March 2014 Prime Healthcare Services Prime Healthcare Services is - PowerPoint PPT Presentation

March 2014

Prime Healthcare Services • Prime Healthcare Services is one of the largest for-profit hospital systems in the U.S. – Founded by Dr. Prem Reddy, M.D., FACC, FCCP. – Began by rescuing Desert Valley Hospital and Desert Valley Medical Group in Victorville from bankruptcy. – Specializes in saving failing hospitals from bankruptcy – saving hospitals, saving jobs, saving lives. – Largest for-profit operator of hospitals in the state of California based on number of facilities – Recent diversification into Pennsylvania, Kansas, Nevada and Texas; acquisitions pending in Michigan, New Jersey and Rhode Island. • Hospitals provide full range of both inpatient and outpatient including general acute care services, emergency room, general and specialty surgery, intensive/critical care, obstetrics, behavioral health, rehabilitation and diagnostic services. • Prime Healthcare hospitals are known for always keeping their emergency rooms open, rarely requiring patients diversion to other hospitals. • Operates 25 acute care hospitals (includes 6 managed by the non-profit Prime Healthcare Services Foundation) with 5.2 thousand licensed beds and more than 30,000 employees; facilities are located in the following states – California: 14 – Texas: 4 – Kansas: 2 – Pennsylvania: 2 – Rhode Island: 2 – Nevada: 1 2

Dr. Prem Reddy, Chairman of the Board, President, and CEO Prem Reddy, MD, FACC, FCCP Dr. Prem Reddy is double Board-Certified in Internal Medicine and Cardiology. During his 25 years of practice in California, he performed more than 5,000 cardiac procedures, including coronary angiography and angioplasty and permanent pacemaker implantations. In 2001, Dr. Reddy founded Prime Healthcare Services, which owns and operates 19 hospitals. Among the many accolades, Prime Healthcare was recognized as one of the “15 Top Health Systems” in the nation in 2013. This was the third time in five years Prime Healthcare has been recognized. In addition, since 2003, 27 Prime Healthcare hospitals have been recognized among the “100 Top Hospitals” in the nation. Dr. Reddy also founded and has been the sole contributor to the Prime Healthcare Foundation, a 501(c)(3) nonprofit public charity that owns six non-profit hospitals. Combined, Prime Healthcare Services and Prime Healthcare Foundation have hospitals in six states: California, Kansas, Nevada, Pennsylvania, Rhode Island and Texas. Prime Healthcare Foundation was founded and entirely funded by Dr. Reddy and his family with current assets of over $700 million. It owns six non-profit acute care hospitals both in California and Texas. In addition, the Foundation supports various charities that promote and direct health education, scholarships, public healthcare education and free community clinics. Dr. Reddy has been named as one of the 50 Most Influential Physician Executives in health care by Modern Healthcare, the fourth time in six years. 3 3

Prime Healthcare Affiliated Foundations Dr. Prem Reddy Family Foundation, 501(c)3, Est. 1989 • Dr. Reddy recently donated $500,000 to Cal State San Bernardino and its department of nursing. To recognize his gift, the nursing lab will be renamed the Dr. Prem Reddy Nursing Laboratory. • The Dr. Prem Reddy School of Health Sciences at Victor Valley Community College. • Public Health Library. • Awards scholarships for students entering the field of healthcare, including the Dr. Prem Reddy Academic Excellence Scholarship. • Supports free community clinics. • Provides grants and support for community education, public projects and to other non-profit organizations. The Prime Healthcare Services Foundation, 501(c)3, nonprofit public charity, Est. 2008 • Includes five non-profit hospitals donated debt free to the Foundation: – Encino Hospital Medical Center – Huntington Beach Hospital – Montclair Hospital Medical Center – Pampa Regional Medical Center – Sherman Oaks Hospital • Knapp Medical Center acquired directly by the Foundation in 2013 Both foundations, founded and funded by Dr. Reddy and his family, have combined assets of more than $700 million. 4

