in emerging areas with new capabilities 9
Slide 10: Xerox Healthcare - Did You Know?
Xerox Healthcare - Did You Know? 1700+ 900+ 22+ Hospitals served Million healthcare Thousand employees claims processed dedicated to healthcare per year 36 100 $2B+ Million people served Percent of the top ten Of Xerox services by government health BCBS organizations revenues services are clients 20
Slide 11: Growing Healthcare Costs Drive Opportunity
Growing Healthcare Costs Drive Opportunity National healthcare expenditures (2009–2019) 11 Source: Centers for Medicare & Medicaid Services, Office of the Actuary
Slide 12: Healthcare Reform – A Changing Landscape
Healthcare Reform – A Changing Landscape Increasing Access Containing Costs Improving Quality • 15+ million new • Integrated delivery • Electronic Health Records consumers will access systems will offer similar (EHR), connected by Health Medicaid and Medicaid- services as health Information Exchange
Slide 13: Attractive Healthcare Services Addressable Market
Attractive Healthcare Services Addressable Market Govt H/C Provider Payer $2.9B Market $22B Market $15B Market CAGR CAGR CAGR ‘12 – ‘15 ‘12 – ‘16 ‘12 – ‘16 New Markets1 25% $665M Market Growth Extended/Adjacent Markets2 10-25% $900M Market Growth Provider Payer Healthcare Healthcare 13% Services 9%
Slide 14: Xerox Healthcare Meets the Market Needs
Xerox Healthcare Meets the Market Needs Driver Market Need Xerox Solution Sets • Healthcare BPO Platform Government program Access, Platform Distribution, • HIX Solution expansion Savings • MMIS and Provider IT Platforms Demonstrate value • Evidenced-based healthcare • Healthcare Analytics & Cost ou
Slide 15: $2B+ Healthcare Revenue – How it Breaks Down
$2B+ Healthcare Revenue – How it Breaks Down Provider (incl ITO & Consulting) – 24% • ITO platforms, including Pharma • Consulting Solutions for EMR and Financial Systems, including Buck 24% • HealthCare Analytics for Care and Quality Learning Management Solutions Payer - 36% 40% • Business Process
Slide 16: Healthcare Offerings and Solutions
Healthcare Offerings and Solutions Pharma / Life Providers Payers Sciences Government Employers • Management and • Transaction processing • Analytics • State HIEs • Actuarial Services Technology Consulting • Customer Care • Customer Care • Eligibility/Health • Benefit Consulting • EMR & HIE Integrat
Slide 17: Xerox Health Services Operations
Xerox Health Services Operations United States International • Alabama • Massachusetts • South Carolina • Dominican • Alaska • Michigan • Tennessee Republic • California • Minnesota • Texas • Germany • Colorado • Mississippi • Utah • Ghana • Connecticut • Missouri • Virginia • Guatemala • DC • India
Slide 18: HealthCare Innovation Focus
HealthCare Innovation Focus Health Insurance Communication and HealthCare Analytics Exchanges Engagement Services EMR Extenders and Fraud/Waste Optimization/Adoption Mobility Management and Abuse and Learning Systems 18
Slide 19: Key Takeaways
Key Takeaways • $2B+ business -> with above average growth and returns • Well positioned to benefit from market trends – government, payers and providers • Offerings built on differentiated platforms and broad BPO delivery capabilities • Investing in innovation and focused acquisitions to further en
Slide 20: Our Government Healthcare Business
Our Government Healthcare Business March 7, 2013
Slide 21: Medicaid Spending is Substantial and Growing
Medicaid Spending is Substantial and Growing Projected Medicaid Spend (in billions) $600 $592 $549 Twin pillars of $500 $514 $479 Medicaid growth: $446 $416 $400 $382 - increased $300 $305 $341 eligibility $267 $200 $275 $253 - aging population $100 $- Congressional Budget Office – An Update to the
Slide 22: Xerox Government Healthcare - Did You Know?
