HealthSouth Corp is a leading healthcare organization focused on inpatient rehabilitation. It operates facilities across 26 states in the US. After an accounting fraud scandal in the early 2000s, HealthSouth restructured with an independent board and committees. It now aims to regain its position as the top provider of inpatient rehabilitation services. However, HealthSouth faces challenges from industry trends like declining hospitalization rates, rising costs, and healthcare reform. Competition is also intense with many national and regional rivals. To differentiate, HealthSouth focuses on innovation, using new technologies to advance patient care and recovery times. It has scale advantages from its large network of facilities.
Colonial Life And Accident Broker Presentation 1011mrwhayes
The document discusses the rising costs of health care in the US and the challenges it poses for employers and consumers. It notes the proliferation of health insurance acronyms and complexity of the system. Various factors driving up costs are outlined, including an aging population, increased medical inflation, and government intervention. This has led employers to shift more costs to employees through higher deductibles and premiums. Consumer-driven health plans such as health reimbursement accounts (HRAs) and health savings accounts (HSAs) are presented as ways to help control costs by making consumers more responsible for health care spending.
The document discusses trends in CEO pay from 2010-2014. Some key findings include:
1. Median total compensation in the S&P 1500 increased from $4.0 million in 2010 to $5.3 million in 2014, driven largely by increases in stock awards.
2. Performance-based stock awards saw the largest growth from 2010-2013, increasing 38.1% in the S&P 1500, but appeared to plateau in 2014.
3. Options decreased substantially over the period, with the median value in the S&P 1500 falling from $346,600 in 2010 to $19,857 in 2014.
4. Equity compensation made up over half of total pay on average
The document discusses trends in CEO pay from 2010-2014. Some key findings include:
1. Median total compensation in the S&P 1500 increased from $4.0 million in 2010 to $5.3 million in 2014, driven largely by increases in stock awards.
2. Performance-based stock awards saw the largest growth from 2010-2013, increasing 38.1% in the S&P 1500, but this growth plateaued in 2014.
3. Options decreased the most as a component of pay over this period, with the median value in the S&P 1500 falling from $346,600 in 2010 to $19,857 in 2014.
4. Equity compensation made up
Presentation given to Institute of Healthcare Executives & Suppliers. Spring, 2010.
See more at: http://www.integratedhealthcarestrategies.com/knowledgecenter.aspx.
U S Supreme Court Upholds The Affordable Care Act1charles_3us
The U.S. Supreme Court upheld the constitutionality of the Affordable Care Act, including the individual mandate requiring Americans to obtain health insurance. The Court ruled the mandate is valid under Congress's taxing authority. However, it placed some limitations on the Medicaid expansion. Employers and health plans must continue complying with ACA provisions such as reporting requirements, limits on flexible spending accounts, and minimum loss ratios for insurers. Additional reforms take effect in 2014, including the employer mandate and health insurance exchanges.
Managed Care Sector Insights – Summer 2018Duff & Phelps
This document provides commentary and observations on trends in the managed care sector based on financial performance of publicly traded companies from 2007-2017. Key points include:
- UnitedHealth Group has significantly increased its dominance in revenue, market cap, and share price performance compared to competitors over the past decade.
- Centene Corporation transformed from a regional Medicaid company into a multi-line national and international managed care provider through acquisitions and organic growth.
- Investment income represents a meaningful percentage of pretax income for many managed care companies, and rising interest rates are expected to boost investment income.
- Managed care companies primarily invest funds conservatively in cash, cash equivalents, and debt instruments due to priorities of
This document provides an overview and summary of key provisions of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA). It discusses fundamentals such as definitions of large employers, full-time employees, and grandfathered plans. It also summarizes requirements for health insurance exchanges, essential health benefits, employer penalties, the small business tax credit, early retiree subsidy, and coverage mandates for grandfathered and non-grandfathered plans. The document is intended to help attendees understand and comply with health care reform regulations.
- The Affordable Care Act employer mandate requires companies with 50+ full-time employees to provide affordable health insurance to at least 95% of employees or face penalties.
- Complying with complex ACA reporting requirements, like analyzing workforce data and filing IRS forms, is challenging without outsourced support.
- Bundling outsourced payroll administration and benefits administration helps employers streamline reporting, reduce costs, and ensure compliance with evolving regulations.
Colonial Life And Accident Broker Presentation 1011mrwhayes
The document discusses the rising costs of health care in the US and the challenges it poses for employers and consumers. It notes the proliferation of health insurance acronyms and complexity of the system. Various factors driving up costs are outlined, including an aging population, increased medical inflation, and government intervention. This has led employers to shift more costs to employees through higher deductibles and premiums. Consumer-driven health plans such as health reimbursement accounts (HRAs) and health savings accounts (HSAs) are presented as ways to help control costs by making consumers more responsible for health care spending.
The document discusses trends in CEO pay from 2010-2014. Some key findings include:
1. Median total compensation in the S&P 1500 increased from $4.0 million in 2010 to $5.3 million in 2014, driven largely by increases in stock awards.
2. Performance-based stock awards saw the largest growth from 2010-2013, increasing 38.1% in the S&P 1500, but appeared to plateau in 2014.
3. Options decreased substantially over the period, with the median value in the S&P 1500 falling from $346,600 in 2010 to $19,857 in 2014.
4. Equity compensation made up over half of total pay on average
The document discusses trends in CEO pay from 2010-2014. Some key findings include:
1. Median total compensation in the S&P 1500 increased from $4.0 million in 2010 to $5.3 million in 2014, driven largely by increases in stock awards.
2. Performance-based stock awards saw the largest growth from 2010-2013, increasing 38.1% in the S&P 1500, but this growth plateaued in 2014.
3. Options decreased the most as a component of pay over this period, with the median value in the S&P 1500 falling from $346,600 in 2010 to $19,857 in 2014.
4. Equity compensation made up
Presentation given to Institute of Healthcare Executives & Suppliers. Spring, 2010.
See more at: http://www.integratedhealthcarestrategies.com/knowledgecenter.aspx.
U S Supreme Court Upholds The Affordable Care Act1charles_3us
The U.S. Supreme Court upheld the constitutionality of the Affordable Care Act, including the individual mandate requiring Americans to obtain health insurance. The Court ruled the mandate is valid under Congress's taxing authority. However, it placed some limitations on the Medicaid expansion. Employers and health plans must continue complying with ACA provisions such as reporting requirements, limits on flexible spending accounts, and minimum loss ratios for insurers. Additional reforms take effect in 2014, including the employer mandate and health insurance exchanges.
