Prime Healthcare Presentation
Prime Healthcare Services
• Prime Healthcare Services and the Prime Healthcare Foundation together are one of of the largest hospital systems in
the U.S
– Founded by Dr. Prem Reddy, M.D., FACC, FCCP.
– Began by rescuing Desert Valley Hospital and Desert Valley Medical Group in Victorville from bankruptcy.
– Specializes in saving failing hospitals from bankruptcy – saving hospitals, saving jobs, saving lives.
– Largest for-profit operator of hospitals in the state of California based on number of facilities.
– Recent diversification into Pennsylvania, Indiana, Kansas, Michigan, Nevada, New Jersey, Rhode Island and Texas.
– Hospitals provide full range of both inpatient and outpatient services including general acute care services,
emergency room, general and specialty surgery, intensive/critical care, obstetrics, behavioral health, rehabilitation
and diagnostic services.
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• Prime Healthcare hospitals are known for always keeping their emergency rooms open, rarely requiring patient diversion
to other hospitals.
• Operates 29 acute care hospitals (includes 6 managed by the non-profit Prime Healthcare Foundation) with 5.2
thousand licensed beds and more than 30,000 employees; facilities are located in the following states:
– California: 15
– Texas: 4
– Indiana: 1
– Kansas: 2
– Michigan: 1
– Nevada: 1
– New Jersey 1
– Pennsylvania: 2
– Rhode Island: 2
Dr. Prem Reddy, Chairman of the Board, President and CEO
Prem Reddy, MD, FACC, FCCP
Dr. Prem Reddy is double Board-Certified in Internal Medicine and Cardiology. During his 25 years of practice in California, he performed more than 5,000 cardiac procedures, including coronary angiography and angioplasty and permanent pacemaker implantations.
In 2001, Dr. Reddy founded Prime Healthcare Services, which owns and operates 22 hospitals. In addition, Dr. Reddy and his family founded and entirely funded the non-profit Prime Healthcare Services Foundation, which owns six non-profit acute care hospitals both in California and Texas. Combined, Prime Healthcare Services and the Foundation have hospitals in nine states: California, Indiana, Kansas, Michigan, Nevada, New Jersey, Pennsylvania, Rhode Island and Texas.
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Among the many accolades, Prime Healthcare was recognized as one of the “Top 15 Health Systems” in the nation in 2013. This was the third time in six years Prime Healthcare has been recognized. In addition, since 2003, Prime Healthcare hospitals have been recognized among the “100 Top Hospitals” in the nation 27 times.
The Foundation, with current assets of over $800 million, also funds various charities that support health education, education scholarships, public healthcare education and free community clinics.
Dr. Reddy was named as one of the “50 Most Influential Physician Executives” in health care by Modern Healthcare in 2014, the fourth time in six years. He wasalso recognized as one of the “Top 25 Minority Executives” in 2014 for the third time.
Prime Healthcare Affiliated Foundations
Dr. Prem Reddy Family Foundation, 501(c)(3), Est. 1989
• Has donated more than $5 million to Victor Valley Community College toward scholarships and the
construction of a new health and science building.
• Donated $500,000 to Cal State San Bernardino and its department of nursing. To recognize his gift, the
nursing lab was renamed the Dr. Prem Reddy Nursing Laboratory.
• Supports the Public Health Library.
• Awards scholarships for students entering the field of healthcare, including the Dr. Prem Reddy Academic
Excellence Scholarship.
• Provides grants and support for free community clinics, community education, public projects and to other non-
profit organizations.
The Prime Healthcare Services Foundation, 501(c)3, nonprofit public charity, Est. 2008The Prime Healthcare Services Foundation, 501(c)3, nonprofit public charity, Est. 2008
• Donated $40 million to build and start a new nonprofit medical school, which will be called the California
University of Science and Medicine.
• Includes five non-profit hospitals donated debt free to the Foundation:
– Encino Hospital Medical Center
– Huntington Beach Hospital
– Montclair Hospital Medical Center
– Pampa Regional Medical Center
– Sherman Oaks Hospital
• Knapp Medical Center acquired directly by the Foundation in 2013.
Both foundations, founded and funded by Dr. Reddy and his family, have combined assets of more than
$800 million.
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Company History: Long Term Track Record of Facility Growth
13 12 12
1619
222 3
4
6
6
10
15
20
25
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Prime Healthcare Hospitals Non-Profit/Donated Hospitals
• Recent expansion focused on diversifying outside CA and into KS, MI, NV, NJ, PA, RI and TX.
• Signed purchase agreements in NJ.