Xerox Government Healthcare - Did You Know? Largest Medicaid Providing healthcare administrator by services to 37 states claims volume with and 36 million over 40 years of people government health program experience Managing 13 billion Processing 563 Distributing 54 billion dollars in drug million h
Slide 23: Government Healthcare - State Customers
Government Healthcare - State Customers NV 23
Slide 24: Largest Medicaid Administration Vendor
Largest Medicaid Administration Vendor MMIS Healthcare Eligibility & Pharmacy Benefits Informed Health Long-Term Care Exchange Services Management and HCBS • Market position – #1 • Market Position – #2 • Market position – #1 • Market position – • Market position – Top 20 emerging • Competitors: • Co
Slide 25: The Market and Where We See it Headed
The Market and Where We See it Headed Market Today • MMIS is transaction Platform platform • Multiple eligibility systems • Mothers and children Populations • ABD and LTC in fee- for-service • Fragmented long-term care Processes / • Retrospective Fraud Programs Detection • Reactive to Federal mandat
Slide 26: Long Term Competitive Advantage: Medicaid Platform
Long Term Competitive Advantage Medicaid Platform Highlights • MMIS is a $1.3B market • Key platform to capture significant organic growth • Made a unique, ground up investment in a modern, SOA MMIS, Health Enterprise - NH go live is 4/1 • 4 more states in process 26
Slide 27: Health Enterprise MMIS Platform Supports Our Vision
Health Enterprise MMIS Platform Supports Our Vision Healthcare Solution Set Vision / Strategies Enhancing to Support Vision • Managed care, long-term care, Provide solutions that address Our • Provider credentialing (Rule 6028), program integrity administrative cost pressures • Lean business process
Slide 28: Our Point of View - Medicaid is a Catalyst for Improved Health
Our Point of View - Medicaid is a Catalyst for Improved Health Market Today Market Tomorrow Future State • MMIS is transaction • MMIS supports health care Platform, Platform platform delivery and integrated Populations & • Multiple eligibility systems care models Programs Converge • Health Benefit E
Slide 29: Long Term Competitive Advantage: Health Benefits Exchange Platform
Long Term Competitive Advantage Health Benefits Exchange Platform Outreach Highlights Web Portal • Wins in 4 states CCIIO Verification of IRS • Reform will create online Tax Credits Citizen & Income from Medicaid / CHIP insurance marketplace by Social Security and Eligibility Eligibility Rules 1/201
Slide 30: PPACA Key Dates
PPACA Key Dates 10/1/14 ICD-10 Mandatory Implementation 1/1/13 11/5/2015 Health Plan Identifier Compliance 1/1/14 Required for small plans enforcement of Modified Adjusted CORE Phase I Gross Income for 1/1/16 Operating Rules Medicaid and HIX 11/5/2014 More CORE Eligibility Health Plan Identifier ope
Slide 31: Long-term View: Transformation and Sustainability
Long-term View: Transformation and Sustainability • Medicaid Expansion Dual Eligible • Eligibility Captures Transformation • Federal Mandates • Bundled Payment and Value-Based Purchasing • Greater Fraud, Waste & Long Term Care Abuse Measures • Service Planning, Assessment & Outcome Reporting 31
Slide 32: Long-term View: Transformation and Sustainability
Long-term View: Transformation and Sustainability Medicaid is the primary payer for Growth in Medicaid Long-Term Care long-term care services Services Expenditures In Billions Other Public, $122 $123 Other Private 2% $115 Private, 5% $109 Insurance, $100 7% $92 42% 45% 37% 41% $75 32% 30% $54 20% Me
Slide 33: Shift in LTC is Opportunity: Fragmented Services to Managed Delivery
Shift in LTC is Opportunity: Fragmented Services to Managed Delivery Of dual 9.1 Million current dual eligibles 70% Of Medicaid spend for duals is for 11% spend is in managed LTC services care State 26 applications for dual eligible demonstration 60% Of total dual spend is on sickest 10 39% Of total
Slide 34: High Tech. High Touch. High Return
High Tech. High Touch. High Return Transforming Human Services in Indiana Achieving results in Indiana Family all areas – savings, and Social efficiencies, Services Administration accuracy, and (FSSA) citizen service improvements The Challenge The Solution The Results • Reduce error rates A comprehe
Slide 35: Our Differentiators and Innovations
