Memorial Hermann Health System
31st Annual J.P. Morgan Healthcare Conference
January 7, 2013
Daniel J. Wolterman
President & CEO
Dennis L. Laraway
Chief Financial Officer
System and Strategic
Overview
Highlights
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Market Share Leader in Houston
Superior Regional Coverage
Operating Cash Flow Generation
Effective Cost Management – Best Practice
Improved Liquidity and Leverage Positions
Well Positioned for Accountable Care and Population
Management
• Quality – Competitive Advantage for Memorial Hermann
• National Recognition – Significant Accomplishments as a
Provider of Excellence
3
The Market Leader
$4.5B Total Assets
$3.9B Net Operating Revenue
Over 20,000 Employees; 5,000 Medical Staff
171 Locations
Market Share Ranking
Inpatient Market Share
1st: Aggregate Market Share
2% 2%
1st: Burns
3%
1st: Cardiology
1st: ENT
3%
1st: General Medicine
4%
23%
1st: General Surgery
4%
Memorial
1st: Neurology
1st: Neurosurgery
Hermann
1st: Ophthalmology
6%
1st: Orthopedics
1st: Rehab
6%
1st: Thoracic Surgery
HCA
1st: Urology
1st: Vascular
19%
6%
2nd: Gynecology
2nd: Obstetrics
St. Luke’s
2nd: Neonatology
Methodist
9%
2nd: Spine
13%
3rd: Oncology
Greater Houston MSA 6.14 million population, projected to 6.71 million (2016)
4
Recent Accolades
15 Top Health Systems;
Top 5 Large Health Systems
Texas Health Care
Quality Improvement
Awards (9 Memorial
Hermann Campuses)
America’s #1 Quality
Hospital in Overall Care
2 Consecutive Years
Healthcare’s “100
Most Wired” 7th
consecutive year
TIRR Memorial
Hermann Ranked # 3
by U.S. News and
World Report
Texas Hospital
Association Bill Aston
Quality Award
HealthGrades®
 America’s 50 Best Hospitals
(2010, 2011 & 2012)
 Distinguished
Hospital for Clinical
Excellence
Houston Business
Journal (HBJ) No. 5
Best Places to Work
5
Industry Transformation
Integration
Fixed Payment
Bundled Payment
Population Health
Value Incentive
Integration
Fee For
Service
Population
Health
Current Model
Fee-for-Service
Disparate Payments
Illness & Cure
Volume Incentive
Fragmentation
New Model
Fragmentation
6
New Vision
Our Strategic Journey
Memorial Hermann will be the preeminent health system in
the U.S. by advancing the health of those we serve
through trusted partnerships with physicians, employees
and others to deliver the best possible health solutions
while relentlessly pursuing quality and value.
7
Advancing Health
Care Delivery: Indispensible market leader in health delivery
Texas Medical Center
• Primary teaching hospital for The University of
Texas Medical School at Houston
• Children’s Memorial Hermann Hospital
• TIRR Memorial Hermann
• Memorial Hermann Heart & Vascular Institute –
Texas Medical Center
• Mischer Neuroscience Institute
• MH Ironman Sports Medicine Institute
• Memorial Hermann Clinical Innovation & Research
Center
• Nation’s Busiest Level 1 Trauma Center with 7,000
cases/year and 3,500 Life Flight transports/year
Community Hospital Portfolio
•
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The Woodlands Hospital
Northwest Hospital
Southwest Hospital
Southeast Hospital
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Memorial City Medical Center
Sugar Land Hospital
Katy Hospital
Northeast Hospital
Ambulatory Portfolio
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Sports Medicine & Rehabilitation Centers: 30
Ambulatory Surgery Centers: 18
Diagnostic Laboratories: 21
Imaging Centers: 24
Breast Care Centers: 9
24 Hour Free Standing ER: 1
Retirement/Nursing Center: 1
Home Health Branches: 3
Cancer Centers: 7
8
Advancing Health
Physicians: Pluralistic approach to physician alignment
MHMD
• 3,500 physicians members
• 2,900 Clinically Integrated (C.I.) physicians
• Unites private practice, academic faculty, and
employed physicians
• Clinical Programs Committees linked to
System Quality Committee
• Foundation for Memorial Hermann Accountable
Care Organization
University of Texas Medical
School, Houston
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•
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1,066 Faculty Members
24 Departments
871 Residents and Fellows
1,017 Medical Students
1 Million Annual Clinical Encounters
Memorial Hermann
Medical Group
• 501(a)
• 250 Employed Providers
• Primary care and specialists
Clinical Integration Principles
• Create order sets, protocols, and
performance standards
• Connect systems and share data
• Report and manage quality outcomes
9
Advancing Health
Health Solutions: Value-added health plans & employer solutions
ACO
• New subsidiary of MHHS
• Formed to meet the intent
of both Commercial and
Medicare ACO principles
• CMS Shared Savings
Program – July 1, 2012
MHiE
MHealth
•
•
•
•
Self-insured / TPA Services
Fully-insured license
Employer-based contracting
Member Cost Share / Incentives to
encourage engagement in their health
• Narrow Network of Highest Quality
• Competitive Provider Contracts built
with Integral Pay for Performance
structures
• Planning for Medicare Advantage.
