Epic Quality, Epic ServiceEpic Care - · PDF fileHeadquarters PDN & Home Therapy in Texas...

Epic Quality, Epic Service…Epic Care

2 Epic Quality, Epic Service…Epic Care

Epic Health Services Highlights

► Leading national provider of pediatric home health and therapy services to

medically frail and chronically ill children • Epic is the largest provider of pediatric private duty nursing and therapy in Texas

• # 2 pediatric home care provider nationally

► Pediatrics is an attractive segment of home health care • Large and growing market

• Less susceptible to rate cuts margins are stable

• Fragmented — lacks scale, professionalization less competitive

• Similar characteristics in Epic’s adult niches

► Experienced management team with demonstrated ability to execute

multi-faceted growth plan • Grew EBITDA from $6.5M in 2010 to ~$37M RR end of 2013

• Organic Compound Annual Growth Rate of 45%+ for 3 years

• Successfully acquired and integrated 10 agencies in multiple states

► Strong, replicable operating model — scalable • Key is Balance Clinical excellence + high growth culture

1. Be the #1 pediatric home

health provider nationally

2. Be a leader in pediatric

behavioral health

3. Grow EBITDA in 5 years

from $37M+ to ~ $90M

Epic’s Goals


Type of

Care

Epic: Leading Provider of Home Health Services

► Administer Medication

► Provide Enteral

Nutrition

► Monitor and Maintain

Ventilators

► Physical Therapy

► Occupational Therapy

► Speech Therapy

► Assistance with ADLs

► Nutrition/Medication

Care

► Case Management

► Private Duty Nursing

► Behavioral Home

Health

► Rehabilitation Services

► Cerebral Palsy

► Spina Bifida

► Ventilator Dependent

► Tracheostomies

► Feeding/Swallowing

Disorders

► Bone/Joint Disorders

► Eye-Hand

Coordination

Impairment

► Toileting

► Transportation

► Meal preparation

► Medication reminders

► Developmental Disabilities

► Schizophrenia

► Mental Retardation

► Bipolar Disorders

► Depression

► Anxiety Disorders

► Delaware

► Massachusetts

► New Jersey

► Pennsylvania

► Texas

► Massachusetts

► Texas

► Delaware

► Massachusetts

► New Jersey

► Pennsylvania

► Texas

► Massachusetts

► New Jersey

► Texas

Pediatric

PDN 72% of

Revenue

1,800 Clients

Pediatric

Therapy 17% of

Revenue

4,000 Clients

Adult/

Geriatric 8% of

Revenue

900 Clients

Behavioral

Health

2% of

Revenue

700 Clients

Typical

Condi-

tions

States

Served

Note: 1% of revenue considered “other”


Epic Health Services Highlights

Epic Health Services Centers

Epic was founded in Texas

in 2001 and provides a

comprehensive line of in-home

pediatric services in the state

In the last three years, Epic

has developed a significant

presence in the Northeast

through both organic growth

and acquisitions

Headquarters PDN & Home Therapy in Texas Therapy Clinics in Texas

PDN Adult/Geriatric Behavioral Health

Locations


Pediatric is Growing Faster Than Home Health Overall

Pediatric Home Health Is an

Extremely Valuable Market

► Overall spending for U.S. pediatric

home health services grew from $3.2B

in 2006 to approximately $6.9B in

2014E, representing a CAGR of 10%,

which is more than double the overall

U.S. home health market

► Pediatric clients have multiple disorders

and tend to require a higher acuity of

care due to their age and the severity of

their medical conditions

► Clients have a relatively long length of

treatment ~2.5 years for PDN, ~6

months for therapy

Source: National Survey of Children with Special Health Care Needs, The National Association for Home Care & Hospice and IBISWorld

0

20

40

60

$80B

2006

$52.1B

2014

$74.5B

PediatricHomeHealth

AdultHomeHealth

Pediatric Home Health Is Growing at More

than 2X the Rate of Adult Home Health


…Supported By Strong Preferences

and Advancements in Technology

Pediatric Home Health’s Relative

Value to Traditional Care…

Compelling Value Proposition

0

1,000

2,000

3,000

$4,000

AverageDaily Cost

perHigh-Acuity

Client

$3,500

AverageDaily Cost

perLow-Acuity

Client

$2,250

$1,000

$750

NICU/ PICU

Home Health

► Family preference for home treatment

over institutional care

► Eliminates stress and anxiety of

separating a sick child from family

► Provides family with in-home support

► Home care minimizes cross infection

and eliminates privacy and safety

concerns

► Advancements in medical technology

has narrowed the gap between

inpatient and home care

Source: Kuster & Merkle 2004 Care giving Stress, Immune Function and Health: Implications for Research with Parents of Medically Fragile Children; Maxwell 1994 Users’ Views on Hospital and Home care for

