U.S. healthcare - HCA Investor Center

34th Annual J.P. Morgan
Healthcare Conference
San Francisco, CA
January 11, 2016
Milton Johnson
Sam Hazen
Vic Campbell
Mark Kimbrough
Chairman of the Board & Chief Executive Officer
Chief Operating Officer
Senior Vice President
Vice President, Investor Relations
Forward Looking Statements and
Non-GAAP Financial Measures
This presentation may contain certain forward-looking statements provided by Company management. These statements are
intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that do not relate solely to historical or current facts, including statements regarding future
operations, financial results, cash flows, costs and cost management initiatives, capital structure management, growth rates, and
operational and strategic initiatives, and can also be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,”
“estimate,” “anticipate,” “intend,” “plan,” “initiative,” “continue” or words or phrases of similar meaning. These forward-looking
statements speak only as of the date hereof and are based on our current plans and expectations and are subject to a number of
known and unknown uncertainties and risks, many of which are beyond our control. These risks and uncertainties are described
under headings such as “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2014 and other reports
filed with the Securities and Exchange Commission. As a consequence, current plans, anticipated actions and future financial position
and results of operations may differ significantly from those expressed in any forward-looking statements in today’s presentation.
You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented and we do not
intend to update any of these forward-looking statements.
The presentation may contain certain non-GAAP measures, including Adjusted EBITDA. The Company’s earnings releases for the year
ended December 31, 2014, and quarter and nine months ended September 30, 2015, located on the Company’s investor relations
page at www.hcahealthcare.com, include reconciliations of the difference between certain non-GAAP financial measures with the
most directly comparable financial measure calculated in accordance with GAAP. These non-GAAP financial measures should not be
considered alternatives to the GAAP financial measures.
References to “Company” used herein refer to HCA Holdings, Inc. and its affiliates, unless otherwise stated or indicated by context.
2
Who we are
Healthcare industry overview
Positioned to succeed
3
Who we are
Pearland Medical Center
Pearland, Texas
Opened February 2015
Sources of differentiation
Diversified
portfolio
Financial
strength
Deep and
experienced
leadership
Scale
Strong
operating
culture
5
Diversified portfolio in growing markets
Salt
Lake
20%
Western
Idaho
Denver
32%
Idaho
Falls
San Jose
17%
New
Hampshire
Kansas
City
23%
Nashville
34%
Las Vegas
32%
Las Vegas
Austin
41%
Terre
Haute
NOVA
SWVA
Frankfort
Wichita
Dallas/
Fort Worth
18%
Richmond
37%
Chattanooga
Oklahoma
City
NWGA
Atlanta
Augusta
Middle GA
Central
Louisiana
El Paso
Anchorage
Panhandle
San
Antonio
36%
Note: Percentages represent current market share1
Tallahassee
Lafayette New
Orleans
Corpus
Christi
McAllen
Brownsville
Houston
19%
Myrtle Beach
London
Charleston
Jacksonville
North Central Florida
Orlando
Treasure Coast
Tampa/
St. Pete
29%
Miami/Fort
Lauderdale
22%
6
Diversified mix of facilities and services
Acute Care
Ambulatory
Services
Access
Centers
Physicians
167
113
66
~830
Urgent Care
Centers
Physician
Clinics
Hospitals
ASCs
44K
15
55
35K
Licensed Beds
GI Centers
Freestanding ERs
Active Medical Staff
Enterprise Services
Shared
Services
7
Delivering strong topline growth
Admissions
1.9M
Equivalent
Admissions
3.1M
ER Visits
8.0M
Surgeries
1.4M
Revenue
$39.1B
Values represent LTM September 2015
Percentages represent 5 year CAGR: 2010 – LTM September 2015
3.7%
4.6%
6.9%
2.4%
6.9%
8
Converting to solid EBITDA growth
5-year Adjusted EBITDA CAGR: 5.7%
$8.0
$7.7
$7.5
$7.0
$6.5
In Billions
$6.0
$5.9
$5.5
$5.0
2010
2011
2012
5 year adjusted EBITDA CAGR: 2010 – LTM September 2015
2013
2014
Sept 2015-LTM
9
Deploying a balanced capital allocation
Cash Flows from Operations $18.5B
Capital Expenditures
Acquisitions
Special Dividends
Share Repurchases
$8.9B
$3.3B
$3.2B
$5.1B
Use of Cash Flows from March 2011 IPO through 3Q 2015
10
Advancing the patient experience
Competent
Employees
Big Data/
Best
Practices
Patient
Experience
Values:
Partnering
with
Physicians
•
•
•
•
Safe
High quality
Efficient
Compassionate
106 Hospitals
2015 Top Performers by
the Joint Commission
Technology
11
Healthcare
industry overview
StoneSprings Hospital Center
Dulles, Virginia
Opened December 2015
Positive industry outlook
 U.S. health spending projected to grow
5.8% annually from 2014-2024 2
•
•
•
•
Improving economic conditions
Aging population
Clinical innovation
ACA coverage expansion
 Stable pricing environment
 No significant change in competitive
dynamics
13
HCA markets are more favorable
HCA
U.S.