Notification of Intent submitted to CMS.
Facilitates access to and retrieval of clinical
data to provide safer, more timely, efficient,
effective, patient-centered care by providing
the capability to electronically share clinical
information among disparate health care
information systems in a useful manner.
10
One Memorial Hermann
11
One Memorial Hermann
Information Technology Key To Advancing Health
Diagnostic
Physician
Office
Hospital
Imaging
Surgery
Center
Post Acute Home Health
Aligned Incentives
& Benefit Structure
“Design &
Optimize”
Population
Analytics
“Measure & Score”
Individual Health
Plan
“Personalize &
Coordinate”
Enterprise
Data
Warehouse
Operational &
Clinical
Performance
“Store & Report”
12
High Reliability Organization
Board System Adult ICU CLABSI
Do No Harm
Central Line Associated Blood Stream Infections
12
CLABSI Rate per 1K Line Days
10
UCL = 9.42
8
6
UCL = 5.79
Mean = 5.53
UCL = 5.13
UCL = 3.86
4
UCL = 2.97
UCL = 2.55
Mean = 3.04
Mean = 2.52
2
Mean = 2.12
LCL = 1.64
Mean = 1.46
Mean = 1.17
LCL = 0.38
LCL = 0.29
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0
2006
Generated: 10/15/2012 1:12:32 PM
Source f ile date: 10/15/2012
2007
2008
2009
2010
2011
2012
Reporting Months
produc e d by S y s t e m Q ua lit y a nd P a t ie nt
13
Revenue & Quality
Value Based Purchasing & Meaningful Use
Information Technology and Quality
Management programs on target to avoid CMS
penalties, while maximizing reimbursement
$27M
9%
$17.5M
7%
$11.5M
6%
1.0%
4%
2%
1%
0%
$10M
$6M
3.0%
2.8%
1.4%
0.7%
5%
$10
1.0%
3.0%
1.0%
3.0%
2.0%
I n Millions
8%
3%
Value Based Purchasing: Estimated $4.5M net gain
over 5 years. HCAHPS greatest opportunity for
improvement.
$5
$4.9
$3.7
$0.4
$0
$2.3
FY13
($5)
($3.3)
1.0%
1.0%
2013
VBP
1.25%
2014
Readmissions
1.5%
1.75%
2.0%
2015
2016
2017
Hosp. Acquired Conditions
$0.8
($10)
Withheld
FY15
Returned
FY16
($5.8)
Net Gain
$1.3
$1.1
$0.9
($5.0)
$4.1
$3.6
$3.1
$2.5
FY14
($4.1)
$7.9
$6.9
$5.9
Unearned
FY17
($6.6)
Meaningful Use of EHR
Meaningful Use Stage 1 & Stage 2 Attestation January 2012
Received $10.1M to date in Texas
Medicaid funding
Stage I Readiness
Received $12.9M in Medicare funding
FY12
Hospital Objectives (Stage 1)
Meaningful Use Criteria Compliance
Legend:
Meets criteria
Requires attention
MC TMC KY NE NW SE SW SL TW
Meaningful Use Stage 2 requirements
underway; targeting 2014 adoption
$54.6M expected over next 4 years from
both Medicare and Medicaid
14
Accountable Care
Gr Houston >11,000
•
•
•
Clinically Integrated IPA
Pluralistic approach to physician / MHHS
alignment
Exclusive Contracting DOJ/FTC Protections
MHHS/MHMD Payor Contracting
Payor
Comm.
