Transcript HCAEdge - Microsoft Internet Information Services 8

Mark Kimbrough
VP, Investor Relations
Chuck Hall
President, North Florida Division
1
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.
2
Collective Knowledge
• 190,000 employees
• 189 hospitals
• 92 surgery centers
• 14 million patients treated annually
• 5.2 million emergency room visits annually
3
What Will Drive HCA’s Future Success
• Located in Large, Growth Markets and Aging Population
• Capital Investments
• Quality Initiatives
• Patient Safety
• Prudent use of Company’s Strong Cash Flows
4
HCA Hospitals Located
in Growth Markets
Denver
+9%
 Generally 25%-40%
Market Share
 40% of facilities in
Texas & Florida
Kansas City
+5%
U.K.
Las Vegas
+22%
Switzerland
Richmond
+8%
Southern
California
+9%
Percent Growth in
Market Population
2000-2005
Compared to the
National Average of
4.5%
Nashville
+8%
Austin
+18%
Panhandle
+10%
Houston
+10%
Dallas/Ft. Worth
+12%
5
Dade
+8%
Tampa Bay
+8%
Palm Beach
+11%
Improving unemployment rate in mid-2003
implies mid-2005 rebound in admissions
4%
3%
Unemployment Rate
5%
2%
1%
6%
0%
7%
-1%
-2%
8%
2 Year Lagged
Correlation
- R 2 of 0.74 since 1980
- R 2 of 0.66 since 1978
- R 2 of 0.48 since 1970
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
2004YTD
9%
Unemployment Rate
Inpatient Admissions Growth
Source: American Hospital Association, Bureau of Labor Statistics and Goldman Sachs Research estimates.
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-3%
-4%
-5%
-6%
Inpatient Admissions Growth
4%
1.62%
3-Year
CAGR
Socio-Demographics—Age Wave
Driving Healthcare Utilization
1.56%
3-Year
CAGR
Acute Care Utilization Index
(2003=100)
125
1.59%
3-Year
CAGR
1.58%
3-Year
CAGR
121
119
120
1.6%
115
1.6%
113
115
1.6%
112
1.5%
110
1.6%
108
110
106
1.6%
105
103
105
102
100
98
100
97
96
95
1.7%
117
1.6%
1.6%
1.6%
1.6%
1.5%
1.6%
1.5%
1.4%
7
Baby Boomer Impact
Accelerates
What Will Drive HCA’s Future Success
• Capital Investments
8
Investments in Our Facilities
• $7.6 billion in existing facilities since 2000 ($1.5 billion ’04)
• $35,700 per bed annually
• $130 million in information technology
• $300 million in patient safety technologies since ’97
9
Distribution of Capital Dollars Remains Unchanged
2003 and beyond
Ongoing Projects in Capital Plan
ER Services
8%/$325
Land &
Improvements
12%/$505M
Outpatient
Services/MOBs
11%/$480M
Three Facilities
511 Beds
33 ER
Expansions
Open Heart, Cardiology
Oncology, etc.
56 Facilities with
Surgery and/or
ICU/CCU expansions
Surgery/Special
Units
21%/$875M
Replacement
Facilities
10%/$420M
New & Expanded
Services
16%/$690M
Three New Facilities
310 Beds
1,611 New Beds
Represents $4.2B of projects
10
Beds
14%/$590M
New Facilities
8%/$340M
Outpatient Strategy Progressing
Transactions totaling $62 million completed
20–30 imaging center and 8-10 surgery center transactions expected to be
completed over the next 12 months
Diversified
Radiology (Denver)
4 imaging
centers/fifth under
construction
Austin Radiology Assoc.
2 imaging centers
Sarah Cannon
Research Institute
(Nashville)
Thousand
Oaks
Diagnostic
Imaging
LAD Imaging
Centers
(Orange City,
Deltona)
Millcreek Imaging Center
Salt Lake City, UT
Total I Management, LLC
Tampa Bay Area/5 imaging centers
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HCA Surgery Centers
What Will Drive HCA’s Future Success
• Quality Initiatives
12
Our Recognition for Quality
13
Satisfied Physicians
90%
HCA Physicians
HCA physicians rank our facilities
higher than that of other hospitals
across the country
85%
National Avg.
