Jack BovenderChairman and CEO Vic CampbellSenior Vice President
-
Upload
lacy-reynolds -
Category
Documents
-
view
38 -
download
1
description
Transcript of Jack BovenderChairman and CEO Vic CampbellSenior Vice President
1
Jack Bovender Chairman and CEO
Vic Campbell Senior Vice President
Mark Kimbrough Vice President, Investor Relations
2
Cautionary Note Regarding Forward-looking Statements
HCA’s management will be making some forward-looking statements during today’s presentation. Those forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that may cause those forward looking statements to be materially incorrect.
Certain of those risks and uncertainties are discussed in HCA’s filings with the Securities and Exchange Commission, including the company’s report on Form 10-K and its quarterly reports on form 10-Q, to which you are referred. Management cautions
you not to rely on, and makes no promises to update any of the forward looking statements.
3
Collective Knowledge
• 190,000 employees
• 190 hospitals
• 92 surgery centers
• 14 million patients treated annually
• 5.2 million emergency room visits annually
4
What Will Drive HCA’s Future Success
• Aging Population and Improving Economy
• Located in Large, Growth Markets• Capital Investments
• Enhanced Outpatient Strategy
• Quality and Patient Safety Initiatives
• Prudent use of Company’s Strong Cash Flows
• Bad Debt Trends Improving/ Encouraging
• Stable Pricing Environment
5
Socio-Demographics—Age WaveDriving Healthcare Utilization
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
95
100
105
110
115
120
125
Acu
te C
are
Util
izat
ion
Inde
x(2
003=
100)
Baby Boomer Impact Accelerates
1.58% CAGR 2003-2012
121
119
117
115113
112110
108106
105103
102100
9897
96
1.7%1.6%
1.6%1.6%
1.5%1.6%
1.6%1.6%
1.6%1.6%
1.6%1.5%
1.6%1.5%
1.4%
1.56%3-Year CAGR
1.59%3-Year CAGR
1.58%3-Year CAGR
1.62%3-Year CAGR
6
Source: American Hospital Association, Bureau of Labor Statistics and Goldman Sachs Research estimates.
4%
5%
6%
7%
8%
9%
10%
1950
1955
1960
1965
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
YTD
Une
mpl
oym
ent R
ate
-6%-5%-4%-3%-2%-1%0%1%2%3%4%
Inpa
tient
Adm
issi
ons
Gro
wth
Unemployment Rate Inpatient Admissions Growth
2 Year Lagged Correlation
- R2 of 0.74 since 1980- R2 of 0.66 since 1978- R2 of 0.48 since 1970
Improving unemployment rate in mid-2003 implies mid-2005 rebound in admissions
7
HCA Hospitals Locatedin Growth Markets
Switzerland
U.K.
Percent Growth in Market Population
2000-2005Compared to the
National Average of 4.5%
Generally 25%-40% Market Share 40% of facilities in Texas & Florida
Las Vegas+22%
Southern California
+9%
Denver+9%
Dade+8%
Nashville+8%
Panhandle+10%
Tampa Bay+8%
Dallas/Ft. Worth+12%
Austin+18%
Richmond+8%
Palm Beach+11%Houston
+10%
Kansas City+5%
8
Midwest Division
Facility ExpansionProjects
New & ReplacementFacilities
Infrastructure Develop.,IT&S, & Pat. SafetyShared Services
Routine Capital
Note: Does not include potential new and replacement facilities. Note: Does not include potential new and replacement facilities.
$0.0
$0.5
$1.0
$1.5
$2.0`
2000 2001 2002 2003 2004 2005E
Billions 2000$1.2
2001$1.4
2002$1.7
2003$1.8
2004$1.5
2005E$1.6
HCA Capital Expenditures
New Denver Facility
Distribution of Capital Dollars2005 and Beyond
1,611 New BedsThree New Facilities
310 Beds
Open Heart, Cardiology
Oncology, etc.
33 ERExpansi
ons
Three Facilities511 Beds
Land &Improvements12%/$505M
Surgery/SpecialUnits
21%/$875M
Beds14%/$590M
New Facilities8%/$340M
ER Services8%/$325
OutpatientServices/MOBs
11%/$480M
ReplacementFacilities
10%/$420MNew and
ExpandedServices
16%/$690M
9
Transactions totaling $130 million completed20–30 imaging center and 8-10 surgery center transactions expected to be
completed over the next 12 months
Sarah Cannon Research Institute
(Nashville)
Austin Radiology Assoc.