M/A
Humana


United Healthcare


Blue Cross


Aetna


MHealth

Notice
of Intent
MHMD 3,500
CI 2,900
ACO 2,700
PCMH 185
CMS Shared Savings
• July 1, 2012 start
• 22,000 attributed beneficiaries
• Patient Centered Medical Home
(PCMH)
15
Texas Medicaid
• Massive statewide restructuring of Medicaid
through 1115 Waiver
• Year 2 of implementation
• Memorial Hermann has reached agreement
with RHP3 anchor (Harris Health)
• Supplemental Funding – expected to continue
at historical levels
16
Greater Houston Area and
Market Position
Growth of Houston
Population by Age
* The total population of the Expanded Greater
Houston MSA is projected to reach 6.8 million by
35.0%
the year 2017. That represents growth of 568,846
people from 2012 (9.1% increase).
30.0%
28.6%
7,000,000
25.7%
25.0%
6,000,000
20.0%
5,000,000
15.0%
4,000,000
3,000,000
10.0%
2,000,000
8.1%
5.0%
1,000,000
4.2%
3.1%
2.5%
0
1980
1990
2000
2010
*2012
*2017
Source: Truven, formerly Thomson Reuters Medstat, 2011-2016
Note: Population number for 1980, 1990 and 2000 was based on Greater Houston
MSA: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, Waller
Expanded Greater Houston MSA includes: Austin, Brazoria, Chambers, Fort Bend,
Galveston, Harris, Liberty, Montgomery, San Jacinto, Waller, Walker and Wharton
0.0%
Children 0Young Adults 35-54 Older Adults Seniors 65- Females 1517
Adults 18-34
55-64
plus
44
2012
2017
Growth Rate
18
Geographic Coverage
Approximately 82% of the
Expanded Greater
Houston MSA population
lives within the primary
service area of at least
one Memorial Hermann
campus.
19
Volume Forecast Summary
Projected
2017
Actual 2012
Population
6,263,956
•
Market Admissions projected to decrease
3% as a result of 9% population growth
and 11% Use Rate decline
•
MH Admissions projected to increase 3%
through increasing market share, despite
the Use Rate decline
% Change
6,832,802
9%
Total Inpatient Market Share
Use Rates
Market Admissions
87
542,847
77
528,961
-11%
-3%
24.5%
24.0%
23.5%
MH Market Share
MH Admissions (Total)
22.9%
24.2%
6%
129,469
133,511
3%
24.2%
23.4%
23.6%
22.9%
23.0%
22.5%
22.0%
2010
2011
2012
2017
20
Financial Performance
Governance Transformation
Financial Consolidation and Obligated Group
Final Governance Structure (Effective January 1, 2013)
Corporate
Members
Memorial Hermann
Health System
Memorial Hermann
Foundation
Health Professionals
Insurance Company
(HePIC)
Memorial Hermann
Medical Group
Memorial Hermann
Physician Network
(MHMD)
MH Accountable
Care Organization
Legend:
MHealth, Inc.
