l JP M 32nd Annual J.P. Morgan Healthcare Conference

32nd Annual
A
l J.P.
J P Morgan
M
Healthcare Conference
FORWARD-LOOKING STATEMENTS
AND NON
NON-GAAP
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. Forwardlooking
thatt d
do nott relate
historical
l ki statements
t t
t include
i l d allll statements
t t
t th
l t solely
l l tto hi
t i l or currentt ffacts,
t iincluding
l di statements
t t
t
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
risks, many of which
are beyond our control. These risks and uncertainties are described in headings such as “Risk Factors” in our annual
report on Form 10-K for the year ended December 31, 2012 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 undulyy rely
y on such forward-looking
g statements when evaluating
g the information p
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, 2012 and for the quarter and nine months ended September 30, 2013, located
hcahealthcare com include reconciliations of the difference between
on the Company’s
Company s investor relations page at www
www.hcahealthcare.com,
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.
1
1
Most people know HCA as a hospital company, with
leading market positions across the U.S.
Anchorage
Central London
Western Idaho
New Hampshire
Idaho Falls
Salt Lake City
Denver
San Jose
N‐VA
Terre
Haute
Kansas City
S‐VA
Wichita
Las Vegas
Richmond
Frankfort
Nashville
Oklahoma City
Chattanooga
Augusta
NWGA
Atlanta
Middle GA
Dallas /
Fort Worth
Southern California
El Paso
Austin
Central Louisiana
L f tt
Lafayette
San Antonio
New Orleans
Corpus Christi
McAllen
Myrtle Beach
Trident / Charleston
Houston
Tallahassee
Panhandle
Tampa
Jacksonville
North Central Florida
Orlando
Treasure Coast
Miami/Fort Lauderdale/WPB
Brownsville
Note: Gold labels indicate top 10 markets by EBITDA
2
HCA is the largest non-governmental hospital player in the
U.S. … and much more
Leading hospital
provider
id …
9 #1 or #2 in key markets with market shares ranging from
~ 20% to 40%
9 Operating in 17 of 25 fastest growing MSAs with
populations > 500,000
9 Provide ~ 4% - 5% of all U.S. hospital services
AND
Leader across a
range
g of services …
9 One of the largest clinical networks, with over 35K
active physicians
9 Leader in oncology clinical trials, 2nd to MD Anderson
9 Second largest behavioral health provider
9 A leading national player in ASCs
3
In many markets, like Nashville, we have built “integrated
delivery” networks that extend well beyond hospitals
10 hospitals
3 free-standing EDs
43 medical group
locations
3 ambulatory
surgery centers
9 imaging centers
11 urgent
g
care
centers
4
HCA outperforms on a variety of metrics
Quality1
110 HCA facilities
(80%) named as
Top
p Performers
on Key Quality
Measures, versus
33% nationwide
Growth2
3%
For profit
composite4
Industry
average5
Recent recognition
(2013)
Profitability3
0%
0 6%
0.6%
Admissions CAGR
2010-2012
19%
For profit
composite4
Industry
average6
12%
%
4%
Adjusted EBITDA
margin
1 The Joint Commission; 2 Growth in same facility inpatient admissions; 3 For Q3 2013, Adjusted EBITDA as a percent of revenue after provision
for doubtful accounts; 4 Quarterly filings; 5 Intellimed 2010-2012 for 27 markets where data is available through Q1 2013; 6 As reported by
Cleverley and Associates, 2011 (latest data as of May 2013)
5
This performance is driven by HCA’s key sources of
differentiation
Strong,
diversified
assets and
markets
Financial
strength
Deep and
experienced
leadership
Scale
Strong
operating
culture
6
When thinking about growth strategies, we focus on a
number of dimensions … in addition to clinical quality
Breadth and depth
off services
i
Access points
Capital deployment
Core
services
S i Line
Service
Li Focus
F
E.g., Cardio, Neuro, ED
Womens, Behavioral,
Rehab
High
g intensity
y and deep
p
service capability
E.g., TAVR, Trauma, Stroke network
7
Examples of a few of our physician and patient focused
programs
Service line
g
strategies
‘OR of choice’
initiative
Patient Contact
Centers
Top 10 service lines
have grown 60bps
between Q1 2012 and
20131
43 bps surgical
g
share growth
between Q1 2012
and 20131
2.2 million calls
1 Same facility statistics based on data for the most recently available 24 month period from 37 defined markets (27 markets through
Q1 ’13, 5 markets through Q4 ’12, 1 market through Q3 '12 & 4 markets through Q4 ’11) via Intellimed; 2 Annualized 2013 figure
8
We have invested >$5.2B over past three years to support
growth, and expect to invest $2B+ in 2014
Investing in growth:
Added 1500+ active medical
staff and 200+ access points1
New technological capabilities and
enhanced services
Over past 2 years, added ~900 new
inpatient beds
Note: all figures from Jan 2011 through Nov 2013
1 Includes Free-standing EDs, Urgent Care Centers, Surgery Centers, Provider clinics
9
Execution of these strategies has enabled us to sustain
industry-leading levels of growth
22 straight quarters of same facility growth
Sa
ame facility equiva
alent
admissions (000
0s)
e ce t
Percent
growth1
0 1.9
9 1.8
8 3
0 4.4 4.8
8 2.6
6 1.1 1.6
6 0
3 3
3 1.9
9 3
8 3
9 2.6
6 5
0 0
2.0
3.0
0.7 2.3
3.3
3.8
3.2 3
3.7 3
3.9
5.0
0.4 1.1 1.1
750
Market
share
growth of
91bps
from Q1
‘11-’132
700
650
600
550
500
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2008
2009
2010
2011
2012
2013
1 Growth of same facility equivalent admissions from prior year; 1Q13, 1Q12, and 1Q09 have been normalized for leap year;
10
2 Intellimed
There is significant discussion about change in the
healthcare industry
The
Affordable
Care Act
Health
Exchanges
New
reimbursement
models
Rise of
consumerism
11
While HCA is adapting to these changes, where appropriate,
we are taking
g a balanced approach
pp
2017 coverage picture1
HCA iis preparing
i ffor
industry changes to
position itself for
p
future success …
Population affected
by Exchanges
Uninsured
Group /
Employer
Medicaid
Non-group
& Medicare
1 CBO estimates as of May 2013
… while continuing to
build on strategies
th t have
h
l d to
t our
that
led
strong historical
p
performance
12
HCA is well positioned to benefit from Affordable Care Act
over next several years
There are many uninsured in HCA
markets that should gain coverage …
Percentage uninsured by state
0-5%
11-15%
16-20%
20%+
HCA
state
… and we are well positioned to gain
volume from these newly insured
97%
HCA hospitals
h
it l
included in Bronze
and Silver plans in
HCA markets
60%
Of these Bronze
plans (and 49% of
Silver) including
HCA hospitals are
1st or 2nd lowest
priced product in
their market
13
And we are continuing to position ourselves for future
success
Industry-leading quality and patient experience
Profitable growth through physician and patient
relationships and value
Efficiencyy levels that continue to lead the industryy
Informed response to market changes
Unparalleled development of future leaders
14
We are confident that our core strengths will continue to
position us for future success
Strong,
diversified
assets and
markets
Financial
strength
Deep and
experienced
leadership
Scale
Strong
operating
culture
15