80%
75%
70%
65%
60%
55%
50%
Source: Gallup Satisfaction Surveys 2003
14
Our Commitment
to Quality
HCA Quality Review System (QRS)
An internal process that provides ongoing assurance that patient care services
in HCA hospitals meet defined quality standards.
15
Our Commitment to Quality
QRS surveys analyze clinical performance using:
• JCAHO survey scores
• Professional liability risk exposure
• Patient, employee, and physician satisfaction results
16
Our Commitment to Quality
QRS Measures Detail Report Section 1
QRS
2 (Page
2)
QRS Measures
MeasuresDetail
DetailReport
ReportSection
Section
2 (Page
1)
Percent of Potential
Score
Previous
Actual
Score
Quality Standards (35)
JCAHO Standards Survey
Patient Safety (20)
Overall
Hosptial Mortality Index
CABG Mortality/Complication/ALOS
Index
Disaster Readiness
Adult
ICU
LOS
More Than
One Improvement
Cardiac CathSchedule
in Same Admission Rate
Pt Safety
Iatrogenic
Pneumothorax
Rate
AMI Mortality
Index
Submission (Pre-Survey)
*Bilateral
CAP Oxygenation
Assessment
Cardiac
Catheterization
Rate
Validation
(Post-Survey)Rate
AMIPneumoccocal
Aspirin
at Coverage
Arrival
** CAP
Vacination Screening Rate
Adult ICU
*
AMI
Aspirin
at
Discharge
* CAP Smoking
Cessation
ED Length
of Stay Counseling Rate
* AMI ACEI for Lt Ventricular Systolic Dysfunction
Perinatal
Nursing
Fetal
Monitoring
Competency
** CAP
Blood
Culture
before
Antibiotic
Rate
AMI Beta Blocker at Arrival
%
Patient
Arm
Bands
Scanned
** CAP
Timing
(% Cases with first dose under 4 hrs)
AMIAntibiotic
Beta Blocker
at Discharge
Experience
Decubitus
Ulcer
NotLiability
Present
Onwithin
Admission
Rate
* AMIProfessional
Time
to PCI
(%
Cases
120(5)
hours)
Frequency
of Claims - Subtotal
General/Medical
Hosptial
* AMI Time
to Thrombolytic
(% Cases(9)
within 30 minutes)
* AMI
Smoking
Counseling
Rate
Satisfaction
SurveyLaceration
Results
(15)
3rd
& 4th
DegreeCessation
Vaginal
Index
*
HF
Left
Ventricular
Function
Assessment
Rate
Inpatient
Satisfaction
Operative
VaginalOverall
Delivery
Rate
* HF Smoking
Cessation
Counseling
Rate
Overall Satisfaction
ObstetricsPhysician
(2)
* HF Discharge Instructions Provided Rate
Employee
Overall
Satisfaction Rate
Post-op
Hemorrhage
or Hematoma
* HF ACE
Inhibitor Left
Ventricular Systolic Dysfunction Rate
ER Overall
Satisfaction
Post-op Hip
Fracture
Cardiovascular
(16)Rate
Post-op
Pulmonary Embolism or DVT Rate
Status
Post-op
5 Sepsis
- In theRate
top 20th percentile of HCA hospitals
Post-op
Wound
Rate
4 - In theDehiscence
top 40th percentile
of HCA hospitals
Surgical3(5)
- In the top 60th percentile of HCA hospitals
Outcomes2Measures
(25) 20th percentile of HCA hospitals
- In the bottom
Potential
Score
Music City
Hospital %
HCA
Average
%
Previous
Statiscallly
QRS
Subtotal /
Previous Actual
Statiscallly
QRS
Subtotal /
Actual
Measure
Total
Actual Significant
10.00
5
Actual Index /
Significant
Measure
Total
Index /
Quintile
Quintile
Index / @ 90%
20.00
5
Index / Rate /
@ 90%
Quintile
Quintile
Rate /
Ranking
Rate / Confidence Ranking
Rate / LOS
Confidence
Ranking
Ranking
5.00
5
LOS
Score
Score
LOS Interval
LOS
Interval
Score
Score
1.00
N
3.003.00
3
3.50
2.85
4
4.50