Company History: Long Term Track Record of Facility Growth • Recent expansion focused on diversifying outside CA and into TX, PA, NV, KS, and RI • Signed purchase agreements in NJ with LOIs in CA and MI Prime Healthcare Hospitals Donated Hospitals 30 6 25 6 20 4 15 3 2 24 10 19 16 13 12 12 9 13 5 7 2 1 0 2001 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E St. Mary’s (NJ) - Acquired Desert Valley Chino Valley Sherman Paradise Encino Alvarado Harlingen (TX) Roxborough St. John (KS) Oaks Valley (PA) APA Garden Grove Providence (KS) St. Mary’s Montclair Centinela St. Michaels (NJ) Shasta Landmark (RI) – APA (NV) Huntington San Dimas Rehabilitation St. Clare’s Health Beach Lower Bucks Hospital of RI System (NJ) – (PA) La Palma (RI) APA Dallas (TX) West Anaheim 3 Hospitals Pampa (TX) Knapp (TX) – Donated Encino Montclair Sherman Huntington Oaks Beach acquired by Foundation Pampa Regional (TX) 5

Recognized Quality Healthcare Provider Prime Healthcare Services has been recognized by Truven Health Analytics (formerly Thomson Reuters) as one of the “Top 15 Health Systems” in the U.S. based on clinical performance • Prime Healthcare named as a Top 15 Health System in 2012 and 2013 based on quality of care, efficiency and patient satisfaction by Truven Health Analytics (formerly Thomson Reuters) – Also ranked in the Top 10 in 2009 – Only for profit health system named in the Top 15 in the nation in 2013 • Eight Prime Healthcare hospitals named 100 Top Hospitals in the nation by Truven Health Analytics (formerly Thomson Reuters) in 2014. Prime Healthcare hospitals have been ranked among the top 100 hospitals 27 times. • Key criteria evaluated: – Mortality rates – Medical complications – Medicare core measures (quality measures) and patient safety standards – Risk-adjusted length of stay – Patients satisfaction 7

Recognized Quality Healthcare Provider (Cont’d) Top performer Top 15 Health Systems in the Nation by Truven Health Analytics – 2012 Detail Second in class Third in class Top 15 Health Systems Clinical Metrics of Top Health Systems Health System Location Core Large Health Systems (> $1.5 bn) Complic- Patient Measure Mortality ations Safety Percent ALOS Banner Health Phoenix, AZ Winning Health System Index Index Index (%) (days) CareGroup Healthcare System Boston, MA Banner Health 0.85 0.98 0.91 96.4 4.8 Jefferson Health System Radnor, PA Baptist Health 0.93 0.72 0.72 97.2 4.5 Baystate Health 0.65 0.86 0.60 96.6 4.8 Memorial Hermann Healthcare System Houston, TX CareGroup Healthcare System 0.81 1.42 0.70 97.3 4.8 St. Vincent Health Indianapolis, IN Geisinger Health System 0.80 1.04 0.82 96.2 4.5 Medium Health Systems ($750 mm - $1.5 bn) HCA Central and West Texas Division 0.83 0.86 0.86 99.2 5.2 Baystate Health Springfield, MA Jefferson Health System 0.81 0.85 1.01 98.1 4.9 Geisinger Health System Danville, PA Maury Regional Healthcare System 0.70 0.62 0.77 95.3 4.1 HCA Central and West Texas Division Austin, TX Memorial Hermann Healthcare System 0.70 0.73 0.94 97.4 4.9 Mission Health System Asheville,NC Mission Health System 0.97 0.73 0.69 96.9 4.7 Prime Healthcare Services Ontario, CA Poudre Valley Health System 0.91 1.05 0.63 95.5 4.2 Small Health Systems (<$750 mm) Prime Healthcare Services 0.55 0.63 0.55 99.0 4.3 Baptist Health Montgomery, AL Saint Joseph Regional Health System 0.99 0.79 0.77 97.6 4.4 Maury Regional Healthcare System Columbia, TN St. Vincent Health 1.04 0.68 0.88 93.8 4.7 Tanner Health System 0.92 0.62 0.76 96.8 4.5 Poudre Valley Health System Fort Collins, CO Benchmark Health Systems Medians 0.83 0.79 0.77 96.9 4.7 Saint Joseph Regional Health System Mishawaka, IN Peer Group Medians 1.04 0.98 0.98 95.8 5.1 Tanner Health System Carrollton, GA Note: Prime’s performance measures place the Company in the top quintile of all health systems 8