What is vision Aristotle - vision is knowing what is where by looking.
20/20 Vision: Looking Back on the Last 20 Years, and ...
Transcript of 20/20 Vision: Looking Back on the Last 20 Years, and ...
"20/20 Vision: Looking Back on the Last 20 Years, and Looking Forward to 2020 and Beyond"
Citi Not-for-Profit Health Care Investor Conference 2019
May 23, 2019
Michael J. DowlingPresident and CEO
Mark J. SolazzoExecutive Vice President, COO
Michele L. CusackSenior Vice President, CFO
Disclaimer
The following presentation contains information which is forward-looking within the meaning of federal securities law. These forward‐looking statements are based on the current plans and expectations of Northwell management.
The achievement of certain results or other expectations contained in such forward-looking statements involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Northwell expressly disclaims any obligation or undertaking to issue any updates or revisions to those forward-looking statements if or when their expectations change, or events, conditions or circumstances on which such statements are based occur.
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The Northwell Perspective
• A proud history of achievement; innovation and growth.
− Consistency of strategy and purpose
− Stability of performance
• A recognition of how much has changed.
− Role of the hospital
− Creation of a distributed network
− New programs; new business
• A progressive culture.
− Collaborative and team-based
− Optimistic, integrated and adaptive
• An understanding of the responsibility and obligation of leadership.
− An agent of continuous change and practical disruption
− Responsibility to the community at large
• A commitment to the promotion and advancement of overall health.
− More than the delivery of excellent medical care
− Long-term view; multi-year perspective
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1907
Establishes first Physical Therapy Department in the United States
Northwell: A History of Firsts
1938
Performs first angio-cardiography in the United States
1967
Opens first cardiac catheterization unit in New YorkMetro area
1993
Opens the Center for Emergency Medical Services — the largest hospital-based emergency services operation in the East
2002
Launches the health care industry’s largest “corporate university” — the Center for Learning and Innovation (CLI) and the Patient Safety Institute (PSI), featuring the region’s first simulation lab —one of the largest in the United States
2011
Welcomes inaugural class of 40 students to NewYork State’s first new allopathic medical school in 40 years
2018
Named one of Time magazine’s top innovators for its development of “The Fin,” an amphibious prosthetic leg
2015
Teams with Yale-New Haven Health to launch SkyHealth, the region’s first hospital-based helicopter emergency medical service
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Culture dedicated to innovative learning and training
Center for Learning and Innovation
Graduate School of Nursing & Physician’s Assistants
Zucker School of Medicine
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NORTHWELL HEALTH’S COMMITMENT TO VETERANS
To celebrate Northwell’s dedication and leadership position in serving the needs of Veterans, Northwell Health is collaborating with the United States Navy and is
creating a music based event closing the annual New York Fleet Week on May 25th at Rockefeller Center and Radio City Music Hall.
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Mission Centric and Focus on the CoreNorthwell Health continues to enhance the product through improvements across its domains
Mission
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Maintaining the Focus: Quality & Safety
• AHA Quest for Quality Prize was awarded in 2018-Northwell is the first and only health system in the country to receive this award
• HANYS Pinnacle Award for Quality and Patient Safety awarded in 2018
• Based on the most recent STS report, Northwell Health cardiac surgery programs at Lenox Hill Hospital, Southside Hospital and North Shore University Hospital received Three-Star ratings (highest quality rating given) in several categories
• Northwell Health performs more robotic procedures than any other health care provider on the East Coast, with more than 17 da Vinci robotic surgery systems in use.
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77.1
7978.6
77.7
78.5
79.179.4
79.679.8
79.5 79.679.4
78.7
79.5 79.6 79.7
80.7 80.7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017 2018 2019
77.7
79.6
78.5 78.6
77.8
79.178.8
79.3
79.9
78.9
79.879.5 79.3
80.4
79.8 79.9
80.7
81.4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017 2018 2019
Maintaining the Focus: Patient Experience
Top Box % Linear Trend
Inpatient: HCAHPS ‘Communication with Doctors’ – Top Box %
Inpatient: HCAHPS ‘Communication with Nurses’ – Top Box %
Inpatient: ‘Quality of Food’ – Top Box %
Inpatient: HCAHPS ‘Recommend the Hospital’ – Top Box %
70.8
72.572.8
72.3
71.5
72.272.4
73.4
72.4 72.3 72.372.1
71.1
73.1
72.4 72.472.6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018 2019
30.831.0 30.9
29.9
31.131.7
28.1
29.5
31.3 31.630.9
31.832.7
34.433.9
35.2
36.4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018 2019
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Cumulative Beds Created Through EfficiencyEnhanced Effectiveness: Operating Efficiency
53
120
227 280
339
402 436
469 506
571 612
660 700
740
-
100
200
300
400
500
600
700
800
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Projected
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Achieving the Quadruple Aim through “What If…”A focus on improving team member well-being will drive the triple aim of achieving an improved patient experience, a better quality of care and a reduction in cost
•Enhancing the quality of care
including a greater focus on individuals
and families
• Reducing unnecessary costwhile maintaining a high level of care
• Making patients the priority and
developing a better patient
experience
• Improve Clinician well-being and staff engagement to prevent burnout
Provider Patient
QualityCost
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$
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Budget
Rev
enu
e (D
olla
rs in
Mill
ion
s)
Total Operating Revenue
$9.3B
$10.0B
$11.5B
$12.1B
$8.5B
$7.4B$7.0B
$6.6B
41%
42%
$1.7B
$2.5B$2.6B
$2.8B $2.9B$3.1B
$3.4B$3.6B
$3.8B$3.9B $4.2B
$4.4B
$4.8B
$5.5B
$6.2B
Note: Excludes Health Insurance companies
Total Operating Revenue
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Hospitals & Post Acute Services
Ambulatory Surgery Centers…………………………………………
Urgent Care Centers…………………………………………………..
