Team Health — Debt Investor Presentation (January 2017)
33 slides from Team Health's debt investor presentation, Jan 6, 2017
Slide 1: Unmatched national platform of provider services
Source: Company filings TeamHealth’s reach spans 47 states and approximately 3,300 acute and post-acute facilities and physician groups nationwide. The Company’s national scale enables it to maintain and expand its foothold in the highly fragmented emergency medicine, hospital medicine, and anesthes
Slide 2: Summary of service lines
Source: TeamHealth management Summary of service lines Emergency medicine • One of the largest providers of outsourced clinical staffing and administrative services for hospital-based and free standing EDs in the US • Core services: contract management, recruiting, credentials coordination, staffing
Slide 3: Transaction overview
Pro forma adjusted EBITDA margin of 12.1% Source: Company filings and TeamHealth management Transaction overview On October 31, 2016, TeamHealth Holdings, Inc. entered into a definitive agreement to be acquired by funds affiliated with Blackstone in a transaction valued at approximately $6.1 billion
Slide 4: Blackstone's equity sponsorship
Team Health Holdings, Inc. will be the financial reporting entity post-close Blackstone’s equity sponsorship Blackstone (NYSE: BX) is one of the world’s leading investment firms. Blackstone’s alternative asset management businesses include the management of corporate private equity funds, real estat
Slide 5: Calculated on a preceding months basis as of 09/30/16 for ED operations, calculated as
Calculated on a preceding 12 months basis as of 09/30/16 for ED operations, calculated as full year 2015 minus the nine months ended 09/30/15 plus the nine months ended 09/30/16
Slide 6: Diversified revenue base
Source: TeamHealth management TeamHealth benefits from a highly diversified revenue base. In 2013, the Company’s segment mix was comprised of emergency medicine at 69%, hospital medicine at 12% and anesthesia at 10%. Over the last 3 years, the Company’s revenue base has diversified further through o
Slide 7: Geographic diversification and national infrastructure
Source: Company filings In addition to segment diversification, TeamHealth believes its geographic diversification provides it with a strong competitive position within the highly fragmented markets that it serves, utilizing its presence to extend services and grow organically while also being a par
Slide 8: Calculated on a preceding months basis as of 09/30/16 for ED operations, calculated as
Calculated on a preceding 12 months basis as of 09/30/16 for ED operations, calculated as full year 2015 minus the nine months ended 09/30/15 plus the nine months ended 09/30/16
Slide 9: TeamHealth management estimates
Source: TeamHealth management estimates
Slide 10: Locally focused service with national resources
Calculated on a preceding 12 months basis as of 09/30/16 for ED operations, calculated as full year 2015 minus the nine months ended 09/30/15 plus the nine months ended 09/30/16 Source: TeamHealth management A critical factor of this business model is TeamHealth’s ability to deliver a locally focuse
Slide 11: Physician recruitment and retention
Calculated on a preceding 12 months basis as of 09/30/16 for ED operations, calculated as full year 2015 minus the nine months ended 09/30/15 plus the nine months ended 09/30/16 Source: TeamHealth management TeamHealth has consistently been able to recruit and retain high quality physicians to servi
Slide 12: Anesthesia and value-based care positioning
Source: TeamHealth management Additionally, TeamHealth believes its service offering in anesthesia positions it to be a critical partner to hospitals given the necessity of a successful surgery unit for a hospital’s profitability. TeamHealth’s ability to help coordinate surgery, reduce costs, and in
Slide 13: Cash flow conversion and asset-lite model
Source: TeamHealth management; 1 Based on LTM 9/30/16 pro forma adjusted EBITDA of $529.8mm With robust EBITDA margins along with an asset-lite operating model (maintenance capex has consistently been at or below 1% of net revenues), the Company is able to produce an attractive cash flow conversion
Slide 14: De-leveraging under Blackstone ownership
Defined as (Adjusted EBITDA less maintenance capex) / Adjusted EBITDA Source: TeamHealth management De-leveraging under Blackstone ownership (2005 to IPO)
Slide 15: Operating leverage and revenue cycle management
As of September 30, 2009 Source: TeamHealth management Regional operating units supported by TeamHealth’s centralized national infrastructure are designed to continually drive operating leverage, improve efficiencies and align employee incentives to drive growth. Information systems and economies of
