Lafayette General Health Leading with purpose Serving with passion Our Mission To restore, maintain, and improve health Our Vision Be a regional healthcare system that ALWAYS delivers excellence. 1 Disclaimer This presentation that you are about to view is provided as of March 31, 2016 in connection with the Lafayette General Health presentation at the HFMA Capital Conference. It has been prepared for informational purposes only. Certain statements in this presentation are forward looking statements, including those that discuss strategies, goals, outlook or other non historical matters; or revenues, income, returns or other financial measures. These forward looking statements speak only as of the date on which they are made, and Lafayette General Health undertakes no obligation to update or revise any forward looking statements. These forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from this presentation. By viewing this investor presentation you acknowledge that you understand and agree to the provisions of this page. 2 1
Overview of Lafayette General Health System Primary Facilities Lafayette General Medical Center Lafayette, LA 427 licensed beds Founded 1911 St. Martin Hospital Breaux Bridge, LA 25 licensed beds Operated by LGHS since 2009 University Hospital and Clinics Lafayette, LA 116 licensed beds Operated by LGHS since 2013 Lafayette General Surgical Hospital Lafayette, LA 10 licensed beds 50% with Lafayette Surgical, LLC 1 Acadia General Hospital Crowley, LA 140 licensed beds Operated by LGHS since June 2014 Abrom Kaplan Memorial Hospital Kaplan, LA 35 licensed beds Operated by LGHS since June 2015 3 Lafayette General Southwest Lafayette, LA 128 licensed beds Operated by LGHS since Nov. 2015 3 Overview of Lafayette General Health System Strong Regional Presence Owned/Managed Facilities Lafayette General Medical Center Lafayette Lafayette General Southwest Lafayette University Hospital & Clinics Lafayette Lafayette General Surgical Hospital Lafayette Acadia General Hospital Crowley St. Martin Hospital Breaux Bridge Abrom Kaplan Memorial Hospital Kaplan Clinical Affiliates Abbeville General Hospital Abbeville Bunkie General Hospital Bunkie Franklin Foundation Hospital Franklin Opelousas General Health System Opelousas (Collaboration Agreement) Savoy Medical Center Mamou Iberia Medical Center New Iberia 4 4 2
LGH Corporate Organization LGHS was incorporated in 2011 as part of a corporate reorganization to facilitate greater efficiencies in the administration of the System and provides administrative and operational support services for the System s health care facilities and providers. Lafayette General Medical Center Lafayette General Southwest Lafayette Health Ventures, dba Lafayette General MD Acadiana Radiation Therapy Acadia General Hospital Lafayette Investment Group Lafayette General Health System University Hospital & Clinics Lafayette General Endoscopy Kaplan General Hospital, dba Abrom Kaplan Memorial Hospital Lafayette General Surgical Hospital St. Martin Hospital Oil Center Surgical Plaza Greater Lafayette PHO/Acadian Healthcare Alliance Lafayette General Foundation Healthcare Innovation Fund 5 PAST RECENT RENOVATION PRESENT 6 3
7 Overview of Lafayette General Health System Awards and Honors Lafayette General Health System Partnership with Ochsner Health System (2015) Best Places to Work in Information Technology (2015) #4 in Best Large Hospital IT Departments by Healthcare IT News (2015) Awarded 2014 MAP Award for performance improvement in revenue cycle by HFMA Lafayette General Medical Center The Louisiana Performance Excellence Award by Louisiana Quality Foundation (2015) America s Best Hospitals for Patient Safety, Obstetrics, Orthopedics, and Cancer Care by Women s Choice Awards (2015) Excellence in Patient Care award from Studer Group (2014) Consumer Choice Award by National Research Corporation (2005 2015) A 5 star rated HCAHPS hospital on hospitalcompare.gov St. Martin Hospital Best Place to Work In Healthcare by Modern Healthcare (2014 & 2015) Abrom Kaplan Memorial Hospital Top 20 Critical Access Hospital in Financial Stability by the National Rural Health Association (2015) University Hospital & Clinics Quality Respiratory Care Recognition (2015) A 4 star rated HCAHPS hospital on hospitalcompare.gov Overview of Lafayette General Health System Awards and Honors Guardian of Excellence Awards from Press Ganey: (Winners achieve this distinction by reaching the 95 th percentile for each reporting period for the award year.) LGMC patient experience for inpatient care & HCAHPS LGMC patient experience for medical practice SMH patient experience for the emergency room & patient experience for outpatient services Pinnacle of Excellence Awards from Press Ganey: (Winners achieve this distinction by maintaining consistently high levels of excellence as a top performing organization on the basis of extraordinary achievement.) LGMC patient experience for inpatient care LGSH patient experience for the ambulatory services Three LGH Facilities: Lafayette General Medical Center, Lafayette General Surgical Hospital, and Opelousas General Health System recognized among the nation s Most Wired (LGMC has been recognized since 2012) Employee engagement scores for all entities at or above 89 th percentile LGMC & AGH physician engagement scores are greater than 90 th percentile 8 4