Ambulatory Practices…………………………………………....
Employed Physicians………………………………………..
Voluntary Premium IPA………………………………..
Credentialed Voluntary Physicians………….. 13,600
2,446
4,226
636
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15
2018 Ambulatory Referral Funnel
The referral funnel has caused many of our Hospitals to be at or above full capacity
702 Ambulatory
Locations
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Absorbing the Growth from Continued Expansion has Resulted in Increased Market Share & Increased Acute Care Occupancy
Note: LIJ added 50 beds in 2017, Southside added 9 beds in 2018
106%(max)
118%(max)
127%(max)
117%(max)
90%(avg)
105%(avg) 99%
(avg)97%(avg)88%
(avg)
105%(avg)
103%(avg) 97%
(avg)91%(avg)
104%(avg) 100%
(avg)96%(avg)
0%
20%
40%
60%
80%
100%
120%
140%
LIJ NSUH Southside SIUH
2016 2017 2018
106%
118%
127%
117%
90%(avg)
105%(avg) 99%
(avg)97%(avg)88%
(avg)
105%(avg)
103%(avg) 97%
(avg)91%(avg)
104%(avg) 100%
(avg)96%(avg)
0%
20%
40%
60%
80%
100%
120%
140%
LIJ NSUH Southside SIUH
2016 2017 2018
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Patient Centric View Building the Continuum of Care Around the Patient
The Digital Patient Experience
Telehealth
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Telehealth Services enable the highest quality of specialist care in both inpatient and outpatient settings
Northwell HealthTelehealth
An interdisciplinary team from across the enterprise
Interconnecting our systems to provide a digitally-powered, patient-centric experience
eICU
Telestroke
eSNF
eHospitalist
Pediatric Critical Care Consultation
Neuro Critical Care Consultation
Trauma Consultation
Telepsychiatry
Pediatric ED
Telehealth Center
Continuing Shift to Ambulatory Settings
1997 20192005
Note: Excludes Health Insurance companies
51%49%
70%
30%
Inpatient Revenue
Outpatient & Other Operating Revenue
73%
27%
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Ambulatory Surgery DialysisUrgent Care Anesthesia
Oyster Bay Floral Park Home TrainingHuntington on Broadway
Port Washington Julia & Israel Waldbaum (NSUH)
Crossways Park Long Island City Anchor Home
Smithtown Selden
East Islip
•13 Surgery Centers•3 Radiation Medicine sites•62,000 surgical procedures
annually
•51 Urgent Care Centers•Family & Pediatrics specialty centers
•550,000 visits annually•1+ Million patients seen
since inception
•11 centers operational & in-development
•20 centers expected by 2020•150,000 treatments annually
•Serving 30 Locations•130 providers performing over
120,000 surgical procedures annually
Clinical Joint VenturesLeveraging investments & partnership expertise to enter new markets & expand clinical capabilities
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Size and scale provides opportunity to create shared services, robust shared services provides opportunity to sell services
Business and Service Capabilities
• Revenue cycle• Financial Analytics• Accounts payable• Credentialing• Procurement (GPO)• Supply Chain• Human resources• Education and training• Patient scheduling• Insurance verification• HR Service Center• Information Services
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Continue to DiversifyPartnering in novel technologies and business models that improve patient care and advance Northwell’s growth
Diversification of Services
Joint Ventures
Provider Groups
Investments
Academics Technology
Health Systems
Research
Digital
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$
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Budget
Rev
enu
e (D
olla
rs in
Mill
ion
s)
Total Operating Revenue
$9.3B
$10.0B
$11.5B
$12.1B
$8.5B
$7.4B$7.0B
$6.6B
41%
42%
$1.7B
$2.5B$2.6B
$2.8B $2.9B$3.1B
$3.4B$3.6B
$3.8B$3.9B $4.2B
$4.4B
$4.8B
$5.5B
$6.2B
Note: Excludes Health Insurance companies
Total Operating Revenue
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27.7% 27.9%28.2% 28.3%
28.7%
29.4% 29.5%29.9%
25.0%
26.0%
27.0%
28.0%
29.0%
30.0%
31.0%
32.0%
33.0%
-
200,000
400,000
600,000
800,000
1,000,000
2011 2012 2013 2014 2015 2016 2017 2018 *
Mar
ket
Shar
e %
Nu