Our Differentiators and Innovations Health Enterprise Platform – MITA 3.0 Innovative end-to-end Solutions • Service-Oriented Architecture • Pharmacy • Ground-up investment specific to • Eligibility Services requirements of Medicaid • Utilization/Population Health Management • Provides platform to ma
Slide 36: Key Takeaways
Key Takeaways • Strong growth with improving margins driven by our market innovation, extensive footprint and comprehensive solutions • Market leadership as #1 MMIS and #1 PBM in Medicaid space • Well-positioned for Health Care Reform opportunities • Unique MMIS platform will drive innovation and se
Slide 37: Our Payer Business
Our Payer Business March 7, 2013
Slide 38: Xerox Healthcare Payer - Did You Know?
Xerox Healthcare Payer - Did You Know? Over 100 Payer 20 of the top 20 US organizations commercial health supported plans are clients – including all top 12 BCBS organizations ~2.1 billion annual 8 million daily $750 million in payer-related transactions claims recovered communications / processed a
Slide 39: Health Plan Market Trends
Health Plan Market Trends Trends driven by the Affordable Care Act • Payers shifting from B2B to B2C business model • HIXs will drive unprecedented growth opportunity • New entities creating market competition • Increased cost pressure • New models of care 39
Slide 40: Addressable Healthcare Payer BPO Market
Addressable Healthcare Payer BPO Market* $925B payer revenue $785B (85% $140B (15% administrative cost of care) services & profit) $56B profit (~6% of total $84B administrative expenses revenue) (~9%of total revenue) $59B keep in-house $25B potential outsourcing (~70% of admin revenue (~30% of admin
Slide 41: Our Value to Commercial Health Plans
Our Value to Commercial Health Plans Improve profitability and efficiency, helping payers meet the Medical Loss Ratio mandate Services that help payers take advantage of healthcare reform’s newest opportunities Innovations that create operational efficiencies and improve outcomes Scalable solutions
Slide 42: Payer Services
Payer Services Services provided are technology platform independent Strategic Planning and Analysis Product Development Financial Reporting Budgeting and Forecasting Actuarial Complexity of Interaction Provider/Network Management – Difficulty of Work or Sales & Marketing Control Concern Decision Su
Slide 43: Payer Solutions - Primary Services
Payer Solutions - Primary Services Transaction Communication Recovery Processing Customer Care & Marketing Services Services End-to-end Inbound/outbound Improve the way payers Data driven pre- and administrative services solutions for members communicate with post-cost containment and providers memb
Slide 44: Payer Solutions – Healthcare Reform Related
Payer Solutions – Healthcare Reform Related Payer Health Insurance Third Party Administrator Exchanges (HIX) Services (TPA) Comprehensive HIX offering: Services for health plans and Co-ops • End-to-end, technology driven • End-to-end, BPO delivery model • Enables health plans to grow membership and
Slide 45: Payer Solutions – Differentiators
Payer Solutions – Differentiators Transactional Customer Care Communication & Cost Recovery & Marketing Services Avoidance Strategic business unit (SBU) Achievement based compensation (ABC) Outcome-based deal structures Asset acquisition Lean six sigma & continuous improvement processes Crowdsourcin
Slide 46: Competitive Landscape
Competitive Landscape Service Offering Provider Data Dimension Firstsource SourceHOV Mailroom / Transactional IBM HP Accenture Genpact Claims Processing Cognizant Infosys Sitel Convergys West Corp. APAC Customer Care Teleperformance TeleTech IBM HP Accenture Ingenix HMS Cost Avoidance and Recovery R
Slide 47: Our Innovation
Our Innovation Multi-Channel Communication CallSimplicity The right message, for the right Intuitive interface simplifies standard reason, at the right time, through the processes agents perform right channel Crowdsourcing Other Innovation Solutions Using our vast global workforce to • LiveKey perfo
Slide 48: Key Takeaways
Key Takeaways • Expect continued double-digit growth in revenue and profit • Execution has been and will continue to be the foundation of our growth and success • With our broad and flexible business model, we are well positioned to capitalize on the opportunities that healthcare reform is providing
Slide 49: Our Provider Business
Our Provider Business March 7, 2013
Slide 50: Xerox Provider Services – Did You Know?