MHealth Insurance
Company
Part of the Obligated Group
22
Patient Volumes
Growth/Volumes
Managed Care
Operating Income &
Cash Flow
Cost Control
Inpatient Admissions (excluding OB)
150,000
90,000
140,919
140,000
130,000
Liquidity
Leverage
Q1 FY 2013
138,351
133,846
78,563
80,000
135,347
134,064
135,099
79,275
70,000
61,355
120,000
112,793
110,000
108,436
107,403
100,000
68,354
60,000
108,712
109,077
108,348
46,831
50,000
55,542
40,000
Inpatient Admissions
90,000
Balance Sheet
Position
OP Surgery Cases
30,000
80,000
FY 2007
FY 2008
FY 2009
FY 2010 FY 2011
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
FY 2012
Adjusted Admissions
Diagnostic & Therapeutic Visits
300,000
1,000,000
248,348
260,000
233,622
861,922
960,736
778,978
800,000
810,733
256,175
220,000
194,737
236,843
218,016
600,000
484,579 586,106
180,000
400,000
140,000
100,000
200,000
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
23
Outpatient Revenues
Growth/Volumes
OP Revenue % by Fiscal Year
Managed Care
100%
Operating Income &
Cash Flow
Cost Control
90%
80%
70%
64.6%
59.2%
60%
Balance Sheet
Position
Liquidity
Leverage
57.0%
50%
40%
35.4%
54.5%
43.0%
40.8%
45.5%
52.3%
47.7%
30%
20%
Q1 FY 2013
10%
0%
2008
2009
2010
IP %
2011
2012
OP %
24
Ambulatory Care and Retail
Operations Continue to Grow
Growth/Volumes
Managed Care
Operating Income &
Cash Flow
Ambulatory Care / Retail Operations – Select Areas
OPID's ($000's)
FY2010
FY2011
FY2012
$ 138,818 $ 136,345 $ 147,737
32.1%
33.1%
38.6%
339,054
341,141
359,703
23
24
24
NOR
Cash Flow Margin
D&T Visits
Sites
Cost Control
Balance Sheet
Position
Liquidity
Leverage
Q1 FY 2013
SM&R's ($000's)
FY2010
FY2011
FY2012
$ 33,228 $ 40,196 $ 52,285
26.7%
29.8%
34.8%
35,882
43,716
52,042
24
26
30
NOR
Cash Flow Margin
D&T Visits
Sites
ASC's (JVIII & IV) ($000's)
NOR
Cash Flow Margin
OP Surgeries
Sites
OPID
Outpatient Imaging
Division
FY2010
FY2011
FY2012
$ 114,969 $ 140,710 $ 154,666
29.5%
30.3%
32.0%
32,397
41,444
44,493
11
15
18
SM&R
Sports Medicine &
Rehabilitation
ASC
Ambulatory Surgery
Centers
25
Case Mix Index for all Hospitals
Growth/Volumes
Total CMI
Benchmarked against Median Teaching Hospitals
COTH Report – Memorial Hermann TMC
Medicare (only) CMI
2.20
1.80
Managed Care
2.00
Operating Income &
Cash Flow
1.95
1.60
1.95
1.87
1.87
1.82
1.80
Q1 FY 2013
1.94
1.95
1.97
1.63
1.66
1.68
1.60
1.60
Cost Control
Liquidity
Leverage
1.85
1.86
1.40
Balance Sheet
Position
1.85
1.79
1.62
1.60
1.62
Q1
10
Q2
10
1.64
1.63
1.63
1.63
Q4
10
Q1
11
Q2 Q3 Q4 Q1 Q2 Q3
11
11
11
12
12
12
Median Teaching Hospital
1.63
1.40
1.20
1.20
Q4
09
1.00
2008
2009
2010
2011
2012
Q3
10
TMC
75th Percentile Teaching Hospital
25th Percentile Teaching Hospital
Tertiary/Quaternary Cases
FY12
FY13 Ann'd
Transplants
70
125
Burn Center
412
500
Open Heart
1,050
1,150
Trauma - TMC
6,700
7,200
26
Payor Mix for all Hospitals
Growth/Volumes
Payor Mix – 5 yr. Trend
Managed Care
45%
Operating Income &
Cash Flow
40%
Cost Control
Balance Sheet
Position
Liquidity
Leverage
Q1 FY 2013
35%
30%
Managed Care
Medicare
25%
Medicaid
20%
Self Pay
15%
Other
10%
5%
0%
2008
2009
2010
2011
2012
27
Managed Care
Commercial Payor Mix
Growth/Volumes
Managed Care Contracts % of Net Revenue FY 2011
Managed Care
Operating Income &
Cash Flow
Aetna
12.2%
Blue Cross
21.0%
Cigna
Humana
20.2%
United
Cost Control
Balance Sheet
Position
Liquidity
Leverage
Other
1.9%
34.3%
10.4%
Managed Care Contracts % of Net Revenue FY 2012
10.9%
FY 2011-$1.35B Net Revenue
19.9%
Aetna
Blue Cross
Q1 FY 2013
19.1%
Cigna
Humana
2.4%
34.5%
13.2%
FY 2012-$1.47B Net Revenue
United
Other
28
Strong Operating Performance
Sustained Cash Flow Generation
Growth/Volumes
•
Managed Care
•
Operating Income &
Cash Flow
Cost Control
Balance Sheet
Position
Liquidity
Leverage
Fiscal Year 2012 operating income before extraordinary items of
$171.3 million
12 consecutive years of solid operating performance with results at
or above budget each year
Operating EBIDA
Operating Income
$ In Mil.