mb
er
of
Dis
char
ges
Primary Service Area
Northwell Health Total Market Northwell Market Share
Growing Share of Competitive Marketplace
Source: PARCSver2019.01ad/ja. *2018 annualized on 9 months. SIUH data based on internal dataMarket includes Staten Island, Manhattan, Queens, Nassau, Suffolk and Westchester countiesIncludes all Current Northwell Hospitals in all years
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Vertical Integration Yields Significant Diversification of Revenue Streams
494297.4
72249
Inpatient Revenue51%
Outpatient Revenue27%
Physician Revenue16%
Clinical JVs & Other
Revenue6%
Budget 2019
Inpatient Revenue63%
Outpatient Revenue23%
Physician Revenue9%
Other Revenue
5%
2010
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$(253)
$(315) $(357)
$(392)
$(477)
-$600
-$500
-$400
-$300
-$200
-$100
$0
2015 2016 2017 2018 2019 Budget
Bo
tto
m L
ine
Imp
act
(Mill
ion
s)
ACA Impacts Medicare Medicaid Commercial
Bottom Line Pressures: Annual Financial Impacts
Five year cumulative financial impacts related to commercial payer behavior, government cuts, and ACA total $1.8 billion
(Dollars in millions)
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6.9% 6.7%
5.0%
6.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2015 2016 2017 2018
EBIDA Margin
94% 91% 87% 91%
0%
20%
40%
60%
80%
100%
2015 2016 2017 2018
Cash to Debt
3.6 3.4
2.6
3.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015 2016 2017 2018
Debt Service Coverage Ratio
45% 47% 49% 48%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
2015 2016 2017 2018
Debt to Capitalization
Key Financial Ratios
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Steady Liquidity Despite Significant Capital & Strategic Investments
137%145% 150%
180% 174%161%
113 105 105 105 102 103
-
20
40
60
80
100
120
0%
50%
100%
150%
200%
250%
2014 2015 2016 2017 2018 2019 Budget
Capex / Depreciation Days Cash on Hand
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$0.2B $0.2B $0.2B $0.3B $0.3B
$0.4B$0.5B
$0.6B$0.7B
$0.7B$0.8B $0.8B
$1.1B
$1.5B
$1.6B
$1.8B
$2.0B
$2.2B
$2.4B
$2.7B
$3.0B$3.1B
$3.2B
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Budget
Cas
h &
Inve
stm
en
ts (
Do
llars
in B
illio
ns)
Growth in Cash & Investments
Total Unrestricted Cash and Investments
Northwell has added $3B in cash and investments to the balance sheet aligned with the System growth and fiscal discipline
A 42
Cash
6%
Fixed Income
42%Equities 34%
Hedge Fundsof Funds
13%
Risk-
parity5%
Fixed Rate Debt, 94%
Variable RateDebt
6%
2018 General Funds Debt Structure
Investment Portfolio and Debt Structure
Notes: Investment Allocation and Debt structure at 12/31/18.Assets exclude some smaller pools as well as Phelps, Peconic, Mather, LI Home and CareConnect Insurance Company.General Funds exclude cash held outside of the investment portfolio to fund operations.Risk Parity uses a variety of liquid global stocks, global bonds, currencies and commodities to balance the risks of different growth and inflation environmentsRisk Parity was exited at 12/31/18 with proceeds allocated to equity and fixed income in January 2019. 43
Stable Operating Performance & Growth in Net Assets
Stable operating results and growth of the organization have contributed to the overall increase in the net worth of the System
$0.6B
$2.8B
$3.2B
$3.6B
$4.0B$4.0B
$4.6B
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
1997 2014 2015 2016 2017 2018 2019 Budget
Op
erat
ing
Mar
gin
Per
cen
tage
Tota
l Net
Ass
ets
(Do
llars
in B
illio
ns)
Net Assets Operating Margin
||||||||||||||||||
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At Northwell Health We Are…
Committed to navigating headwinds and environmental conditions
Focused on enhancing the core operations
Striving to maintain our market competitive advantage
Investing in innovation, excellence, and diversifying our revenue streams
Consistent in our strategic approach, with tactical agility
Dedicated to preserving the organization's foundation and looking to a strong future
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