Xerox Provider Services – Did You Know? Serving over 70 percent 1700 hospitals with improvement in the over 25 years of adoption of new healthcare provider technology support Committed Innovative 100% of clients The largest and Gartner Magic indicate they would buy highest rated* Care Quadrant Leade
Slide 51: Our Point of View – Waves of Change Affecting Our Clients
Our Point of View – Waves of Change Affecting Our Clients, Informing Our Services Trend Future • Risk shifting to providers • Bundled payments paid per • Reimbursement on quality and patient annually, based on patient satisfaction efficient outcome delivery Financial • Managing direct cost of care •
Slide 52: Xerox Provider Capabilities and Value
Xerox Provider Capabilities and Value Platform & Optimize & Navigate Inform & Reduce Costs Engage &Integrate Act Technology Expertise & Tools, technology & Data analytics to Solution platforms and technology for expertise to integrate provide information infrastructure to workflow data across multip
Slide 53: Platform & Reduce Cost
Platform & Reduce Cost • Design and deliver stable, redundant and secure IT solutions that minimize operational disruption • Create and consolidate platforms for interoperability and cost effectiveness • Enable operational excellence on consumption-based business and technology platforms Infrastruct
Slide 54: Optimize & Engage
Optimize & Engage • The Breakaway Method, a researched-based methodology to dramatically increase adoption of IT applications • Optimization & improvement of workflow across IT platforms • Use of our clinical data to Lead transformation initiatives & address new care models • Real-time simulation tr
Slide 55: Optimize & Engage
Optimize & Engage End-user Adoption Dashboard 55
Slide 56: Navigate & Integrate
Navigate & Integrate • Expertise to bridge core HIT solutions and processes with clinical strategies • Provide scalable solutions to deliver care across multiple sites and entities • Deploy tools and technologies that integrate financial and clinical data • Enable dramatic improvements in clinical d
Slide 57: Inform & Act
Inform & Act • Through data analytics deliver information that enables strategic decision making around risk and outcomes • Reduce uninsured patient costs and risks, avoidable days, length of stay and increase revenue • Provide real-time clinical surveillance to measurably improve care CMS – Integra
Slide 58: Inform & Act
Inform & Act Population Management • Population risk factor • Clinical and infection surveillance • Case management Provider Organizational Management Performance • Peer review • Regulatory reporting • Provider profiling • Quality management • Credentialing • Financial management • Reappointment • B
Slide 59: Our Differentiators and Innovations
Our Differentiators and Innovations Breadth of portfolio Strong platforms and technology • Consulting • Xerox MidasLive and MidasPlus • Managed services • PromisePoint® • Training and adoption • EHR hosting and integration • Analytics • Cloud computing • Enterprise content management Dedicated healt
Slide 60: Key Takeaways
Key Takeaways • Consistent double digit growth with high margins driven by portfolio of IP, consulting and IT • The EHR domain knowledge and tools to assist the hospital market in extracting value with their HIT investment • A trusted provider of ITO services which helps provide the capital and savi
Slide 61: XefOx @,)
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