Managed Care Sector Insights – Summer 2018Duff & Phelps
This document provides commentary and observations on trends in the managed care sector based on financial performance of publicly traded companies from 2007-2017. Key points include:
- UnitedHealth Group has significantly increased its dominance in revenue, market cap, and share price performance compared to competitors over the past decade.
- Centene Corporation transformed from a regional Medicaid company into a multi-line national and international managed care provider through acquisitions and organic growth.
- Investment income represents a meaningful percentage of pretax income for many managed care companies, and rising interest rates are expected to boost investment income.
- Managed care companies primarily invest funds conservatively in cash, cash equivalents, and debt instruments due to priorities of
This document provides an overview and summary of key provisions of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA). It discusses fundamentals such as definitions of large employers, full-time employees, and grandfathered plans. It also summarizes requirements for health insurance exchanges, essential health benefits, employer penalties, the small business tax credit, early retiree subsidy, and coverage mandates for grandfathered and non-grandfathered plans. The document is intended to help attendees understand and comply with health care reform regulations.
- The Affordable Care Act employer mandate requires companies with 50+ full-time employees to provide affordable health insurance to at least 95% of employees or face penalties.
- Complying with complex ACA reporting requirements, like analyzing workforce data and filing IRS forms, is challenging without outsourced support.
- Bundling outsourced payroll administration and benefits administration helps employers streamline reporting, reduce costs, and ensure compliance with evolving regulations.
Our group selected a recent annual report for WellPoint We assumed they approached our audit firm to hire us as their new auditor. We performed a preliminary analytical review and risk assessment, and wrote a report indicating to the partner-in-charge our recommendation with respect to this potential client. I completed the preliminary risk analytical review.
- Cardinal Health is a global integrated healthcare services and products company with FY17 revenues of $129.9 billion. It operates through two segments: Pharmaceutical and Medical.
- In July 2017, Cardinal Health acquired Medtronic's Patient Recovery Business for $6.1 billion to expand its medical product portfolio. The acquisition is expected to contribute over $0.21 per share in FY18 and over $0.55 per share in FY19.
- Cardinal Health provides solutions to customers across its four focus areas of logistics, business solutions, product solutions, and patient solutions to enable more efficient healthcare delivery and connections between clinicians and patients.
The document provides an overview of American health reform, including its rationale and key implications. It discusses three main parties in the healthcare system - individuals, insurers, and providers - and how their interactions were impacted by reform. Specifically, it summarizes changes to how individuals acquire insurance through the creation of state health insurance exchanges, expansion of Medicaid, and use of subsidies. It also reviews the new employer and individual mandates imposed by reform.
This document discusses 9 important benefits decisions facing employers in 2016. It covers deciding whether to offer health insurance and pay penalties, managing required benefits reporting, weighing high-deductible health plans, switching to a health insurance exchange, offering voluntary benefits, providing tools to help employees choose benefits, using wellness incentives, planning spouse/partner coverage, and preparing for the upcoming Cadillac tax. The document provides context and considerations for each decision to help employers navigate an evolving benefits landscape.
Elaj Group is a healthcare organization operating in multiple countries focusing on chronic care delivery. It has medical centers, hospitals, and labs. Elaj uses a combination of generic strategies including cost leadership, differentiation, and focus. Its vision is to provide leading healthcare services in the Middle East and Africa. The mission is to build and operate diagnostic and medical centers/hospitals providing high-quality, affordable services. A PESTEL analysis identified political instability, foreign exchange rate fluctuations, price increases, lifestyle changes, and new technologies as important external factors. Porter's five forces showed competition from other groups, moderate threats from new entrants, and strong supplier relationships.
Financial Planning In Healthcare PowerPoint Presentation Slides SlideTeam
This complete deck is oriented to make sure you do not lag in your presentations. Our creatively crafted slides come with apt research and planning. This exclusive deck with fourtythree slides is here to help you to strategize, plan, analyse, or segment the topic with clear understanding and apprehension. Utilize ready to use presentation slides on Financial Planning In Healthcare PowerPoint Presentation Slides with all sorts of editable templates, charts and graphs, overviews, analysis templates. It is usable for marking important decisions and covering critical issues. Display and present all possible kinds of underlying nuances, progress factors for an all inclusive presentation for the teams. This presentation deck can be used by all professionals, managers, individuals, internal external teams involved in any company organization.
Agility Health is a leading healthcare provider focused on physical rehabilitation services. It has over 145 locations across 20 states and 1+ million patient visits annually. The presentation discusses Agility Health's business segments, financial performance, the acquisition of Medic Holdings, and how the acquisition expands Agility's footprint into Canada and the orthotics business while strengthening management and governance. The acquisition is expected to increase revenues and EBITDA scale, improve the capital market profile, and provide a scalable growth platform through acquisition synergies.
Commercial Management In Healthcare PowerPoint Presentation Slides SlideTeam
This PPT deck displays fourtytwo slides with in depth research. Our topic oriented Commercial Management In Healthcare PowerPoint Presentation Slides presentation deck is a helpful tool to plan, prepare, document and analyse the topic with a clear approach. We provide a ready to use deck with all sorts of relevant topics subtopics templates, charts and graphs, overviews, analysis templates. Outline all the important aspects without any hassle. It showcases of all kind of editable templates infographs for an inclusive and comprehensive Commercial Management In Healthcare PowerPoint Presentation Slides presentation. Professionals, managers, individual and team involved in any company organization from any field can use them as per requirement.
The document discusses recent healthcare reforms in the United States and their potential impacts. It notes that the Patient Protection and Affordable Care Act aims to increase insurance coverage while lowering costs. Additionally, the HITECH Act promotes the meaningful use of IT in healthcare to improve quality and reduce spending. Major effects may include 45-55 million Americans gaining insurance, increased use of electronic health records and pay-for-performance programs between providers and payers. Overall the reforms seek to align financial incentives around improved patient outcomes and care coordination.
What decisions should you make for your business related to ObamaCare and HealthCare Reform?
The Roadmap & Decision Tree (pages 9 & 10) help to simplify and help you zero in on what you need to do.
If you have 49 or fewer employees...
If you have 50 or more employees...
This will help make your path clear.