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1 2
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9 13 13 12 12
0
5
2001 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
Acquired Desert Valley Chino Valley Sherman
Oaks
Montclair
Huntington
Beach
La Palma
West Anaheim
Paradise
Valley
Centinela
Encino
Garden Grove
Shasta
San Dimas
Alvarado Harlingen (TX) Roxborough
(PA)
Saint Mary’s
(NV)
Lower Bucks
(PA)
Dallas (TX)
Pampa (TX)
St. John (KS)
Providence (KS)
Landmark (RI)
Rehabilitation
Hospital of RI
(RI)
St. Mary’s (NJ) -
APA
St. Michaels (NJ)
– APA
St. Clare’s Health
System (NJ) –
APA
3 Hospitals
Garden City (MI)
Glendora (CA)
Donated Encino Montclair Sherman
Oaks
Huntington
Beach
Knapp (TX) –
acquired by
Foundation
Pampa Regional
(TX)
Facility Characteristics
Prime Healthcare Today: Strong, Growing, and Diversified Acute
Care Footprint
Facility Locations
Shasta Regional Medical Center
Roxborough Memorial Hospital
Saint Mary's Regional Medical Center
Nevada
California
Lower Bucks Hospital
Dallas Medical Center
Providence Medical Center
St. John Hospital
Kansas
Texas
Hospitals
Occupied
beds
Licensed
beds
Acquisition
date
1. Desert Valley Hospital 148 148 6/1/01
2. Chino Valley Medical Center 70 126 9/1/05
3. La Palma Intercommunity Hospital 75 141 10/1/06
4. West Anaheim Medical Center 110 219 10/1/06
5. Paradise Valley Hospital 195 291 3/1/07
6. Centinela Hospital Medical Center 220 369 11/1/07
7. Garden Grove Medical Center 85 167 7/1/08
8. San Dimas Community Hospital 101 101 7/1/08
9. Shasta Regional Medical Center 120 246 11/1/08
10. Alvarado Hospital Medical Center 120 306 11/17/10
26. Glendora Community Hospital 128 128 5/23/14
California 1,372 2,242
16. St. John Hospital 70 80 4/01/13
17. Providence Medical Center 120 400 4/01/13
Kansas 190 480
27. Garden City Hospital 323 323 7/01/14
Michigan 323 323
Pennsylvania LandmarkMedicalCenter
RehabilitationHospitalof Rhode
Island
MichiganGarden City Hospital
St. Mary’s
Monroe Hospital
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Harlingen Medical Center
Knapp Medical Center
Pampa Regional Medical Center
Paradise Valley Hospital
Alvarado Hospital Medical Center
Garden Grove Hospital Medical Center
West Anaheim Medical Center
La Palma Intercommunity Hospital San Dimas Community Hospital
Centinela Hospital Medical Center
Desert Valley Hospital
Encino Hospital Medical Center
Huntington Beach Hospital
Montclair Hospital Medical Center
Sherman Oaks Hospital
Chino Valley Medical Center
Michigan 323 323
18. Saint Mary’s Regional Medical Center 200 380 7/01/12
Nevada 200 380
28 St. Mary’s Hospital 110 264 8/15/14
New Jersey 110 264
14. Roxborough Memorial Hospital 80 140 2/22/12
15. Lower Bucks Hospital 85 168 10/02/12
Pennsylvania 165 308
11. Landmark Medical Center 140 214 12/31/13
12. Rehabilitation Hospital of Rhode Island 20 82 12/31/13
Rhode Island 160 296
11. Harlingen Medical Center 80 112 12/1/11
12. Dallas Medical Center 50 150 9/26/12
Texas 130 262
Prime Healthcare Services 2,650 4,555
19. Sherman Oaks Hospital 85 153 3/1/06
20. Montclair Hospital Medical Center 102 102 7/1/06
21. Huntington Beach Hospital 100 131 10/1/06
22. Encino Hospital Medical Center 80 150 6/1/08
23. Pampa Regional Medical Center 30 115 6/1/12
25. Knapp Medical Center 120 226 1/2/13
Prime Healthcare Foundation 517 877
Glendora Community Hospital
St. Mary’s Hospital of New Jersey
Prime Healthcare has been recognized by Truven Health Analytics (formerly Thomson Reuters) as one of the “Top 15 Health Systems” in the U.S. based on clinical performance
• Prime Healthcare named as a Top 15 Health System in 2012 and 2013 based on
quality of care, efficiency and patient satisfaction by Truven Health Analytics
(formerly Thomson Reuters)
– Also ranked in the Top 10 in 2009
– Only for profit health system named in the Top 15 in the nation in 2013
• Eight Prime Healthcare hospitals named 100 Top Hospitals in the nation by
Recognized Quality Healthcare Provider
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• Eight Prime Healthcare hospitals named 100 Top Hospitals in the nation by
Truven Health Analytics (formerly Thomson Reuters) in 2014. Prime Healthcare
hospitals have been ranked among the 100 Top Hospitals 27 times.
