Benchmarking of Top Hospitals in the United States June 2013
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CAGR and Y-o-Y Revenue Growth Revenue Growth (Y-o-Y, %)
Gentiva Health
(4.8%)
Minimum (4.4%)
Universal Health
Select Medical
HCA
Lifepoint Hospitals
2.5%
5.2%
11.2%
12.1%
3.0%
5.3%
Tenet
Healthsouth
Community Health Systems
8.6% Average
Health Management
Vanguard Health
16.3%
21.5%
11.9%
14.4%
17.2%
Kindred
Mednax
Davita Healthcare
Maximum
Revenue CAGR (2009-2012), %
Tenet
0.4%
Minimum
Community Health Systems
Lifepoint Hospitals
2.5%
4.6%
3.2% 3.8% HCA
Select Medical
Davita Healthcare
9.6% 10.2%
9.6% Average
Healthsouth
Universal Health
Kindred
13.1%
12.1% Mednax
Vanguard Health
13.9%
13.5% Health Management
23.1%
14.1%
Maximum
Gentiva Health
Gentiva Health Services and Community Health Systems are struggling with revenue growth
Vanguard Health acquired 13 hospitals in 2011, which provided a boost to its revenue growth during last few years
Source: Company Reports, Thomson One Banker and Sutherland Research Š 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Operating Expenses to Sales Ratio (%) Operating Expenses to Sales Ratio (%)
2010
Mednax
Davita Healthcare
Healthsouth
77.7%
82.8%
84.7%
Gentiva Health
HCA
88.4% 89.8% Average
2011
Healthsouth
77.3%
81.3%
Davita Healthcare
83.3%
2012
Mednax
78.2% 78.6%
Minimum
HCA
Universal
85.9%
Davita Healthcare
HCA
83.3%
80.6% Healthsouth
Vanguard Health
86.4%
84.3% Lifepoint Hospitals
94.6%
Select Medical
88.6%
86.8% Average
Kindred
98.1%
91.4%
Maximum Community Health
Universal
Select Medical
88.0% 89.1%
88.0% 88.6% Average
Minimum
Universal
Select Medical
86.6% 87.7% 89.2% 90.1%
Minimum
Mednax
Lifepoint Hospitals
Community
Vanguard Health
92.1%
95.4% 96.3%
90.6% Lifepoint Hospitals
Kindred
Maximum Gentiva Health
Community Health
91.7%
91.3%
Vanguard Health
Mednax, Healthsouth and Davita have been managing their operating cost consistently better than their peers
Kindred, Vanguard and Community Health have the highest operating cost to sales ratio all through
Kindred
95.3% 96.5%
Maximum
Gentiva Health
Source: Company Reports, Thomson One Banker and Sutherland Research Š 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Operating Cash Flow to Sales (%) Operating Cash Flow to Sales (%)
Community Health Systems This ratio indicates the ability of a company to translate its sales into cash. A higher and growing value is a good indicator of cash with the company
Davita Healthcare
2011
Gentiva Health Services
6.6% 4.9% 7.2%
19.7% 17.6% 17.8%
17.0% 20.1% 22.1%
Healthsouth
2012
Health Management Association
Most of the hospitals have hovered around the comparable levels in 2011 and 2012
Lifepoint Hospitals
8.6% 10.8% 9.2%
5.4% 4.5% 5.0% 2010
11.1% 11.0% 6.8%
21.3% 23.2% 23.2% 9.2% 10.2% 10.7%
14.6% 14.4% 13.9%
14.9% 17.5% 16.6%
8.4% 9.0% 10.1%
Kindred
11.0% 14.8% 12.2%
Universal Health Services
Tenet Healthcare
19.3% 23.2% 23.7%
HCA Holdings
Vanguard Health
Increase in revenue and decline in operating cash resulted in decline in the ratio for Vanguard in 2012 from the previous year
Select Medical Holdings
Mednax
Gentiva Health recovered to slightly higher levels in 2012 from those of 2010 after declining in 2011
Source: Company Reports, Thomson One Banker and Sutherland Research Š 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Margin Comparison (GP, EBIT and Net Income) Margin Comparison (GP, EBIT and Net Income) GP Margin
EBIT Margin
98.3%
94.3% 91.3%
89.8% 77.6%
Net Margin
80.3%
79.3%
78.8%
Kindred and Gentiva Health lag all other hospitals both at the operating profit and net income level
66.7% 48.0% 46.9% 40.3%
27.7% 14.1% 8.3%
8.2%
15.6%
19.7% 12.0%
9.1%
1.9%
10.2%
8.2%
4.4% 4.9%
2.0%
1.7%
8.7%
6.5% 2.4%
5.8%
21.5%
0.9%
11.1%
13.3%
4.3%
4.5%
1.6%
-0.7%
HCA
Community Health
Tenet Healthcare
Davita Healthcare
Universal Health Services
Health Management
Kindred
Vanguard Health
Lifepoint Hospitals
Mednax
Healthsouth
Gentiva Health Services
Universal Health Services and HealthSouth seem to be having better profitability
Source: Company Reports, Thomson One Banker and Sutherland Research Š 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Employee Productivity
2010
Lifepoint Hospitals
2011
Select Medical Holdings
Healthsouth
371.0 121.5 117.3
Vanguard Health
86.9 92.1 157.0
Kindred
92.3 97.4 98.6
145.6 131.6 121.1
Universal Health Health Management Services Association
87.7 126.8 145.5
142.9 143.0 167.1
112.0 161.3 167.1
176.6 170.3 153.3
162.6 153.4 154.1
Community Tenet Davita Health Healthcare Healthcare Systems
107.4 71.0 79.2
HCA Holdings
149.3 154.8 135.7
158.2 149.2 161.8
470.0 482.3 504.6
Revenue per Employee (‘000 USD)
Mednax
Gentiva Health Services
Mednax is a specialty services hospital, which may be the reason for its higher employee productivity
2012
2010
Kindred
2011
Lifepoint Hospitals
Select Medical Holdings
Healthsouth
543.6 103.4 103.5
185.4 190.0 168.7
84.6 117.6 115.3 Vanguard Health
73.6 75.6 149.3
Universal Health Health Management Services Association
55.4 53.2 54.3
137.2 147.9 158.4
151.5 164.8 178.3
222.3 216.9 300.0
139.1 140.2 147.1
Community Tenet Davita Health Healthcare Healthcare Systems
105.1 96.3 92.4
HCA Holdings
168.9 172.8 173.0
123.1 135.2 137.6
683.3 690.1 764.0
Asset per Employee (‘000 USD)
Mednax
Gentiva Health Services
2012
Source: Company Reports, Thomson One Banker and Sutherland Research © 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Revenue, Revenue Growth and EBIT Revenue (Bn USD), Revenue growth and EBIT (%) 30%
25%
Y-o-Y Revenue growth (FY 12 over 11)
Though Mednax is much smaller than other hospitals, it is performing better than most of them
Vanguard Health 5.9 Health Management Association 6.8
20%
Davita Healthcare 8.2
15% Kindred 6.2
10%
Lifepoint Hospitals 3.4 Select Medical Holdings 2.9
Mednax 1.8
Healthsouth 2.1
5% Tenet Healthcare 9.1
Universal Health Services 7.7
0%
Community Health Systems 13.0
-5%
-10% -5%
Gentiva Health and Community Health seem to be the most troubled of the lot
HCA Holdings 33.0
Gentiva Health Services 1.7 0%
5%
10%
15%
20%
25%
30%
EBIT Margin, FY 2012, % Source: Company Reports, Thomson One Banker and Sutherland Research Š 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Thank You
Š 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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