Pediatric Dental Benefits Under the ACA - What Employers (and dentists) Need ...Spring Consulting Group
This document provides an overview of pediatric dental benefits under the Affordable Care Act and how they may impact dental practices. It discusses how pediatric dental coverage is considered an essential health benefit and must be included in certain health plans. It describes the three structures for how pediatric dental benefits can be offered (embedded, stand alone, bundled). It also outlines some pediatric dental plan benefit options and issues dental practices may face in navigating these new benefits, such as deciding whether to credential with dental insurance providers and how to manage claims processing.
Agility Health provides physical rehabilitation services through a network of over 145 locations across 20 states in the US and Canada. They offer services including physical therapy, occupational therapy, athletic training, and speech therapy. The presentation outlines Agility Health's business segments, financial performance, growth strategy including acquisitions, and experienced management team.
A document discusses the evolving role of captives within the changing healthcare environment. It notes rising healthcare costs and the growth of accountable care organizations (ACOs) and self-insurance. Captives are increasingly being used to manage ACO and employee healthcare risks. Case studies show how group captives can generate savings for employers by pooling stop-loss insurance and improving risk management. Forming a successful captive requires thorough planning and establishing sound fundamentals.
Healthcare executives maintain a relatively positive outlook for the upcoming year. The majority remain optimistic, expecting similar growth to last year in revenue, prices, volume and capital spending. Many other non-financial trends within the industry are also seen as having a beneficial impact on consumers and the quality of care being delivered.
For one, trends around Mergers & Acquisitions (M&A) are increasing from last year, with a general optimism about the impact, especially on the industry side, for efficiency and revenue. About three-quarters of executives also believe that increased M&A may result in a greater focus on care (over business administration.)
Second, most executives anticipate a continued--and increasing--reliance on technology that should improve quality and reduce costs. But with higher stakes, the challenge will be how to seamlessly incorporate technology industry-wide without compromising security.
Despite the optimistic tone, however, healthcare costs continue to be an untenable uphill battle for consumers, with no improvement over last year. Executives perceive that these overwhelming costs are damaging care and that many consumers may be sacrificing care to save money. Many executives claim they are working to figure out ways to alleviate this problem. In addition, executives are more open to government involvement with regulating the industry, but there is very little consensus on how to measure success and utilize outcomes.
Mercer Capital's Value Focus: Healthcare Facilities | Year-End 2014Mercer Capital
Mercer Capital's Healthcare Facilities Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.
Credit Suisse investor update february 2013 finalBrian Shapiro
This document provides information on upcoming manager roadshows for various funds in February and March 2013. It also lists new launches and relationships for hedge funds in the Americas, including details on Clearline Capital which is launching in March 2013 with $50M in seed capital. Finally, it announces upcoming hedge fund conferences in New York, Hong Kong and London for global capital introduction events.
Colliers assisted Methodist Healthcare System in acquiring 86 acres of land for a new hospital campus by expeditiously assembling two adjacent tracts of 40 and 46 acres that were not actively on the market. Through Colliers' relationships and expertise, Methodist was able to purchase the desirable land from a major landowner while maintaining anonymity during negotiations, allowing development to begin on the new West Houston Hospital Campus.
The document provides an overview of the impact and challenges faced by Prairie State Legal Services in 2009. It summarizes that while the demand for legal aid increased due to economic hardship, funding for legal aid decreased due to reductions in IOLTA and state funding. Prairie State responded by focusing resources on bankruptcy, consumer law, and foreclosure cases. It also highlights the successful partnership with the University of Illinois College of Law's fellowship program that provided additional staffing capacity. Finally, it notes that the Will County Legal Assistance Program merged with Prairie State in 2009 to jointly provide services across 36 counties in northern and central Illinois.
The Canadian Breast Cancer Foundation (CBCF) is dedicated to funding breast cancer research and supporting those affected by breast cancer. Since its inception over 25 years ago, CBCF has invested over $93 million in over 600 research grants. CBCF's Leaders for the Cure program provides opportunities for corporations to support CBCF's mission through fundraising and awareness campaigns. There are three levels of involvement for Leaders for the Cure: Leader, Cabinet Member, and Board Member, each with increasing commitments of personal donations, fundraising, and strategic support.
Our group selected a recent annual report for WellPoint We assumed they approached our audit firm to hire us as their new auditor. We performed a preliminary analytical review and risk assessment, and wrote a report indicating to the partner-in-charge our recommendation with respect to this potential client. I completed the preliminary risk analytical review.
- Cardinal Health is a global integrated healthcare services and products company with FY17 revenues of $129.9 billion. It operates through two segments: Pharmaceutical and Medical.
- In July 2017, Cardinal Health acquired Medtronic's Patient Recovery Business for $6.1 billion to expand its medical product portfolio. The acquisition is expected to contribute over $0.21 per share in FY18 and over $0.55 per share in FY19.
- Cardinal Health provides solutions to customers across its four focus areas of logistics, business solutions, product solutions, and patient solutions to enable more efficient healthcare delivery and connections between clinicians and patients.
The document provides an overview of American health reform, including its rationale and key implications. It discusses three main parties in the healthcare system - individuals, insurers, and providers - and how their interactions were impacted by reform. Specifically, it summarizes changes to how individuals acquire insurance through the creation of state health insurance exchanges, expansion of Medicaid, and use of subsidies. It also reviews the new employer and individual mandates imposed by reform.
This document discusses 9 important benefits decisions facing employers in 2016. It covers deciding whether to offer health insurance and pay penalties, managing required benefits reporting, weighing high-deductible health plans, switching to a health insurance exchange, offering voluntary benefits, providing tools to help employees choose benefits, using wellness incentives, planning spouse/partner coverage, and preparing for the upcoming Cadillac tax. The document provides context and considerations for each decision to help employers navigate an evolving benefits landscape.
Elaj Group is a healthcare organization operating in multiple countries focusing on chronic care delivery. It has medical centers, hospitals, and labs. Elaj uses a combination of generic strategies including cost leadership, differentiation, and focus. Its vision is to provide leading healthcare services in the Middle East and Africa. The mission is to build and operate diagnostic and medical centers/hospitals providing high-quality, affordable services. A PESTEL analysis identified political instability, foreign exchange rate fluctuations, price increases, lifestyle changes, and new technologies as important external factors. Porter's five forces showed competition from other groups, moderate threats from new entrants, and strong supplier relationships.