2 imaging centers
Diversified Radiology (Denver)
4 imaging centers/fifth under construction
Thousand OaksDiagnostic Imaging
Millcreek Imaging Center
Salt Lake City, UT
HCA Surgery Centers
LAD Imaging Centers(Orange City, Deltona)
Total I Management, LLC
(Tampa Bay Area)5 imaging centers
Outpatient Strategy Progressing
First Health (Jacksonville)
MDI 7 Centers
Ultra Open MRI (Tampa) 6 centers
Hope Cancer Centers(Tallahassee) 3 centers
10
Our Commitment to Patient Safety
HCA Has Invested Over$300 Million InPatient SafetyTechnologies
Since ’97
11
Our Commitment to Patient Safety
eMAR & Barcoding
Ensures the five “R’s” – right patient, right medication, right dose, right time, right route of administration
The benefit to our patients…
Prevents the error patients fear most … getting the wrong medication
12
Our Commitment to Patient Safety
Electronic Provider Order Management (ePOM)
Allows physicians to input prescriptions and patient orders electronically and transmit them directly to a pharmacy or hospital department
The benefit to our patients…
Eliminates the risk of a pharmacist or clinician misreading a physician’s handwriting
13
Satisfied PhysiciansHCA physicians rank our facilities higher than that of other hospitals across the country
Source: Gallup Satisfaction Surveys 2003
50%
55%
60%
65%
70%
75%
80%
85%
90% HCA Physicians
National Avg.
14
Bad DebtsBad Debts
$368
$123
$371
$143$411
$156
$431
$156
$428
$182
$577
$209
$566
$229
$636
$201
$694
$218
$661
$232
$688
$228
$626
$248
$574
$284
$ 0
$ 1 ,000
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
$610
$786 $795 $837$1B
$0
$587$567$514$491
Charity Bad Debts
$912 $893
5.2% 4.8%
10.9%
7.6%8.3%
10.6%11.7%
10.5%
7.6%8.6% 8.1%
10.3%11.4% 11.3% 11.9%
9.3%
4.8%5.1%5.0%5.1%5.1%5.0%4.0%4.2%4.2%3.9%3.7%
4.3%
0%
14%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
As reported
$916 $874
$1,581
$579
$2,207
$821
$2,669
$926
$ 0
$ 4 ,5 00
2002 2003 2004
$3,595$3,028
$5B
$0
8.0%
11.4%10.1%
5.0%4.8%4.0%
0%
14%
2002 2003 2004
$2,160
$858
BD % of Net RevenueBD % of Net Revenue BD & Charity % of Gross RevenueBD & Charity % of Gross Revenue excluding Uninsured Discount Changesexcluding Uninsured Discount Changes
Bad Debts and Charity
15
4.4% 4.5% 4.7%4.8%4.3%
4.7%4.2%4.1%4.1%
3.7%
4.4%4.9%
3.9%3%
6%
Uninsured
18.3%17.7%17.0%
20.4%
19.7%18.2%17.5%
17.1%
19.6%
19.3% 19.5%20.8%
20.3%
10%
25%
1Q 00
2Q 00
3Q 00
4Q 00
1Q 01
2Q 01
3Q 01
4Q 01
1Q
022Q
023Q
024Q
021Q
032Q
033Q
034Q
031Q
042Q
043Q
044Q
041Q
052Q
053Q
054Q
05
UninsuredAdmissions
Same Facility% of Total Admissions
20002000 20012001 20022002 20032003 20042004
UninsuredER Visits
Same Facility% of Total ER Visits
N/A
N/A
HCA Financial History – 2005.ppt
14,722 16,087 17,136 16,111 15,782 16,47318,416 17,961 17,944 18,929 19,532 18,947 18,871
0
25,000
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
7.2%vs.PY
2.4%vs.PY
7.5%vs.PY
11.5%vs.PY
13.7%vs.PY
15.2%vs.PY
7.1%vs.PY
3.7%vs.PY
UninsuredAdmissions
Same Facility% Chg from Prior Year
2004: +9.7%
20052005+4.4% +4.3% +4.5%+4.4% +4.3% +4.5% Jan Jan FebFeb MarMar
+4.3% +4.6% +1.2%+4.3% +4.6% +1.2% Jan Jan FebFeb MarMar
+20.4% +20.9% +20.9%+20.4% +20.9% +20.9% JanJan FebFeb MarMar
3.3%vs.PY
16
Source of RevenueSource of Revenue
•Medicare Government funded healthcare program for the elderly
•Managed Care Commercial/Private health insurance
Managed Care and Other - 61.2%
11.6%Uninsured
Medicare27.2%
Pricing increase of 3-4%
Pricing increase of 6-7%
17
Cash flow in 2005 Remains Positive
$1,301$1,584
$2,046
$2,786 $2,822$3,049
$823
$0
$3,500
1999 2000 2001 2002 2003 2004 2005
Net Cash Provided by Operating Activities1
Dollars in Millions
Excluding settlements with government agencies and investigation related costs.
New DividendNew DividendPolicyPolicy$250mm annually
Share Repurchase Program$10.0B in 8 years$2.5B “Dutch Auction” completed at $39.76 inFourth Quarter 2004
Capital Reinvestment$1.5B in 2004
1: 1999-2003 are non-GAAP numbers2: Q1 2005
6.6%6.6%
2
18
Prudent Financial Strategy Focused on Shareholder Value
Excellent Investment Opportunities
Strong Cash Flows
Excellent Long-Term Earnings Growth Outlook
Great Assets
In Summary We Have….