5.005.00
5
2.50%
0.89%
4.002.00
4
1.10
2.85 Y 3
99.20%
2.50%
90.20%
45.60%
87.50%
75.00%
93.00%
46.00%
57.40%
89.00%
35.80%
2.30%
90.00%
35.00%
1.00
25.20%
2.75%
40.00%
60.00%
0.89%
84.70%
0.15%
1.02%
0.01%
0.01%
25.00
1 - In the bottom 20th percentile of HCA hospitals
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5.004.00
3.004.00
2.85
2
4.003.00
2.85
1
5.00
2.85
2
3.002.00
2.85
4
4.001.00
2.005.00
5.00
5
33.00
N
3.002.00
3.75
5
4.001.00
3.00
3.75
4
7.00
3.00
3.75
3
3.004.00
3.75
2
2.00
47.00
4.00
= Not applicable for5.00
this facility
4.00
= Not Surveyed for this facility
18.00
2.90
5
4
= Total not applicable
3
4
3
4.00
4
2
4
3
4
4.00
4
3
3.00 2
4
5
4
4.00
4
4.00
4
Status
Medical Necessity Review Process Validated
Current
Weighted
Score
Status
QRS Measures
Measures
Quality StandardsQRS
Survey
Current
Actual
Score
Status
QRS Measures
3
5
2
4
4
3
5
2
1
5
2
1
3
3
4
3
What Will Drive HCA’s Future Success
• Patient Safety
18
Our Commitment to
Patient Safety
HCA Has
Invested Over
$300 Million In
Patient Safety
Technologies
Since ’97
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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
20
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
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Our Commitment to
Patient Safety
ePOM - Safety Alerts
Drug allergies
Dose warnings
Duplicate orders
Abnormal results
Severe drug interactions
Common test interactions
Age limits for certain drugs
22
Addressing Medication Errors (ADES)
6%
4%
eMAR &
Barcoding
ePOM
Ordering
Administration
Transcription
34%
56%
Bates DW et al. Incidence of adverse drug events, potential adverse drug events. JAMA 1995;274:29-34.
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Dispensing
What Will Drive HCA’s Future Success
• Prudent use of Company’s Strong Cash Flows
24
Cash flow in 2004 Remains Positive
Net Cash Provided by Operating Activities1
Dollars in Millions
$3,500
$2,786 $2,822
$3,049
$2,046
$1,584
$1,301
8.0%
$0
1999
2000
2001
2002
2003
2004
Excluding settlements with government agencies and investigation related costs.
1: 1999-2003 are non-GAAP numbers
25
Capital Reinvestment
$1.5B in 2004
Share
Repurchase
Program
$10.0B in 8 years
$2.5B “Dutch Auction”
completed at $39.76 in
Fourth Quarter 2004
New Dividend
Policy
$250mm annually
$7.5 Billion
Share Repurchase
249 Million Shares
1
2004
38% of outstanding shares
$3.1B: 77.4 Shares
Average Price: $30.20
2003 $1.1B: 31.1M Shares
$282M: 6.2M Shares
2002
2001 $706M: 19.2M Shares
2000 $1.3B: 43.5M Shares
650M Shares 12/31/96
423M Shares 12/31/04
2
$1.4B: 55.6M Shares
Impact of Tender Offer
1999 $1.4B: 55.6M Shares
$10 Billion
$930M:
41MShares
Shares
$930M:
41M
312 Million Shares
1998
Average Price: $32.13
37.9M
Shares
$1.3B:
37.9M
Shares
1997 $1.3B:
1: 2004 purchases through 12/31/04
2: Includes other activities affecting share balance (stock option exercises, restricted grants, and ESPP activity).
26
In Summary We Have….
Great Assets
Excellent Investment Opportunities
Strong Cash Flows
Excellent Long-Term Earnings Growth Outlook
Prudent Financial Strategy Focused on Shareholder Value
27