Overview of Lafayette General Health System LGH/LSU/State Partnership Effective June 24, 2013 On June 23, 2013, Lafayette General Health (LGH) assumed responsibilities through a lease arrangement with LSU for the management and operation of LSU University Medical Center. LGH s primary goal in this partnership is to keep UHC open and over time, strengthen and expand all services offered at the UHC campus. This partnership preserved and expanded GME in Acadiana from 65 to 85 residents. Financing for the transaction including Disproportionate Share (DSH) reimbursement, Medicaid reimbursement, and supplemental payments through Upper Payment Limit funding. LGMC achieved major teaching hospital status July 1, 2013. 9 Overview of Lafayette General Health System Expansion of Services Operating Room Suites and Emergency Room Addition (August 2014) $53 million, 131,000 square foot addition to LGMC Expansion added 18,000 square feet to the emergency department, a new 12 room surgery platform, a new central sterile processing department, and a new six story parking garage CIS at Lafayette General Medical Center (April 2011) Partnership developed with Cardiovascular Institute of the South CIS manages four state of the art cath labs at LGMC Cancer Center of Acadiana (March 2010) Developed by LGMC through the purchase of the practices of five area medical oncologists LGMC Patient Tower Expansion (January 2010) $70 million renovation on the main and west patient towers at LGMC Pavilion for Women and Children (May 2008) $20 million, 32,000 square feet addition to LGMC and includes creation of a separate entrance, larger patient rooms and expansion of the neonatal intensive care unit Houses 12 labor and deliver rooms; 24 mother/baby beds, and 25 NICU beds 10 5
Overview of Lafayette Louisiana Fastest growing workforce in state, despite temporary downturn in oil industry - Diversified economy, only 45% oil vs. 75% 5 years ago Oil jobs lost replaced by retail, service and high tech (Costco, Stuller, Bell Helicopter, CGI, Enquero, Perficient, and CSE ICON) Approximately $6.4 billion in retail sales in 2014 Hub City Health Care Center of the 10 parish Acadiana region 11 Overview of Lafayette General Health System Service Area LGHS s service area consists of a 10 parish area in the south central region of Louisiana known as Acadiana, midway between New Orleans and Houston, along the Interstate 10 corridor. LGMCs primary service area is composed of Lafayette Parish, which consists of 270 square miles. The population of Lafayette Parish was 235,644 in 2014. The primary service area accounted for 55.3% of the inpatient discharges of LGMC for FY 2014. The secondary service area of LGMC includes the five neighboring parishes of Acadia, Iberia, St. Landry, St. Martin and Vermilion, which accounted for approximately 38% of LGMC s inpatient discharges for the fiscal year ended September 30, 2014. LGHS Service Area: Acadiana Region 12 6
Overview of Lafayette General Health System Physicians/Medical Staff As of September 30, 2015, 705 physicians, dentists, podiatrists, and psychologists were on the Obligated Group s Medical Staff. Of these, 462 were on the Active Staff In addition, the Medical Staff had 204 individuals designated as Advanced Dependent Practitioners As September 30, 2015, the average age of the Active Medical Staff was 50 years, and 80% of Active Medical Staff members were board certified Top 10 Admitting Physicians as of 9/30/2015 BOARD NUMBER OF SPECIALTY AGE CERTIFIED DISCHARGES* Internal Medicine 32 No 1,082 Psychiatry 38 Yes 686 Internal Medicine 28 No 560 Internal Medicine 51 No 466 Psychiatry 61 Yes 442 Pediatrics 35 Yes 409 Internal Medicine 34 Yes 401 Internal Medicine 42 No 387 Internal Medicine 43 Yes 387 Internal Medicine 54 No 373 All Other 16,002 TOTAL 21,195 *Excludes Nursery Bassinets 13 Source: Medical Center Records 375,000 LGMC NET PATIENT REVENUE FYE 1997 2014 Intensivists CV Surgery 325,000 275,000 LHVI Clinics CCA 225,000 175,000 125,000 75,000 LGMD Ortho Surgery Surgicalists Neurology 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 14 7
Overview of Lafayette General Health System Market Position There are currently 23 additional acute care hospitals located in the Obligated Group s service area. The System s primary competitors are Our Lady of Lourdes Regional Medical Center, the Heart Hospital of Lafayette, Park Place Surgical Hospital, Women s and Children s Hospital, and Lafayette Surgicare (1) Source: Louisiana Health Information Network (via Truven Health) and LHIN State Inpatient Data (2) Timeline: Calendar Years 2012 2014, and the first quarter (January March) of 2015. 15 Aligned Goals Aligned Behaviors Aligned Processes 16 8