Financial Planning In Healthcare PowerPoint Presentation Slides SlideTeam
This complete deck is oriented to make sure you do not lag in your presentations. Our creatively crafted slides come with apt research and planning. This exclusive deck with fourtythree slides is here to help you to strategize, plan, analyse, or segment the topic with clear understanding and apprehension. Utilize ready to use presentation slides on Financial Planning In Healthcare PowerPoint Presentation Slides with all sorts of editable templates, charts and graphs, overviews, analysis templates. It is usable for marking important decisions and covering critical issues. Display and present all possible kinds of underlying nuances, progress factors for an all inclusive presentation for the teams. This presentation deck can be used by all professionals, managers, individuals, internal external teams involved in any company organization.
Agility Health is a leading healthcare provider focused on physical rehabilitation services. It has over 145 locations across 20 states and 1+ million patient visits annually. The presentation discusses Agility Health's business segments, financial performance, the acquisition of Medic Holdings, and how the acquisition expands Agility's footprint into Canada and the orthotics business while strengthening management and governance. The acquisition is expected to increase revenues and EBITDA scale, improve the capital market profile, and provide a scalable growth platform through acquisition synergies.
Commercial Management In Healthcare PowerPoint Presentation Slides SlideTeam
This PPT deck displays fourtytwo slides with in depth research. Our topic oriented Commercial Management In Healthcare PowerPoint Presentation Slides presentation deck is a helpful tool to plan, prepare, document and analyse the topic with a clear approach. We provide a ready to use deck with all sorts of relevant topics subtopics templates, charts and graphs, overviews, analysis templates. Outline all the important aspects without any hassle. It showcases of all kind of editable templates infographs for an inclusive and comprehensive Commercial Management In Healthcare PowerPoint Presentation Slides presentation. Professionals, managers, individual and team involved in any company organization from any field can use them as per requirement.
The document discusses recent healthcare reforms in the United States and their potential impacts. It notes that the Patient Protection and Affordable Care Act aims to increase insurance coverage while lowering costs. Additionally, the HITECH Act promotes the meaningful use of IT in healthcare to improve quality and reduce spending. Major effects may include 45-55 million Americans gaining insurance, increased use of electronic health records and pay-for-performance programs between providers and payers. Overall the reforms seek to align financial incentives around improved patient outcomes and care coordination.
What decisions should you make for your business related to ObamaCare and HealthCare Reform?
The Roadmap & Decision Tree (pages 9 & 10) help to simplify and help you zero in on what you need to do.
If you have 49 or fewer employees...
If you have 50 or more employees...
This will help make your path clear.
Pediatric Dental Benefits Under the ACA - What Employers (and dentists) Need ...Spring Consulting Group
This document provides an overview of pediatric dental benefits under the Affordable Care Act and how they may impact dental practices. It discusses how pediatric dental coverage is considered an essential health benefit and must be included in certain health plans. It describes the three structures for how pediatric dental benefits can be offered (embedded, stand alone, bundled). It also outlines some pediatric dental plan benefit options and issues dental practices may face in navigating these new benefits, such as deciding whether to credential with dental insurance providers and how to manage claims processing.
Agility Health provides physical rehabilitation services through a network of over 145 locations across 20 states in the US and Canada. They offer services including physical therapy, occupational therapy, athletic training, and speech therapy. The presentation outlines Agility Health's business segments, financial performance, growth strategy including acquisitions, and experienced management team.
A document discusses the evolving role of captives within the changing healthcare environment. It notes rising healthcare costs and the growth of accountable care organizations (ACOs) and self-insurance. Captives are increasingly being used to manage ACO and employee healthcare risks. Case studies show how group captives can generate savings for employers by pooling stop-loss insurance and improving risk management. Forming a successful captive requires thorough planning and establishing sound fundamentals.
Healthcare executives maintain a relatively positive outlook for the upcoming year. The majority remain optimistic, expecting similar growth to last year in revenue, prices, volume and capital spending. Many other non-financial trends within the industry are also seen as having a beneficial impact on consumers and the quality of care being delivered.
For one, trends around Mergers & Acquisitions (M&A) are increasing from last year, with a general optimism about the impact, especially on the industry side, for efficiency and revenue. About three-quarters of executives also believe that increased M&A may result in a greater focus on care (over business administration.)
Second, most executives anticipate a continued--and increasing--reliance on technology that should improve quality and reduce costs. But with higher stakes, the challenge will be how to seamlessly incorporate technology industry-wide without compromising security.
Despite the optimistic tone, however, healthcare costs continue to be an untenable uphill battle for consumers, with no improvement over last year. Executives perceive that these overwhelming costs are damaging care and that many consumers may be sacrificing care to save money. Many executives claim they are working to figure out ways to alleviate this problem. In addition, executives are more open to government involvement with regulating the industry, but there is very little consensus on how to measure success and utilize outcomes.
Mercer Capital's Value Focus: Healthcare Facilities | Year-End 2014Mercer Capital
Mercer Capital's Healthcare Facilities Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.
Credit Suisse investor update february 2013 finalBrian Shapiro
This document provides information on upcoming manager roadshows for various funds in February and March 2013. It also lists new launches and relationships for hedge funds in the Americas, including details on Clearline Capital which is launching in March 2013 with $50M in seed capital. Finally, it announces upcoming hedge fund conferences in New York, Hong Kong and London for global capital introduction events.
Colliers assisted Methodist Healthcare System in acquiring 86 acres of land for a new hospital campus by expeditiously assembling two adjacent tracts of 40 and 46 acres that were not actively on the market. Through Colliers' relationships and expertise, Methodist was able to purchase the desirable land from a major landowner while maintaining anonymity during negotiations, allowing development to begin on the new West Houston Hospital Campus.
The document provides an overview of the impact and challenges faced by Prairie State Legal Services in 2009. It summarizes that while the demand for legal aid increased due to economic hardship, funding for legal aid decreased due to reductions in IOLTA and state funding. Prairie State responded by focusing resources on bankruptcy, consumer law, and foreclosure cases. It also highlights the successful partnership with the University of Illinois College of Law's fellowship program that provided additional staffing capacity. Finally, it notes that the Will County Legal Assistance Program merged with Prairie State in 2009 to jointly provide services across 36 counties in northern and central Illinois.
The Canadian Breast Cancer Foundation (CBCF) is dedicated to funding breast cancer research and supporting those affected by breast cancer. Since its inception over 25 years ago, CBCF has invested over $93 million in over 600 research grants. CBCF's Leaders for the Cure program provides opportunities for corporations to support CBCF's mission through fundraising and awareness campaigns. There are three levels of involvement for Leaders for the Cure: Leader, Cabinet Member, and Board Member, each with increasing commitments of personal donations, fundraising, and strategic support.
