Attached files
| file | filename |
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| EX-99.1 - EXHIBIT 99.1 - Encompass Health Corp | brandingannouncementpressr.htm |
| 8-K - 8-K - Encompass Health Corp | brandingannouncement8-k.htm |
1
Corporate Name Change and Rebranding
Initiative Announcement
July 11, 2017
Supplemental Information
2
The information contained in this presentation includes certain estimates, projections and other forward-looking information that reflect
HealthSouth’s current outlook, views and plans with respect to future events, including strategy, expenditures, demographic trends, financial
performance, financial assumptions and business outlook. These estimates, projections and other forward-looking information are based on
assumptions HealthSouth believes, as of the date hereof, are reasonable. Inevitably, there will be differences between such estimates and
actual events or results, and those differences may be material. There can be no assurance any estimates, projections or forward-looking
information will be realized.
All such estimates, projections and forward-looking information speak only as of the date hereof. HealthSouth undertakes no duty to
publicly update or revise the information contained herein.
You are cautioned not to place undue reliance on the estimates, projections and other forward-looking information in this presentation as
they are based on current expectations and general assumptions and are subject to various risks, uncertainties and other factors that may
cause actual events or results to differ materially from the views, beliefs and estimates expressed herein. Such factors include, but are not
limited to, any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings that may be brought by or against the
Company; the impact of the rebranding initiative on patient admissions, referral source relationships and the Company’s stock price; the
ability to successfully integrate acquisitions; changes in the regulation of the healthcare industry broadly or the inpatient rehabilitation,
home health and hospice areas specifically at either or both of the federal and state levels; competitive pressures in the healthcare industry
broadly or the inpatient rehabilitation, home health and hospice areas specifically and the Company’s response thereto; the ability to
maintain proper local, state and federal licensing where the Company does business; potential disruptions, breaches, or other incidents
affecting the proper operation, availability, or security of the Company’s information systems, including the unauthorized access to or theft of
patient or other sensitive information; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals),
or suspension of reimbursement for the Company’s services by governmental or private payors; general conditions in the economy and
capital markets; and other factors which may be identified from time to time in the Company’s SEC filings and other public announcements,
including its Form 10-K for the year ended December 31, 2016 and Form 10-Q for the quarter ended March 31, 2017.
Forward-Looking Statements
3
is becoming
• HealthSouth Corporation will change its name to Encompass Health Corporation
• Corporate name change and ticker symbol change (from “HLS” to “EHC”) effective January 2, 2018
• Both business segments (inpatient rehabilitation and home health and hospice) to transition to
Encompass Health branding (expected to be complete by year end 2019)
• Rebranding initiative reinforces strategic position as an integrated provider of inpatient and home-
based care
• Estimated rebranding investment of $25 million to $30 million to be incurred between 2017 and 2019
− Approximately $7 million to $10 million expected to be incurred in 2017 ($6 million to $8 million in
operating expenses; $1 million to $2 million in CAPEX)
− Only $1 million included in previously issued guidance
The name change and rebranding initiative reflect the Company’s expanding national
footprint and reinforce the strategy it is pursuing to deliver integrated high-quality,
cost-effective care across the post-acute continuum.
The decision to rebrand as Encompass Health Corporation resulted from a
yearlong, research-intensive project and is intended to raise awareness of the
Company’s strategy and value proposition.
4
New Brand Logo and Visual Identity Will Begin Rolling
Out in 2018
Sample applications
5
Both Business Segments Benefit from a Demographic
Tailwind: Expanding Medicare Beneficiary Population
Key Observations:
• The growth rate of Medicare beneficiaries
increased in 2011 to an approx. 3% CAGR
as “baby boomers” started turning 65.
• In 2030, the Medicare population is projected
to increase to 81 million beneficiaries from
55 million beneficiaries today.