Slide 16: Revenue growth contribution
As of September 30, 2016 Source: Company filings Revenue growth contribution
Slide 17: As of September 30, 2016
As of September 30, 2016 Source: TeamHealth management
Slide 18: Plans to grow revenue from existing customers
As of September 30, 2016 Source: TeamHealth management The Company plans to continue to increase revenues from existing customers by: • Capitalizing on increasing patient volumes • Implementing enhanced point of service capture of non-clinical patient data, resulting in improved billing and collecti
Slide 19: Facilities served and contracting model
Management estimates TeamHealth serves approximately 3,300 civilian and military hospitals, clinics and physician groups in 47 states with a team of more than 20,000 affiliated healthcare professionals, including physicians, physician assistants, nurse practitioners, and nurses. Its facilities serve
Slide 20: Company history
Source: TeamHealth management Company history
Slide 21: Segment overview
Segment overview TeamHealth provides a full range of outsourced physician staffing and administrative services in emergency medicine, hospital medicine, anesthesiology, inpatient services (hospitalists comprising the specialties of internal medicine, critical care, orthopedic surgery, general surger
Slide 22: Services overview
Source: Company filings Services overview Contract management The Company’s delivery of services for a clinical area of a healthcare facility is led by an experienced contract management team of clinical and other healthcare professionals. The team usually includes a regional medical director, an on
Slide 23: Outsourced physician staffing market
Source: Centers for Medicare & Medicaid Services, Office of the Actuary TeamHealth estimates the combined size of the domestic outsourced healthcare professional staffing market for emergency medicine, hospital medicine and anesthesia to be approximately $40 billion. Over the last decade, healthcare
Slide 24: Emergency department market fragmentation
Source: Analysis of American Hospital Association Annual Survey data, 2014, for community hospitals. US Census Bureau: National and State Population Estimates, July 1, 2014 Note: 1 Defined as hospital reporting ED visits in the AHA annual survey TeamHealth estimates that, of all hospitals that opera
Slide 25: Post-acute market consolidation opportunity
Note: These numbers represent only program spending; they do not include beneficiary copayments. Numbers are rounded and may not sum up to total Source: CMS Office of the Actuary 2016 The growing market for the provision of post-acute clinician services is highly fragmented. Through TeamHealth’s acq
Slide 26: Demand drivers for hospitalists and post-acute clinicians
Source: TeamHealth management estimates The growing demand for hospitalists and post-acute clinicians is also driven by: • Primary care physician’s role in hospital care decreasing due to the increasingly specialized nature of hospital care, the demands of treating higher acuity patients in an outpa
Slide 27: Key recent industry developments
Total episode cost by first setting for post-discharge care 30-day fixed-length episodes Source: AHA Issue Brief - Moving Towards Bundled Payment 2013 Key recent industry developments The Affordable Care Act and recent election impacts Unlike hospitals and other healthcare providers, TeamHealth did
Slide 28: Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) On April 14, 2015, Congress enacted the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) that permanently repealed the old Medicare Physician Fee Schedule payment system which was based on the Sustainable Growth Rate (SGR) form
Slide 29: Competitive positioning
Emergency TEAMHealth @ =" Envision e ath. ae @ Market Leader (P Moderate Presence O Non-Core Inpatient services a Postacute Anesthesia Surgery centers (e) ‘Ambulance e)
Slide 30: Adjusted EBITDA
Adjusted EBITDA 1
Slide 31: Adjusted EBITDA
‘Adjusted EBITDA = Pro forma adjusted EBITDA ee 2012 2013, 2014 2015 Lm 0930116 Ad ETO 1955 09% 19% 109% 02%
Slide 32: Adjusted EBITDA – maintenance capex
Adjusted EBITDA – maintenance capex 3
Slide 33: Income statement summary (as reported)
Note: Financials are as reported. CAGR represents 2012 – LTM 09/30/16 Pro forma adjusted EBITDA margin is 12.1% Maintenance capex consist of purchases of property and equipment; acquisition capex consists of cash paid for acquisitions, net of cash acquired. Acquisition capex includes contingent purc
Team Health Holdings — Debt Investor Presentation (January 2017) on 6ix