• Key criteria evaluated:
– Mortality rates
– Medical complications
– Medicare core measures (quality measures) and patient safety standards
– Risk-adjusted length of stay
– Patient satisfaction
Top 15 Health Systems in the Nation by Truven Health Analytics – 2012 Detail
Top 15 Health Systems Clinical Metrics of Top Health Systems
Recognized Quality Healthcare Provider (Cont’d)
Health System Location
Large Health Systems (> $1.5 bn)
Banner Health Phoenix, AZ
CareGroup Healthcare System Boston, MA
Jefferson Health System Radnor, PA
Memorial Hermann Healthcare System Houston, TX
St. Vincent Health Indianapolis, IN
Medium Health Systems ($750 mm - $1.5 bn)
Baystate Health Springfield, MA
Winning Health SystemMortality
Index
Complic-ationsIndex
Patient SafetyIndex
Core Measure Percent
(%) ALOS (days)
Banner Health 0.85 0.98 0.91 96.4 4.8
Baptist Health 0.93 0.72 0.72 97.2 4.5
Baystate Health 0.65 0.86 0.60 96.6 4.8
CareGroup Healthcare System 0.81 1.42 0.70 97.3 4.8
Geisinger Health System 0.80 1.04 0.82 96.2 4.5
HCA Central and West Texas Division 0.83 0.86 0.86 99.2 5.2
Top performer
Second in class
Third in class
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Baystate Health Springfield, MA
Geisinger Health System Danville, PA
HCA Central and West Texas Division Austin, TX
Mission Health System Asheville,NC
Prime Healthcare Services Ontario, CA
Small Health Systems (<$750 mm)
Baptist Health Montgomery, AL
Maury Regional Healthcare System Columbia, TN
Poudre Valley Health System Fort Collins, CO
Saint Joseph Regional Health System Mishawaka, IN
Tanner Health System Carrollton, GA
HCA Central and West Texas Division 0.83 0.86 0.86 99.2 5.2
Jefferson Health System 0.81 0.85 1.01 98.1 4.9
Maury Regional Healthcare System 0.70 0.62 0.77 95.3 4.1
Memorial Hermann Healthcare System 0.70 0.73 0.94 97.4 4.9
Mission Health System 0.97 0.73 0.69 96.9 4.7
Poudre Valley Health System 0.91 1.05 0.63 95.5 4.2
Prime Healthcare Services 0.55 0.63 0.55 99.0 4.3
Saint Joseph Regional Health System 0.99 0.79 0.77 97.6 4.4
St. Vincent Health 1.04 0.68 0.88 93.8 4.7
Tanner Health System 0.92 0.62 0.76 96.8 4.5
Benchmark Health Systems Medians 0.83 0.79 0.77 96.9 4.7
Peer Group Medians 1.04 0.98 0.98 95.8 5.1
Note: Prime’s performance measures place the Company in the top quintile of all health systems
Top 15 Health Systems in the Nation by Truven Health Analytics – 2013 Detail
Top 15 Health Systems Clinical Metrics of Top Health Systems
Recognized Quality Healthcare Provider (Cont’d)
Health System Location
Large Health Systems (> $1.5 bn)
Advocate Health Care Oak Brook, IL
Banner Health Phoenix, AZ
Memorial Hermann Healthcare System Houston, TX
OhioHealth Columbus, OH
Scripps Health San Diego, CA
Medium Health Systems ($750 mm - $1.5 bn)
Alegent Creighton Health Omaha, NE
Winning Health SystemMortality
Index
Complic-ationsIndex
Patient SafetyIndex
Core Measure Percent
(%) ALOS (days)
Advocate Health Care 0.97 0.95 0.97 98.4 4.7
Alegent Creighton Health 1.00 0.99 0.93 98.7 4.8
Asante 0.98 0.94 0.81 97.1 4.4
Banner Health 0.96 1.00 0.94 97.2 4.4
Cape Cod Healthcare 0.97 1.02 0.79 97.2 4.5
Exempla Healthcare 0.93 1.01 0.97 97.4 4.4
Top performer
Second in class
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Alegent Creighton Health Omaha, NE
Exempla Healthcare Denver, CO
Mission Health Asheville, NC
Prime Healthcare Services Ontario, CA
TriHealth Cincinnati, OH
Small Health Systems (<$750 mm)
Asante Medford, OR
Cape Cod Healthcare Hyannis, MA
Mercy Health Southwest Ohio Region Cincinnati, OH
Poudre Valley Health System Fort Collins, CO
Roper St. Francis Healthcare Charleston, SC
Exempla Healthcare 0.93 1.01 0.97 97.4 4.4
Memorial Hermann Healthcare Sys 0.96 0.95 1.08 98.1 4.7
Mercy Health Southwest Ohio Region 0.93 0.95 0.89 97.4 4.5
Mission Health 1.01 0.97 0.87 97.7 5.0
Ohio Health 0.98 0.97 0.99 98.6 4.4
Poudre Valley Health System 0.96 0.99 0.91 96.9 4.0
Prime Healthcare Services 0.94 0.89 0.72 97.8 4.0
Roper St. Francis Healthcare 0.99 0.91 0.93 97.3 5.0
Scripps Health 0.97 0.99 0.98 98.5 4.6
TriHealth 0.97 0.98 0.89 97.6 4.7