Source: www.census.gov/population/projections/files/summary/NP2014-T9.xls; Center for Medicare &
Medicaid Services, Medicare Trustees Report - June 2016 - pages 186, 191
Average Age of the Company’s Patients
IRF Home Health
< 65 years 30% 15%
65 to 69 years 13% 11%
70 to 74 years 13% 13%
75 to 79 years 14% 14%
80 to 84 years 13% 16%
85 to 89 years 11% 16%
> 90 years 6% 15%
6
CMS Continues to Drive Change Towards Integrated Delivery
Payment Models, Value-Based Purchasing, and Site Neutrality
Future Post-Acute Providers (Timing?)
Inpatient Rehabilitation Facilities
• Full range: low acuity high acuity
• 24/7 nursing coverage
• Eliminates payment silos
Home-Based Post-Acute Services
• More care in the home
(lowest cost setting)
• Differentiator: Ability to care for high-acuity,
poly-chronic patients
>> 50% of Medicare fee-for-service
payments via integrated delivery
payment models
>> 90% of Medicare fee-for-service
payments tied to quality/value
Integrated Delivery
Payment Models
Value-Based
Payments
Site Neutrality
Current Post-Acute Providers
• Medicare payments/regulations will be
outcome focused.
• Many existing regulations will become
obsolete.
Facility-Based Post Acute Services
>> 30% of Medicare fee-for-service
payments via integrated delivery
payment models (e.g., bundled
payments; accountable care
organizations (ACOs))
>> 85% of Medicare fee-for-service
payments tied to quality/value (i.e.,
value-based purchasing,
readmissions reduction programs)
2017 2016
Source: Health and Human Services Fact Sheet announcing new reimbursement goals –
January 26, 2015
CMS
Goals
2018 2019
CMS
Goals
Skilled Nursing Facilities
Home Health
Long-Term Acute Care Hospitals
• Medicare payments/regulations are site
specific (e.g., 60% Rule, 3-Hour Rule,
"preponderance" of one-to-one
therapy).
7
Always Available
Sometimes Available
Seldom Available
Therapy
Gym &
Training
Systems for
All PAC
Patients
Staff Trained
for All Acuity
Therapy
Gym &
Training
Systems for
All PAC
Patients
Staff Trained
for All Acuity
Therapy
Gym &
Training
Systems for
All PAC
Patients
Staff Trained
for All Acuity
LTACs IRFs SNFs
Home Health
The Company’s rehabilitation hospitals have the physical construct, clinical
staffing, and operating expertise to “pivot from the center” to address the full
spectrum of inpatient post-acute needs in a site neutral environment.
The Company Is Well-Positioned for the Progression Towards Site Neutrality as It
Will be Able to Treat All Types of Post-Acute Patients by Leveraging Operational
Expertise Across Its Network of Facility-Based and Home-Based Assets
Higher acuity patients will
transition from post-acute
inpatient facilities to Home
Health. Lower acuity
patients will go directly to
Home Health.
Post-Acute Inpatient Spectrum
Higher Acuity Lower Acuity
Progression to Site Neutrality
Post-Acute Inpatient Facilities
P
re
se
nt
Fu
tu
re
8
Clinical collaboration rate between
HealthSouth IRFs and Encompass
Home Health increased by 630 basis
points over Q1 2016
The Company Continues to Make Progress on Improving the
Patient Experience Through Integrated Care Delivery
22.6%
Collaboration Rate
28.9%
Collaboration Rate
HealthSouth IRF Discharges to Non-
Encompass Home Health
HealthSouth IRF Discharges to
Encompass Home Health
Overlap markets are defined as a
HealthSouth IRF located within a 30-mile
radius of an Encompass home health
location.
As of March 31, 2017, 61% of
HealthSouth’s IRFs were located within
overlap markets.
The Company’s clinical
collaboration rate goal for overlap markets
is 35% to 40% within the next three years.
In February 2017, the Company launched a
clinical collaboration TeamWorks initiative.
IRF-Home Health Clinical Collaboration (All Payors)
Overlap Markets