This document provides an overview of events and announcements related to the Indiana University School of Informatics. It discusses an extreme makeover project where student volunteers redesigned the websites of three nonprofit organizations in 48 hours. It also mentions that an IUB faculty and student team received top honors at the 2009 BioCreative II.5 workshop in Madrid for their submissions in an article classification task, and notes upcoming career events being hosted by the Bloomington campus Career Services office. The document provides brief summaries of grants received to support projects aimed at fostering diversity and participation in computing fields.
This document summarizes an investment opportunity to invest in rare and classic cars through a company called Rare Metal. Rare Metal aims to source, restore, and sell rare classic cars to maximize returns, which are projected to be over 10% annually. The minimum investment is £100,000, with tax benefits available through the UK's Enterprise Investment Scheme. Rare Metal's experienced team will manage the restoration and sale of cars to take advantage of the strong historic performance and future potential of the classic car market.
Prophet worked extensively with the marketing and executive leadership teams at IU Health to develop and implement a new, system-wide brand and customer experience strategy to help achieve this vision. Leveraging extensive qualitative and quantitative research across different stakeholders as the foundation, we developed a comprehensive brand strategy for the health system that involved: A new positioning that highlighted the breadth and depth of the entire system, changing the name from Clarian to Indiana University Health, developing a compelling and consistently deliverable patient experience across the system, and developing the key elements that would bring the new brand to life and deliver the desired patient experience.
The document discusses the methodology used to compile the PERE 50 ranking of the largest private equity real estate firms. It examines the criteria for inclusion, such as only including funds raised between 2009-2014, and excluding certain types of funds like core/core-plus funds. It also discusses some of the changes in the composition of the PERE 50 over the past two years, with many long-time firms dropping out and many new firms debuting due to changes in the fundraising environment post-financial crisis.
1 Origins of Organization TheoryLearning ObjectivesAf.docxoswald1horne84988
1 Origins of Organization Theory
Learning Objectives
After reading this chapter, you should be able to:
• Apply organization theory to health care organizations.
• Define and identify the major elements of theory.
• Trace the history of organization theory and the development of management as a profession.
• Examine the major foundational organization theories.
Ford Motor Co./Associated Press
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CT
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CO_TX
CO_BL
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fra81455_01_c01_001-032.indd 1 4/23/14 10:00 AM
Henry Ford’s Revolutionary Vision:
Affordable Cars, a Caring Workplace
After creating the Model T car in 1908, Henry Ford revolutionized the automobile industry by
instituting the assembly-line mode of production. In 1914 he caused a national sensation by dou-
bling the prevailing wage for factory work to $5 a day. Ford recognized that to implement his vision
of building affordable cars, he needed a workforce of skilled and stable employees. To achieve this
objective, he offered attractive incentives such as profit sharing to encourage his employees to save
for their futures. This policy was highly effective: In 1914 the average Ford worker had $207.14 in
savings; 5 years later this figure was $2,171.14 (Snow, 2013).
The Model T was the first car specifically designed to be
affordable for the average consumer. Its price was made
possible by production innovations like assembly-line
manufacturing and interchangeable parts. The $5 daily
minimum wage for Ford workers and the company’s
initiatives to improve employee health and social wel-
fare were as revolutionary as Ford’s manufacturing pro-
cesses. Together, all of these groundbreaking tactics were
successful: By 1918 half of all cars on American roads
were Model Ts. The Ford Motor Company’s story illus-
trates how organization theory evolved in the context of
changes in business processes and how employee health
and well-being began to be recognized as an important
asset for a successful company.
Employers today are increasingly including wellness
programs in their health insurance benefits; a grow-
ing number offer incentives for participation and for
achieving specific health outcomes. According to the
National Business Group on Health (2012), a coali-
tion of large public and private employers that pro-
vide health insurance to more than 55 million people,
80% of member firms reward program participation,
and 38% have penalties for noncompletion. The most
popular incentives are premium reductions (used by
61% of employers); cash or gift cards (used by 55% of employers); and employer-sponsored contri-
butions to a health savings account or similar health care–based savings vehicle (used by 27% of
employers). Table 1.1 describes the wellness incentive programs used by several major corporations
(Wieczner, 2013).
Copyright Bettmann/Corbis/AP Images
Henry Ford built affordable cars using
well-paid workers.
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fra81455_01_c01_001-032.indd 2 4/23/14 .
Community Benefit vs. Organizational BenefitPerhaps you have b.docxmonicafrancis71118
Community Benefit vs. Organizational Benefit
Perhaps you have been to a health fair sponsored by a local hospital in your community. Who benefits from such an effort? When you or your neighbors are screened for signs of illness (hypertension, for instance) or learn about available services, clearly the promotion benefits you, but what about the hospital? Having its name associated with "community service" benefits the institution. Any patients and/or clients the institution attracts may also result in some financial benefit, even if the organization is ostensibly "non-profit."
In this Discussion, you will identify examples of promotion for social change in your community and analyze whether the promotion benefits the community, the organization, or both.
To prepare for this Discussion:
· Review this week's Learning Resources.
· Identify two local health care providers and identify an example of each organization's effort in promoting a service or services as a form of positive social change. One of the organizations should be for-profit, the other, not-for-profit.
Post a brief description of how each organization's promotion fosters social change. Then, evaluate how each organization's marketing promotion benefits the community and how it benefits the organization. Finally, for each example of marketing promotion you have identified, analyze whether the interest of the community and the interest of the organization are in conflict. Briefly comment on how the promotions of the for-profit and non-profit organizations differ and how they are similar.
Support your work with specific citations from this week's Learning Resources and/or additional sources as appropriate.
Fortenberry, J. L., Jr., Elrod, J. K., & McGoldrick, P. J. (2010). Is billboard advertising beneficial for healthcare organizations? An investigation of efficacy and acceptability to patients. Journal of Healthcare Management, 55(2), 81–9 5.
STRATEGY CHALLENGE
Alan M. Zuckerman
What Would You Do?
does the strategic plan require updating because
of healthcare reform?
Metro Health System (MHS) is a successfiil integrated
delivery system (IDS) and the second largest health-
care organization operating in its metropolitan area.
