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8-K - 8-K - Change Healthcare Inc.d920063d8k.htm

Exhibit 99.1 Change Has Reacted Proactively to COVID-19 COVID-19 Impact Actions To Date • Overall decline in healthcare utilization observed • Employees health first: moved 100% North American and throughout the US 85% offshore to WFM, balance to be migrated by end of April • Depressed elective procedure volumes impacting all major • Launched several cost / automation initiatives healthcare end markets and Change’s clients • Initiated hiring freeze in mid-March with only minor exceptions for critical roles and actively reducing • New Provider sales expected to be delayed and some contractors and employees to match resources with implementations will be postponed demand levels • Leveraging economic conditions to strengthen capital • Despite temporary decline, expect healthcare utilization to structure. Executed on $1B in fixed-rate swaps thru March recapture significant portion of delayed procedures over 31, 2024. Now 70% of our debt fixed the balance of 2020 • New initiatives - Telehealth Accelerator and HDx provide added opportunity Segment Overview Technology Software & Network Enabled Analytics Solutions Services 80% of business subscription Business Indexed to Healthcare Primarily Contingency Based based and recurring in nature Utilization © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 19 Exhibit 99.1 Change Has Reacted Proactively to COVID-19 COVID-19 Impact Actions To Date • Overall decline in healthcare utilization observed • Employees health first: moved 100% North American and throughout the US 85% offshore to WFM, balance to be migrated by end of April • Depressed elective procedure volumes impacting all major • Launched several cost / automation initiatives healthcare end markets and Change’s clients • Initiated hiring freeze in mid-March with only minor exceptions for critical roles and actively reducing • New Provider sales expected to be delayed and some contractors and employees to match resources with implementations will be postponed demand levels • Leveraging economic conditions to strengthen capital • Despite temporary decline, expect healthcare utilization to structure. Executed on $1B in fixed-rate swaps thru March recapture significant portion of delayed procedures over 31, 2024. Now 70% of our debt fixed the balance of 2020 • New initiatives - Telehealth Accelerator and HDx provide added opportunity Segment Overview Technology Software & Network Enabled Analytics Solutions Services 80% of business subscription Business Indexed to Healthcare Primarily Contingency Based based and recurring in nature Utilization © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 19


Change’s Businesses are Resilient and Durable Software & Analytics Network Solutions Tech Enabled Services (50.7% of LTM Revenue) (18.2% of LTM Revenue) (31.1% of LTM Revenue) • ~ 75% SAAS / Perpetual Licenses / PMPM • Majority of the business indexed to the • 60% of Revenue is in RCM Services utilization or volume of healthcare business which is contingency based • Highly recurring in nature – activity largely insulated from • ~70% physician side and ~30% COVID-19 hospital side • ~25% business is PMPM & subscription Business based and ~75% is volume based • Remaining ~40% of business is currently • ~25% Non SAAS Model stable, primarily driven by PBA, • Payment Accuracy paid based Consulting, VBC, and Communications on recovery of inappropriate and Payment Services (CPS) payments • Imaging One-Time software based on install or sale • Payor member outreach and Coding reviews based on enrollment or completion • Short term impact predominantly due • Temporary decline in network • Majority of impact will be in RCM to: transactions of 25-35% Services due to the discontinuation of • Delayed installations and new elective procedures • PMPM business and volume floors (~1/3 sales due to client readiness or • Additional impact expected in contracts) provide support priorities CPS due to lower utilization as • Opportunity for regional networks • Government grace periods well looking to migrate to Change could deadlines may result in delays or • Revenue opportunities for patient Outlook increase volumes cancelled projects access capabilities and telehealth • Acceleration of initiatives to drive revenue generation from provider network traffic and growing opportunity clients in telehealth • Cost control levers due to highest variable cost base, as well as automation & productivity initiatives Note: LTM revenue represents reported GAAP revenue in Q4 FY19 and Q1-Q3 FY20; excludes Corporate Eliminations © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 20 Change’s Businesses are Resilient and Durable Software & Analytics Network Solutions Tech Enabled Services (50.7% of LTM Revenue) (18.2% of LTM Revenue) (31.1% of LTM Revenue) • ~ 75% SAAS / Perpetual Licenses / PMPM • Majority of the business indexed to the • 60% of Revenue is in RCM Services utilization or volume of healthcare business which is contingency based • Highly recurring in nature – activity largely insulated from • ~70% physician side and ~30% COVID-19 hospital side • ~25% business is PMPM & subscription Business based and ~75% is volume based • Remaining ~40% of business is currently • ~25% Non SAAS Model stable, primarily driven by PBA, • Payment Accuracy paid based Consulting, VBC, and Communications on recovery of inappropriate and Payment Services (CPS) payments • Imaging One-Time software based on install or sale • Payor member outreach and Coding reviews based on enrollment or completion • Short term impact predominantly due • Temporary decline in network • Majority of impact will be in RCM to: transactions of 25-35% Services due to the discontinuation of • Delayed installations and new elective procedures • PMPM business and volume floors (~1/3 sales due to client readiness or • Additional impact expected in contracts) provide support priorities CPS due to lower utilization as • Opportunity for regional networks • Government grace periods well looking to migrate to Change could deadlines may result in delays or • Revenue opportunities for patient Outlook increase volumes cancelled projects access capabilities and telehealth • Acceleration of initiatives to drive revenue generation from provider network traffic and growing opportunity clients in telehealth • Cost control levers due to highest variable cost base, as well as automation & productivity initiatives Note: LTM revenue represents reported GAAP revenue in Q4 FY19 and Q1-Q3 FY20; excludes Corporate Eliminations © 2020 Change Healthcare LLC and/or one of its subsidiaries. All Rights Reserved. 20