$ In Mil.
7%
180
16%
450
160
14%
6%
400
140
5%
120
4%
100
12%
350
10%
300
250
80
3%
60
Q1 FY 2013
500
2%
40
8%
200
6%
150
4%
100
1%
20
0%
0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Operating Income
Operating Margin
2%
50
0%
0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Operating EBIDA
EBIDA Margin
29
Cost Control
Labor and Supply Costs
Growth/Volumes
Labor Costs as % NOR
Managed Care
Operating Income &
Cash Flow
Cost Control
Balance Sheet
Position
Liquidity
Leverage
Q1 FY 2013
50.0%
45.0%
42.0%
41.5%
41.0%
40.0%
VHA PharmaLYNX 2012 Review
Rx Cost Index:
Best in Class
10.5
Subscriber Avg.
16.4
Memorial Hermann
10.5
38.6%
36.5%
35.0%
30.0%
25.0%
Supply Costs as % NOR
20.0%
2008
2009
2010
2011
2012
20.0%
17.5%
System-wide cost reduction
initiative started in 2011,
targeting $161 million reduction
over 24-months. Fully
implemented
15.6%
15.2%
15.2%
2009
2010
15.0%
14.5%
13.6%
12.5%
10.0%
7.5%
5.0%
2008
2011
2012
30
Balance Sheet
Liquidity
Growth/Volumes
Cash and Investments
Days Cash
$ in Mil.
Managed Care
Operating Income &
Cash Flow
Cost Control
Balance Sheet
Position
Liquidity
Leverage
Q1 FY 2013
$1,600.0
160
151
$1,418.2
$1,400.0
140
$1,323.0
$1,200.0
129
120
$1,076.8
105
$1,000.0
148
109
100
$866.2
$800.0
$766.8
80
$600.0
60
$400.0
40
$200.0
20
$0.0
2008
2009
2010
2011
2012
0
2008
2009
2010
2011
2012
31
Balance Sheet
Leverage
Growth/Volumes
Managed Care
Debt to Capitalization
140%
60%
133%
55%
51%
Operating Income &
Cash Flow
Cash to Debt
52%
50%
48%
120%
120%
47%
100%
Cost Control
Balance Sheet
Position
Liquidity
Leverage
95%
40%
80%
30%
74%
64%
60%
20%
42%
44%
40%
36%
35%
Q1 FY 2013
40%
74%
80%
61%
10%
20%
0%
45%
48%
2008
2009
0%
2008
2009
Excl Cap Leases
2010
2011
2012
W/Cap Leases
W/Cap Leases
2010
2011
2012
Excl Cap Leases
32
Volume Indicators
FY2013 – 3 months ended September 30, 2012
Growth/Volumes
Percent
Increase
(Decrease)
Over P/Y
Managed Care
Operating Income &
Cash Flow
Inpatient Admissions
34,479
34,042
1.3%
Cost Control
Adjusted Admissions
66,853
64,455
3.7%
Investment Income
Deliveries
6,351
6,244
1.7%
117,136
107,800
8.7%
20,230
19,507
3.7%
253,980
230,768
10.1%
5.38
5.36
1.544
1.486
Balance Sheet
Position
Liquidity
Leverage
Q1 FY 2013
Selected Statistics
ER Visits
Outpatient Surgeries
Diagnostic & Therapeutic
Visits
ALOS
Case Mix Index
Actual
P/Y
0.4%
3.9%
33
Operating Income and Cash Flow
FY2013 – 3 months ended September 30, 2012
Growth/Volumes
Managed Care
Operating Income &
Cash Flow
18.0%
$140.0
$124.4
16.0%
$120.0
$98.7
$98.4
$100.0
14.0%
12.0%
Cost Control
$80.0
10.0%
Investment Income
$60.0
8.0%
Balance Sheet
Position
$44.6
6.0%
$40.0
$23.5
Liquidity
Leverage
$20.0
Q1 FY 2013
$0.0
$21.8
4.0%
2.0%
0.0%
Actual
P/Y
Bgt
Operating Income
Operating Cash Flow
Operating Income Margin
Operating Cash Flow Margin
34
Treasury Update
Current Debt Profile
Underlying Interest Rate Exposure
Fixed/Variable Debt Mix (After Swaps)
Credit Provider Exposure
Variable
Rate,
0.3%
Putable
Variable
Rate
Put
Variable
(VRDB's)
Rate
25.2%
(FRN's),
34.4%
NonPutable
Variable
Rate
(FRN's),
34.4%
Fixed
Rate,
Fixed40.4%
Rate,
40.4%
Underlying Debt Mix
