Encompass Health Corporation · NYSE:EHC
Encompass Health — William Blair 39th Annual Growth Stock Conference (June 2019)
19 slides from Encompass Health's conference presentation, Jun 5, 2019
Slide 1: William Blair 39th Annual Growth Stock Conference
William Blair 39th Annual Growth Stock Conference Mark Tarr, President and Chief Executive Officer June 5, 2019
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
Company overview Encompass Health 3
Slide 4: Company overview - Inpatient Rehabilitation
Company overview - Inpatient Rehabilitation Encompass Health 4
Slide 5: Company overview - Home Health and Hospice
Company overview - Home Health and Hospice Encompass Health 5
Slide 6: Market Overlap: Inpatient Rehabilitation and Home Health
Market Overlap Inpatient Rehabilitation and Home Health 81 of EHC's IRFs have an EHC home health location within the service area. Encompass Health 6
Slide 7: Quality
Quality Inpatient Home Health Rehabilitation Discharge to 30-day hospital community readmission 300 bps better 79.3% 17.2% 140 bps 76.3% better 15.8% Industry Average Encompass Health Industry Average Encompass Health 295 certified clinical programs Developed programs to create including 113 hospita
Slide 8: Cost Effectiveness
Cost Effectiveness Inpatient Average Average Average Rehabilitation Average Medicare Case Cost Payment Beds Discharges Mix per per per IRF per IRF Index Discharge Discharge Encompass Health 67 951 1.28 $13,622 $20,315 Industry Average 34 358 1.25 $18,388 $21,159 (25.9)% lower Average Average Average
Slide 9: 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 10: Multi-faceted Growth Strategy
Multi-faceted Growth Strategy Track record of consistent market share gains driven by clinical programs 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-location growth p
Slide 11: 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... 2019 2020 De Novo: 1) Murrieta, CA 50 — 2) Katy, TX 40 — 3) Sioux Falls, SD — 40 4) Coralville, IA — 40 5) Lubbock, TX (joint venture) 40 — 6) Boise, ID (joint venture) 40 — Bed Additions ~150 ~100 ~320 ~
Slide 12: Home Health and Hospice Growth
Home Health and Hospice Growth Camellia Home Health 14 Hospice 18 Other Acquisitions & Other Acquisitions & New Locations Opened New Locations Opened Home Health 10 Home Health 9 Hospice 8 Hospice 4 2015 2016 2017 2018 2019 CareSouth Other Acquisitions & Alacare Home Health 44 New Locations Opened H
Slide 13: Operational initiatives support our growth strategy
Operational initiatives support our growth strategy Increase clinical collaboration Build stroke market share Further develop post-acute solutions Encompass Health 13
Slide 14: Clinical collaboration in overlap markets
Clinical collaboration in overlap markets Improving the patient experience and outcomes while reducing total costs through integrated care delivery Encompass Health IRF discharges to: 33.5% 36.0% Collaboration rate Collaboration rate EHC Home Health Non-EHC Home Health 5,409 5,830 250 Basis points y
Slide 15: Building stroke market share
Building stroke market share Leveraging our: • strategic sponsorship with the AHA/ASA • clinical collaboration • joint commission certifications ~800,000 strokes ~142,000 113 EHC IRFs per year deaths from stroke hold stroke-specific in the U.S. certifications. ~32,000 Continue to increase market str
Slide 16: Post-acute solutions
Post-acute solutions Our post-acute solutions will leverage our clinical expertise, large post-acute datasets, EMR technologies, and strategic partnerships to drive improved patient outcomes and lower cost of care across the entire post-acute episode. 2018 2019 Modified and implemented Cerner’s
Slide 17: Free cash flow priorities
Free cash flow priorities (In Millions) 2018 2019 Actuals Assumptions Growth in core business IRF bed expansions $22.3 $40 to $50 New IRFs - De novos 76.4 85 to 115 - Acquisitions - opportunistic - Replacement IRFs and other 24.5 90 to 110 Home health and hospice acquisitions - Alacare Home Health a
Slide 18: 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 18
Slide 19: Committed to delivering high-quality, cost-effective integrated care
Committed to delivering high-quality, cost-effective integrated care across the healthcare continuum
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