Acute Illness in Childhood


Medicaid Payor Base Enjoys Steady Reimbursement

2009 2010 2011 2012 2013

RN $45.12 $44.68 $44.20 $44.20 $44.20

Percent

Change n/a (1.0%) (1.1%) 0.0% 0.0%

LVN $33.00 $32.68 $32.36 $32.36 $32.36

Percent

Change n/a (1.0%) (1.0%) 0.0% 0.0%

Therapy $140.00 $140.00 $138.60 $137.20 $135.14

Percent

Change n/a (0.0%) (1.0%) (1.0%) (1.5%)

0

20

40

60

80

100%

Payor Mix

Medicaid MCOs 19%

Medicaid 65%

Private Pay 7%

Commercial Insurance 9%

Stable Texas Medicaid

Reimbursement Payor Mix

Pediatric home care enjoys stable reimbursement

► Low costs relative to facility based care

► Unique requirements of chronically ill children

► Recognized benefits of the service

► Broad public support for children’s healthcare programs

► Children are a politically and socially protected class


Business Strategy

Sales staff focus on building

and expanding relationships

with physicians, case

managers, and hospital staff

Targeted, systemized

sales effort to access to

and build relationships with

attractive referrers

► Identifies all potential

referrers, qualify, work

accordingly

► Regularly participates in

local support groups, which

provides an opportunity for

additional client referrals

Consistent and personalized care 24 hours a day, seven days a week

Highly trained, experienced staff

► Disciplined recruiting model — strive to be employer of choice

► Specialized training is a key differentiating factor — recognized and highly regarded

► Robust QAPI and Compliance programs

“Whatever it takes” attitude

toward client service

► Client Service Coordinators

(CSCs) are available 24/7

for families and Epic field

staff

► Helps to reduce stress

under which clients and

families typically function

Strive for consistent

staffing for each client

► An assigned CSC

coordinates all needs a

family may have regarding

services


Extraordinary Service


Highly Skilled Employees

0

20

40

60

80

100%

Employee Mix

Branch Offices 13%

SLPs 5%

CHHs 13%

RNs 20%

LVNs/ LPNs 42%

Corporate 2%

PTs 2%

OTs 3%

Summary of Employees Employee Breakdown

(as of 12/31/13)

► Epic employs over 4,800 FTEs, the

majority of whom are pediatric

home health nurses

► In addition to its highly skilled RNs

and LVNs/LPNs, the Company

employs CHHAs, PTs, OTs, SLPs,

case managers, and rehabilitation

professionals

► Because of the specialized nature

of pediatric care, many nurses

have experience working in either a

neonatal intensive care unit

(“NICU”) or pediatric intensive care

unit (“PICU”)


Strong and Consistent Organic and Acquisition Growth

Revenue Bridge

($M)

0

50

100

150

200

250

300

$350M

$43.4

20

10

Acqu

isitio

ns

$0

.7

2010

Org

anic

$2

2.1

2010

Reve

nue

$6

6.2

2010

Acqu

isitio

ns

$18.8

2011

Acqu

isitio

ns

$1.2

2011

Org

anic

$30.8

2011

Reve

nue

$117

.0

2011

Acqu

isitio

ns

$1.2

2012

Acqu

isitio

ns

$31

.0

2012

Org

anic

$50

.7

2012

Reve

nue

$19

9.9

2012

Acq

uis

tions

$47

.2

2013

Org

anic

$49

.0

2013

Reve

nue

$29

6.1

200

9B

ase

Busin

ess

Reve

nue

CAGR

62%

51%

Organic

47%

Organic

43%

Organic

27%

Organic


Behavioral Health Services

Adult Behavioral Home Health

► Mental Health Parity and Addiction Act of 2008, the Affordable Care Act, Newtown make

for more coverage of mental health services

► Total expenditures on mental health treatment in the U.S. — $135B of which $2.2B is

home care

► 1 in 17 adults lives with a serious mental health illness (schizophrenia, serious depression, bipolar)

► Cost per day: Home based MH nursing ~ $100 County jail ~ $150 In-patient facility ~ $2,200

Autism

► Growing number of states are mandating insurance coverage for autism spectrum disorder

(ASD) Total expenditures for children with autism — $35B

► 1 in 68 children in the US (1 in 45 in NJ) is somewhere on the autism spectrum — increased 600%

since 1980

► Primary service modality —– Applied Behavioral Analysis followed by treatment provided primarily in

the home

► Treatment needs fit well with Epic’s operational and clinical capabilities

► Launched first Epic autism programs in NJ and TX in January 2014

► Experienced program developer/manager on board

► Epic is in the market for behavioral health acquisitions

► Ideally geographies complementary to current operations

► Home care oriented


In Lauren’s Words...

A Picture Says it All…

“Epic Health Services sets the standard for homecare nursing. I've had

nursing in my home for 26 years. During that time, I have had the

challenge of working with at least 6 agencies. I can say with

certainty, however, that Epic is superior to them all.”

Epic Quality, Epic ServiceEpic Care - · PDF fileHeadquarters PDN & Home Therapy in Texas...

Documents

Transcript of Epic Quality, Epic ServiceEpic Care - · PDF fileHeadquarters PDN & Home Therapy in Texas...