5-year Population CAGR 3
1.2%
0.7%
5-year Demand CAGR 4
2.2%
1.6%
GDP Growth 5
3.0%
2.4%
Unemployment Rate 6
4.6%
4.8%
14
Healthcare reform potential remains
3.9M* remaining
eligible enrollees7, 8, 9
<15% of HCA beds in
Medicaid expansion states
Texas
1.5M*
Florida
840K*
*Remaining eligible enrollees within HCA markets only7, 8, 9
HCA Medicaid
Expansion State10
15
Positioned to succeed
Citrus Park Emergency Room
Tampa, Florida
Opened June 2015
Be the provider system of choice
Operational
Excellence
Coordination
Across
Continuum
Local
Sustainable
Growth
Strong
Physician
Relationships
Access and
Convenience
Comprehensive
Service Lines
17
Leveraging our scale locally
Economies
Innovation
Capital
 Make our business better
 Drive more growth
 Get to market faster
 Support even better execution
18
Making significant investments
in our markets
$12+ billion since
the IPO
Acquisitions
Hospitals
Beds
16
3,911
Capacity
Free Standing ERs
37
FSER Beds
430
ER Beds
181
Hospital Beds
1,950
19
Nashville market overview
3
12 Hospital Campuses
1 Children’s Campus
1 Behavioral Campus
2,000 Beds
1 Trauma Center
17 Imaging Centers
6 Ambulatory
5
Surgery Centers
7 Health Parks
66 TriStar Medical
Group Locations
3
2
7
3 Freestanding ERs
14 Minute Clinics
2
10 CareSpot
5
3
Urgent Care Centers
1 Transfer Center
20
Dallas/Fort Worth market overview
HOSPITAL CAMPUSES (12)
Children’s Hospital (1)
Behavioral Hospital (1)
Beds (3,000)
Trauma Centers (3)
Freestanding ERs (6)
CareNow (25)
Pedi Urgent Care (6)
Women’s Imaging (12)
ASCs (11)
Physician Offices (11)
21
Sustaining market share growth
24.4%
24.3%
24.2%
24.0%
Share gains over PY
23.8%
 30 of 38 Markets
23.6%
23.4%
23.4%
 14 of 19 Service Lines
23.2%
23.0%
22.8%
Prior Year (3)
Prior Year (2)
Note: Percentages represent current market share1
Market Share Notes: Source = State data via Stratasan
Prior Year
Current Year
22
Sources of differentiation
Diversified
portfolio
Financial
strength
Deep and
experienced
leadership
Scale
Strong
operating
culture
23
Notes and Sources
1
Market Share Notes:
• Same Store. Composition Market (In Market + In Migration)
• Statistics are based on data for the most recently available 48 month period for 38 defined markets.
• Analysis includes data for 32 markets through 1Q‘15, 2 markets through 4Q‘14 (Kansas City & Wichita), & 4 markets through
4Q’13 (CA)
• Source = State data via Stratasan
2
CMS Office of the Actuary in the Centers for Medicare & Medicaid Services, July 2015. NHE Projections 2014 -2024 Forecast
Summary: https://www.cms.gov/Research - Statistics -Data-and- Systems/Statistics -Trends-andReports/NationalHealthExpendData/Downloads/proj2014 .pdf
3
ESRI – 5 year CAGR, 2015 -2020 population projection
4
Sg2 – 5 year CAGR, 2015 -2020 inpatient admissions Demand based on epidemiology and population forecasts, 2014 base year.
Excludes normal newborns.
5
U.S. Dept. of Commerce, Bureau of Economic Analysis - 2014% Real GDP Growth over 2013: U.S. Bureau of Economic Analysis,
National Real GDP (millions of chained 2009 dollars, http:// www.bea.gov/newsreleases/national/gdp/ gdpnewsrelease.htm.
EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, Nov 24, 2015
6
U.S. Dept. of Labor, Bureau of Labor Statistics - November 2015P Unemployment Rate, Not Seasonally Adjusted. Table 1. Civilian
labor force and unemployment by state and metropolitan area. http://www.bls.gov/news.release/metro.t01.htm . As of
December 31, 2015.
7
HHS, Office of the Assistant Secretary For Planning and Evaluation (ASPE), 2015 Plan Selections by ZIP Code in the Health
Insurance Market Place. Published April 2015. Kaiser Family Foundation
8
Potential enrollment eligible population defined as people who were uninsured or buying their own insurance before the ACA
went into effect, who are not eligible for Medicaid or employer coverage, who are not in the coverage gap, and who are citize ns
or authorized immigrants.
9
HCA market ZIP codes were mapped to Public Use Microdata Areas (PUMA) utilized by Kaiser Family Foundation for its
enrollment penetration estimates .
10
Kaiser Family Foundation. Status of State Action on the Medicaid Expansion Decision as December 17, 2015.
24
34th Annual J.P. Morgan
Healthcare Conference
San Francisco, CA
January 11, 2016
Milton Johnson
Sam Hazen
Vic Campbell
Mark Kimbrough
Chairman of the Board & Chief Executive Officer
Chief Operating Officer
Senior Vice President
Vice President, Investor Relations