With the passage of healthcare reform into law, how-
ever, MHS s leaders see a need to review and possibly
revise the organization's strategic plan. Although
MHS's relatively recent full plan update still should
be valid, over the past nine months, board members
and executives have raised important questions about
the strategy. The question is, does MHS need to fine-
tune its plan or is a more significant change in strate-
gic direction required?
The Situation
MHS is a $1.3 billion (annual operating revenue),
multifaceted IDS in a medium to large city. Its
performance has been consistently strong for the
past seven years as measured by margin, share,
and other indicators. The organization comprises
two large hospitals, about 300 emplo.
Wef he workplace_wellnessalliance_industryagenda_2012Celso Mendes
The document discusses the importance of workplace wellness initiatives for addressing human capital challenges. It notes that demand for skilled workers is rising due to economic growth, while the workforce faces threats from aging and non-communicable diseases. This can reduce workforce capacity and productivity through absenteeism, presenteeism, and rising healthcare costs. Workplace wellness programs have the potential to help keep workers healthier for longer, countering the link between aging and disease, and playing a role in talent attraction and retention. The Workplace Wellness Alliance, established by the World Economic Forum, aims to establish the business case for wellness by quantifying the link between interventions, metrics of their impact, and return on investment across countries.
STRATEGIC PLAN PART II - ENVIRONMENTAL ANALYSIS AND1STRATEGIC P.docxdessiechisomjj4
STRATEGIC PLAN PART II - ENVIRONMENTAL ANALYSIS AND 1
STRATEGIC PLAN PART II - ENVIRONMENTAL ANALYSIS AND 2
Environmental Analysis and Setting Strategic Goals
A business environmental analysis is a process that looks at the external factors that can impact on the business. Such factors can be revealed through conducting Porter`s Five Forces analysis that looks at the microenvironment and PESTEL, which looks at the macro environment (Yurkel, 2012). Porter five forces analyzes competition level in an industry and looks at business strategy development (Porter, 2008). Such factors include the competition in the same industry, he suitable customers, channels, suppliers to the enterprise, politics, the economy, technical issues, political matters, environmental issues, technological issues, or legal issues, among others. All these factors are examined independently to see how each would affect the strategic plan of the business.
Implications of the Environmental Analysis on the Strategic Plan
A strategic plan has to be created to guide actions of a business. Once you create the business plan, it gives you a concrete steps that one should take in order to make a business successful. Before you develop a strategic plan, it is necessary that one study the environmental factors that will affect the organization. When one fails to respond to the conditions in the business environment, it can doom the firm to failure. For example, when the economy is weak the business may have to check on pricing and do more sales, or venturing into a business requires one check the political environment and the chances the company will peacefully exist and earn you profits.
A proper environmental analysis will analyze all the major forces that could affect the business, and tries to forecast how the future events can alter the company. The nature of business determines what the environmental analysis should focus. For instance, a corporation that depends on foreign suppliers has to look into currency exchange rates, changes in shipping costs and import tariffs. One can forecast the short-term or long-term effects of the environmental factors on the business that having a basic idea of events in the world will enable you form a meaningful strategic plan.
Hillside Healthcare`s environmental analysis will include a check on Porter`s five forces and the PESTEL. Porter`s five forces looks at the competition. Hillside Healthcare does not face a significant threat from new entrants as the Healthcare business requires a considerable amount of capital and has many legal requirements to be adhered to. There is a threat from substitute products or services emanating from the fact that currently there are alternatives such as the fee-for-service payment models or the medical plans such as Medicare and other medical insurance plans.
Hillside Healthcare has to come up with strategies that make it look more attractive than these other services or incorporate such services int.
Four Keys to Increase Healthcare Market ShareHealth Catalyst
With leadership alignment, easy access to data, and a roadmap to reach their objectives, health systems can drastically increase revenue and grow market share by applying four principles:
Key 1. Alignment.
Key 2. Vehicles.
Key 3: Five tools: access to data, data acumen; finance, vision to execution, and prioritizing outcomes.
Key 4: Education.
Access to the right data can drive changes that generate $48M in revenue, surpassing the year three market share goals in year two.
CHAPTER 1Introduction to Healthcare FinanceDefinition of hea.docxwalterl4
CHAPTER 1
Introduction to Healthcare Finance
Definition of healthcare finance
Course goal
The role of healthcare finance
Finance department structure
The health services industry
Regulatory and legal issues
Copyright 2009 Health Administration Press
1 - ‹#›
Definition of Healthcare Finance
The definition depends on the context:
Policymaker or manager
Type of healthcare organization
For our purposes, healthcare finance is the practice of finance in health services organizations, which includes accounting and financial management.
Copyright 2009 Health Administration Press
1 - ‹#›
Accounting Versus
Financial Management
Accounting concerns the measurement, in financial terms, of events that reflect the resources, operations, and financing of an organization.
Financial management provides the theory, concepts, and tools necessary to help managers make better financial decisions.
Are the two disciplines independent?
Copyright 2009 Health Administration Press
1 - ‹#›
Goal of the Course
The primary goal of this course is to introduce you to the field of healthcare finance, including
principles and concepts,
applications across a variety of provider settings, and
the impact of alternative reimbursement methods.
Along the way, some personal finance concepts are also discussed.
Copyright 2009 Health Administration Press
1 - ‹#›
Finance Role and Activities
The primary role of finance in health services organizations is to plan for, acquire, and utilize resources to maximize the efficiency (and value) of the organization.
Finance activities include
planning and budgeting,
managing financial operations,
financing decisions,
capital investment decisions,
financial reporting,
financial and operational analysis,
contract management, and
financial risk management.
Primarily financial staff functions
Copyright 2009 Health Administration Press
1 - ‹#›
Finance activities can be summarized by the four Cs:
Costs. Costs must be continuously monitored to ensure that they are not excessive for the number of services provided.
Cash. Businesses must have sufficient cash on hand to meet payment obligations as they occur.
Capital. Businesses must raise the capital (money) necessary to buy the facilities and equipment needed to provide services.
Control. Businesses must control their resources to ensure that they are used wisely.
The Four Cs
1 - ‹#›
Importance of Finance Over Time
When most health services organizations were reimbursed on the basis of costs incurred, the role of finance was secondary.
Today, however, the finance function has increased in importance.
There are no unimportant functions in health services organizations. Operations, human resources, facilities, and so on are all essential to mission accomplishment.
Copyright 2009 Health Administration Press
1 - ‹#›
Finance Department Structure
Chief financial officer (CFO)
Comptroller Treasurer
Budgeting Capital acquisition
Re.