Mode
Par Amount
Percent
Fixed Rate
$
408,335,000 40.4%
Variable
Putable Variable Rate (VRDB's)
254,600,000 25.2%
Non-Putable Variable Rate (FRN's)
347,200,000 34.4%
Total
$ 1,010,135,000 100.0%
Wells Fargo
LOC, 20.2%
Fixed
Rate,
40.4%
Fixed Rat
40.4%
Synthetic
Fixed,
59.2%
Wells44.9%
Fargo
FRN, 12.8%
Northern
Trust LOC,
5.0%
Net Interest Rate Exposure
Mode
Par Amount
Percent
Fixed Rate
$ 408,335,000
40.4%
Variable Rate
2,900,000
0.3%
Synthetic Fixed
598,900,000
59.3%
Total
$ 1,010,135,000
JP Morgan
100.0%
17.1%
RBC FRN,
44.9%
JPMorgan
Chase LOC,
17.1%
Credit Provider Rollover Exposure
Mode
Par Amount
Renewal
JP Morgan Chase LOC
$ 103,200,000 7/8/15
Northern Trust LOC
30,000,000 5/25/15
Wells Fargo
2008A-2 FRN
77,000,000 9/1/16
LOC
121,400,000 11/4/14
RBC
2010B FRN
162,400,000 1/1/16
2008A-1 FRN
107,800,000 9/1/16
Total
$ 601,800,000
*Does not include capital lease obligations
36
Investment Program
Unrestricted Investments
Operating Account (in millions)
$1,600.0
3.0%*
$1,400.0
2.4%*
4.9%*
$1,200.0
International
5.5%*
US Equities
$1,000.0
Money Mkts
$800.0
Fixed
$600.0
Short Term
$400.0
$200.0
$0.0
FY 2010
FY 2011
* Percentages are Total Portfolio Returns
FY 2012
YTD 9/30/12
37
Asset-Liability Modeling
(“Capital Deficit”)
Balance sheet decomposition and actions currently under consideration
Investments
US
Aggregate
Bonds,
34%
Return (% of Investments)
Net Assets
Capital and
operating assets
-2σ
(3.5%)
“Equity”
-1σ
(0.1%)
“Expected”+1σ +2σ
6.6% 9.9%
3.2%
US Cash,
52%
US SmallMid Cap,
2%
US Large
Cap, 9%
(%)
“Capital
deficit”
Int'l
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
Equity, 3%
Investment Considerations
• Current Investment Policy Statement in
process of review by management and
Investment Consultant, Towers Watson
• Investment teams are beginning to run
analyses to evaluate potential asset
allocations that would target alternate
expected returns
• Evaluate higher expected return allocations
while keeping expected volatility as close
to current levels as possible
Cash and
investments
Debt and Capitalized Leases
Unhedged
Floating
0%
Cap. Leases
(Fixed)
41%
Natural Fixed
24%
Cost (% of Debt)
-2σ
5.2%
-1σ
5.3%
“Expected” +1σ +2σ
5.4%
5.6% 5.7%
Total assets
Synthetic Fixed
35%
(%)
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
Debt Considerations
• Realize present value savings on the “in
the money” fixed rate refundings
• Rebalance risk profile (bank, put, variable,
fixed rate, and swap exposure)
• Reduce weighted average cost of capital
• Increase floating interest rate exposure
• Evaluate self liquidity VRDB structure to
further reduce bank exposure and support
costs
Net capital deficit = $48.5MM; 95% worst deficit = $119.5MM
38
Conclusion
Take away points
•
•
•
•
•
•
Market Share Leader in Houston
Superior Regional Coverage
Operating Cash Flow Generation
Effective Cost Management – Best Practice
Improved Liquidity and Leverage Position
Well Positioned for Accountable Care and Population
Management
• Quality – Competitive Advantage for Memorial Hermann
• National Recognition – Significant Accomplishments as a
Provider of Excellence
40