People Service Quality Pillar Progress Start of J2E (2009) EMPLOYEE Satisfaction 38 th percentile INPT 38 th percentile ED 15 th percentile OUTPT n/a Amb Surg n/a Physician Sat n/a 14 of 25 Indicators at National Average Progress (most recent) 87 th percentile INPT 99 th percentile ED 96 th percentile Outpatient 78 th percentile Amb Surg 96 th percentile Physician 24 th -> 68th 28/35 Indicators Nat l Benchmark Finance -0.4% LGMC=14.8% LGH= 4.5% (end of FY14) 17 2 Hospitals 6 Hospitals, 1 Collaboration Growth 60 Employed Physician Practices & 6 Clinical Affiliates Lafayette General Medical Center Employee Satisfaction 18 9
LGMC Inpatient Satisfaction Results Since Beginning J2E Percentile Rank Source: Press Ganey Inpatient Satisfaction Report Large PG Database 19 LGMC HCAHPS Overall Rating of Care Recommit to Internal Customer Rounding Revised Support Card Large Press Ganey Data Base Percentile Rank Reported by FYTD 20 10
Overview of Lafayette General Health System Strategic Business Objectives Achieve greater physician alignment Become the leading provider in population health management Achieve national top decile ranking in patient experience, employee and physician engagement Achieve 100% score in quality outcomes Develop a real estate capacity strategy Grow/evolve medical education program Develop an information technology system strategy Develop a consolidated system financial strategy 21 People 20% FY 2016 LGH System Goals Service 20% Quality 20% Funding Our Future 30% Growth 10% 1 st Year Turnover Outpatient Satisfaction Quality Measures Operating Margin Net Revenue over FY15 Employee Engagement ED Patient Satisfaction CAHPS Domains Days Cash on Hand Ambulatory Surgery Satisfaction Physician Engagement 22 22 11
VBPerformance for Leaders & Staff Our Work + My Work + My Values = SEM Score (30%) + (50%) + (20%) = 100% 23 Overview of Lafayette General Health System Strategic Clinical Objectives LGMC Level II Trauma Center Hospitalists Programs at AGH and AKMH RN Residency Program Increased Clinic Hours at UHC for Internal Medicine and Orthopedics staffed by Nurse Practitioners OB Beds and NICU expansion 11 new physicians at LGMD in existing and new practices, including Plastics Ochsner Partnership Developed post acute home care affiliated network 24 12
Financial Overview System Financial Profile Total operating revenues increased from $495.5 million during FY2014 to $585.0 million during FY2015 Balance sheet continues to strengthen with unrestricted net assets having increased from $247.7 million in FY2014 to $297.7 million in FY2015 (20.2% increase) Total cash available increased from $135.1 million to 154.9 million in FY2015 (14.7%) During the past three years, the System has seen substantial growth in the number of hospitals that make up the System University Hospitals and Clinics was acquired in 2013, Acadia General Hospital was acquired in 2014 and, most recently in November 2015, LGMC acquired the assets of RMCA and converted it to its newest campus, Lafayette General Southwest Key Statistics ($000s) FY 2015 Total Operating Revenues $585,119 Operating Cash Flow Margin 8.5% Operating Margin 3.4% Unrestricted Net Assets 297,625 Days Cash on Hand 104 25 Source: 2014 FY Audit Financials & 2015 FY Audited Financials Overview of Lafayette General Health System Historical Utilization (System) Inpatient Discharges Emergency Room Visits 30,000 25,000 20,000 15,000 10,000 5,000 0 25,242 19,318 16,669 200,000 150,000 100,000 50,000 0 145,821 126,027 80,287 Outpatient Surgeries Average Daily Census 8,000 6,000 4,879 7,134 400 300 241 300 335 4,000 2,000 1,820 200 100 0 0 26 Source: Medical Center Records 13
Financial Overview System Financial Statistics Total Operating Revenue Operating Cash Flow Margin $800,000 $600,000 $400,000 $200,000 $364,062 $495,503 $585,119 15.0% 10.0% 5.0% 12.1% 9.0% 8.5% $0 0.0% Operating Margin 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 5.2% 3.9% 3.2% 27 Source: 2014 FY Audit Financials & 2015 FY Audited Financials Financial Overview System Financial Statistics (Continued) Unrestricted Net Assets Maximum Annual Debt Service Coverage (x) 400,000 300,000 200,000 100,000 0 297,625 220,480 247,761 4.0 3.0 2.0 1.0 0.0 3.5 3.3 3.1 Pro Forma Days Cash On Hand 200 150 100 50 157 108 104 0 Source: 2014 FY Audit Financials & 2015 FY Audited Financials 28 14
Lafayette General Health Net Patient Revenue Growth FY 2010 FY 2015 Net = 175% increase Growth in Millions 29 *NPR before provision for bad debts Lafayette General Health Summary Integrated healthcare system with six hospitals, nine professional centers and several physician clinics Leading and growing market share in demographically favorable service area Strategic relationships with physicians has led to improved alignment across the organization Increased capacity, leading to strong growth in revenue and utilization History of stable earnings and cash flow metrics Diversified and active governance at the Board level LGH is well positioned to continue to be the market leader in the region. 30 15
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