Employers are always looking for ways to reduce one of their biggest expenditures–the cost of providing health insurance to employees. Many employers have explored solutions such as adding wellness plans, reducing usage, and providing different provider access mechanisms, all with modest success.
Stemming the rising costs of health insurance requires management to understand and improve healthcare outcomes for their employee and dependent populations. Changing the future of employer health insurance will require a multi-faceted approach:
Driving additional value by reducing utilization of healthcare services within these employer populations.
Utilizing a wider lens through which to view performance of various providers, then making decisions based on those who are consistently providing low cost, high quality care.
Employer will need to combine their data with other companies across a geographic region to get a better picture of the provider landscape than has ever been possible before.
Financial Statement Analysis
Financial Statement Analysis
Abstract
In order to assist managers in strategic decision-making regarding certain matters of the company and meet all financial reporting requirements, a thorough internal financial analysis of the organization should be conducted, as this will determine and influence the financial well-being of the organization. A financial analysis fulfills the following purposes: it assess the growth potential of the business, it measures profitability, assess overall financial strength, and indicates the trend of achievements just to name a few. Generally, internal regulations can provide significant benefits to the organization as a whole by reducing the possibility of maladministration, improve the quality of financial information, and detect/prevent error and fraud. This paper is to therefore, suggest a key insight about the financial health of the company based on the review of the financial statement, identify the current industry trend that has the most significant impact on the organization’s financial performance, and suggest a key strategy that can be used in order to improve the financial performance of the organization while recommending an approach to implement the suggested strategy
(Baginski et al 2014)
Universal Health Services is a leading, eminent, and one of the most respected health care management companies. The organization operates through its branches of acute care hospitals and ambulatory centers, and behavioral health facilities on a national scale. Furthermore, Universal Health Services has experienced tremendous growth in its performance in the last few years as indicated in the trend analysis of the company’s performance from year 2012, specified below, and thus maintains one of the strongest balance sheets
(UHS, Inc.)
The financial analysis indicates that there is a steady increase in total revenue, gross profit and operating expenses from the year of 2012 to 2013 and from 2013 to 2014. These increases can be attributed to the increase in their level of operations from year to year. Universal Health Services has posted growing net incomes despite growing competition and legislation within the healthcare industry. The company posted an increase of $67,487 from year 2012 to year 2013. In 2014 the net income grew by $34,610 to report a total net income of $545,343.
Profitability Ratios
2012
2013
2014
Net Profit Margin
0.0637
0.07012
0.0676
Return on Assets
0.05407
0.06145
0.060766
Return on Equity
0.16343
0.15715
0.14597
An analysis of the profitability shows that the company experienced an increase in profitability from year 2012 to 2013, however in 2014 the profitability seemed to decelerate yet remained higher than 2012. The company’s total assets also increased from year to year thus substantiating to a growth-oriented organization. The increase in total assets further indicates that management has put more funds into investments contri ...
Employer Health Plans: Keys to Lowering Cost, Boosting BenefitsHealth Catalyst
Employers that offer robust employee health plans at affordable costs are more likely to attract and retain a great workforce. Healthcare, however, is often a top expense for organizations, making balancing attractive benefits with attractive costs a complex undertaking. Employers need a deep understanding of employee populations and opportunities to manage health plan costs without sacrificing quality.
An analytics-driven approach to employee population health management gives employers insight into two key steps to lower healthcare costs and enhance benefits:
* Manage easily fixed cost issues.
* Use healthcare cost savings to fund expanded benefits.
Capital Investment in Health Systems: What is the latest thinking?HFG Project
Capital investment in health typically refers to large expenditures in construction of hospitals and other facilities, investment in diagnostic and treatment technologies, and information technology platforms. These investments are characterized by their longevity and they are critical to efforts to improve healthcare quality and efficiency. Contrary to developed countries where there is well documented experience on capital investment in the health sector, including use of public private partnerships for the investment; there is little evidence on capital investment in health from low and middle income countries.
This work was undertaken to add to the HFG’s knowledge and learning strategy by clarifying what good practice guidance exists in capital benchmark in LMICs health sectors, as well as the HFG project’s experience in the area. This brief will be of value to all those interested in the planning and financing the capital investment in the health sector. This includes politicians, planners, managers, health professionals, architects, designers, and researchers in both the public and private sectors.
This is assignment 1 that assignment 2 have to relate to. PLEASE..docxabhi353063
This is assignment 1 that assignment 2 have to relate to. PLEASE.
Financial Statement Analysis
Student name
University
Professor
October 25, 2016
Financial Statement Analysis
Based on your review of the financial statements, suggest a key insight about the financial health of the company. Speculate on the likely reaction to the financial statements from various stakeholder groups (employee, investors, shareholders). Provide support for your rationale.
Health Management Associates, Inc. (NYSE: HMA) is the operator and owner-general acute care centers in the non-urban communities situated in the US, particularly in the Southwest. The organization was founded in 1977. The hospitals provide services such as oncology, emergency room care, general surgery, internal medicine, radiology, pediatric services, coronary care, and diagnostic care (
www.healthcaremanagement.com
).The company is also providing outpatient services like x-ray, respiratory therapy, one-day surgery, laboratory services, physical therapy as well as cardiology therapy. The mission of the Health Management is to provide America’s best local healthcare. They provide processes, capital finance, expertise, and people that can ensure that the local hospitals can accomplish their mission of delivering compassionate and high-quality healthcare that would substantially improve the lives of patients, the communities they serve, and the physicians providing the care
www.healthcaremanagement.com
)
With regard to the review of the current financial statement, HMA is in a dangerous financial state as a result of the present increasing debts and legal woes. The Office of the Inspector General, Justice Department, and the Department of Health and Human Services served the organization with summons regarding a software program that was used by ED doctors and the records from the emergency department. Some reports suggested that there was pressure from the company’s hospitals management to admit patients from emergency rooms so as to maximize profits. Paul Meyer, former compliance director, claimed that HMA’s fraudulent activities could attract government investigation (Britt, 2012).
The common stock of Health Management Associates was owned by almost 850 shareholders, as per the records of December 31, 2012, with hundreds of institutional investors included. HMA had expanded to include 70 hospitals situated in 15 states, with roughly 10,562 present licensed beds. In 2012, HMA realized about $5.9 billion in net revenue (Britt, 2012).