Bench Median 0.97 0.97 0.93 97.6 4.5
Peer Median 1.00 1.00 1.00 96.5 5.1
Note: Prime’s performance measures place the Company in the top quintile of all health systems
Recognized Quality Healthcare Provider (Cont’d)
• Truven Health Analytics (formerly Thomson Reuters) with Modern
Healthcare Magazine also issues a study each year that recognizes
the 100 Top Hospitals in the Nation. Prime Healthcare hospitals are
regularly among the 100 Top Hospitals:
• Centinela Hospital Medical Center – 3 Times including 2014
• Chino Valley Medical Center – 3 Times including 2014
• Desert Valley Hospital – 5 Times
• Garden Grove Hospital Medical Center – 3 Times including 2014
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• Garden Grove Hospital Medical Center – 3 Times including 2014
• La Palma Intercommunity Hospital – 2014
• Montclair Hospital Medical Center – 2 Times
• Paradise Valley Hospital – 2014
• San Dimas Community Hospital – 2 Times including 2014
• Shasta Regional Medical Center – 2 Times including 2014
• West Anaheim Medical Center – 5 Times including 2014
The Company's hospitals have been recognized numerous times in the past by various renowned national benchmarking organizations for their quality and efficiency in patient care
Recognized Quality Healthcare Provider (Cont’d)
Eleven Prime Healthcare Hospitals were recognized as Top Performers
by The Joint Commission in 2013, the leading accreditation agency
of health care organizations in the nation (eight in California):
• Centinela Hospital Medical Center
• Encino Hospital Medical Center (Non-Profit)
• Garden Grove Hospital Medical Center
• Huntington Beach Hospital (Non-Profit)
• La Palma Intercommunity Hospital
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• Paradise Valley Hospital
• San Dimas Community Hospital
• Shasta Regional Medical Center
• In Kansas: Saint John Hospital
• In Pennsylvania: Roxborough Memorial Hospital
• In Texas: Harlingen Medical Center
The Company's hospitals have been recognized numerous times in the past by various renowned national benchmarking organizations for their quality and efficiency in patient care
Infrastructure Improvements
In 2013, Prime Healthcare spent approximately $138 million on Capital Improvements and Equipment.
Since 2005, the organization has invested approximately $788 Million on Capital Improvements and Equipment for its facilities.
� 65 bed expansion at Desert Valley Hospital including new operating rooms and new Heart Center with full cardiac surgery program.
� New Cardiac Cath Labs at Desert Valley Hospital, Chino Valley Medical Center, Huntington Beach Hospital, and Sherman Oaks Hospital.
Prime Healthcare Hospitals continuously strive to improve patient care and experience by improving their infrastructure by investing in:
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� ER expansion at Roxborough Memorial Hospital in Pennsylvania.
� $40 million investment in Landmark Medical Center and the Rehabilitation Hospital of Rhode Island.
� $30 million investment in St. Mary’s Hospital in New Jersey.
� $40 Million ER expansion and seismic upgrades at Centinela Hospital Medical Center.
� New state-of-the-art Patient Monitoring and IT Systems.
� State of the art medical/radiology equipment.
� Information Systems Infrastructure.
� Hospital Physical Environment/ Plant improvements.
� Modernization of Hospital Systems to increase safety.
Charity Care
Prime Healthcare’s for-profit and non-profit hospitals provide more charity and uncompensated care on a per patient day basis than their competitors.
Since 2010, Prime Healthcare hospitals have provided more than $2 Billion in charity and uncompensated care.
The Prime Healthcare Foundation also operates two indigent community clinics.
Prime Healthcare Hospitals continuously strive to provide safety net acute care services to uninsured and indigent residents of the communities they serve.
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� 2010 - $ 383 million
� 2011 - $ 395 million
� 2012 - $ 487 million
� 2013 - $ 739 million
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