HMA gets payments for the services it renders from the federal government through the Medicare program, the states in which it functions under each Medicaid program, and commercial insurance, among others; and patients, encompassing deductibles and co-payments. Basically, deductibles and co-payments are part of the bill of patients for the medical services provided, which many government and private payers expect the patient to cater for. ...
this is assignment 1
Financial Statement Analysis
Student name
University
Professor
October 25, 2016
Financial Statement Analysis
Based on your review of the financial statements, suggest a key insight about the financial health of the company. Speculate on the likely reaction to the financial statements from various stakeholder groups (employee, investors, shareholders). Provide support for your rationale.
Health Management Associates, Inc. (NYSE: HMA) is the operator and owner-general acute care centers in the non-urban communities situated in the US, particularly in the Southwest. The organization was founded in 1977. The hospitals provide services such as oncology, emergency room care, general surgery, internal medicine, radiology, pediatric services, coronary care, and diagnostic care (
www.healthcaremanagement.com
).The company is also providing outpatient services like x-ray, respiratory therapy, one-day surgery, laboratory services, physical therapy as well as cardiology therapy. The mission of the Health Management is to provide America’s best local healthcare. They provide processes, capital finance, expertise, and people that can ensure that the local hospitals can accomplish their mission of delivering compassionate and high-quality healthcare that would substantially improve the lives of patients, the communities they serve, and the physicians providing the care
www.healthcaremanagement.com
)
With regard to the review of the current financial statement, HMA is in a dangerous financial state as a result of the present increasing debts and legal woes. The Office of the Inspector General, Justice Department, and the Department of Health and Human Services served the organization with summons regarding a software program that was used by ED doctors and the records from the emergency department. Some reports suggested that there was pressure from the company’s hospitals management to admit patients from emergency rooms so as to maximize profits. Paul Meyer, former compliance director, claimed that HMA’s fraudulent activities could attract government investigation (Britt, 2012).
The common stock of Health Management Associates was owned by almost 850 shareholders, as per the records of December 31, 2012, with hundreds of institutional investors included. HMA had expanded to include 70 hospitals situated in 15 states, with roughly 10,562 present licensed beds. In 2012, HMA realized about $5.9 billion in net revenue (Britt, 2012).
HMA gets payments for the services it renders from the federal government through the Medicare program, the states in which it functions under each Medicaid program, and commercial insurance, among others; and patients, encompassing deductibles and co-payments. Basically, deductibles and co-payments are part of the bill of patients for the medical services provided, which many government and private payers expect the patient to cater for. The amount of deductibles and co-payments v.
Healthcare Financial Transformation: Five Leading StrategiesHealth Catalyst
Healthcare financial transformation—improving care delivery while lowering costs—has been an ongoing challenge for health systems in the era of value-based care and an even more prominent concern amid COVID-19. While better care and reduced expense to organizations and consumers might seem like opposing goals, by understanding the true cost of services and other drivers of expense, organizations can successfully manage costs while maintaining, and even improving, care delivery. To that end, health systems can use data- and analytics-driven tools and strategies to addresses financial challenges, including uncompensated care, prolonged accounts receivable days, discharged not final billed cases, inefficient resource use, and more.
The Top Five Insights into Healthcare Operational Outcomes ImprovementHealth Catalyst
Effective, sustainable healthcare transformation rests in the organizational operations that power care delivery. Operations include the administrative, financial, legal, and clinical activities that keep health systems running and caring for patients. With operations so critical to care delivery, forward-thinking organizations continuously strive to improve their operational outcomes. Health systems can follow thought leadership that addresses common industry challenges—including waste reduction, obstacles in process change, limited hospital capacity, and complex project management—to inform their operational improvement strategies.
Five top insights address the following aspects of healthcare operational outcomes improvement:
Quality improvement as a foundational business strategy.
Using improvement science for true change.
Increasing hospital capacity without construction.
Leveraging project management techniques.
Features of highly effective improvement projects.
BUDGET1Operating BudgetMonica AyresHCA 311 Health Ca.docxhartrobert670
BUDGET
1
Operating Budget
Monica Ayres
HCA 311: Health Care Financing and Information Systems
Kevin Hayes
July 13, 2015
Operating Budget
Before the manager or board accept the proposal for capital investment, there are a number of factors they should consider. The first factor to consider is the community need requirements (Herkimer, 1986). The health care needs of the community must be identified an then the capital investments selected which will best serve this need. In fact there is no use in internally selecting a capital project which management thinks the community needs, then trying to convince the citizenry that they need.
From the case provided, it is apparent that the move to expand the operations of the company is motivated by the fact that the company has not embarked on any serious capital investment plan for a period spanning over 6 years. This is a weak factor because it clearly indicates that the community need is not the main issue. The case further indicates that the company is facing severe competition from its rival in the Health Care market. This implies that the products are available from different and that there community members can still get products if they want from the competitors. Expanding is not a solution to this issue. In fact, if competition is what is forcing the company to seek plans to expand, then the manager or the board is less likely to accept the proposal.
Another factor to consider is marketability of the proposal (Herkimer, 1986). Based on the case provided, it is clear that there are many competitors in the market. Interestingly, the proposal intends to expand the enterprise so that the number of products produced increases. This is ridiculous because there is no need to increase the amount of products produced when it is clear that there are many competitors in the market. In fact, what the company should have done instead was to invest on technology to reduce the cost of production and hence lower the prices. This could enable the company compete well with competitors. Consequently, as far as marketability of proposed changes is concerned, the proposal is not strong.
The last factor to consider is urgency (Herkimer, 1986). Based on the case, there is no argument made to show that there is urgency or that the community needs the changes to be implemented urgently. This means that as far as urgency is concerned, the capital investment is not viable.
Reference
Top of Form
Herkimer, A. G. (1986). Understanding hospital financial management. Rockville, Md: Aspen Publishers.
Bottom of Form
CAPITAL INVESTMENT
1
Capital Investment Plan
Monica Ayres
HCA 311: Health Care Financing & Information Systems
Kevin Hayes
July 6, 2015
Capital Investment Plan
Abble Inc. is planning to undertake an expansionary Capital Investment process that will see the company’s operations and proceeds double hence cushioning the company’s going concern basis. The move to expand the operations of the company is ...
This document outlines four possible scenarios for the future of healthcare in the United States following the election of Donald Trump as president. The first scenario is called "Eisenhower Returns" and describes a future in 2021 where Trump has been re-elected and passed significant healthcare reform through Congress in 2018 called the "Empowering Patients First Act." This new law eliminated the individual mandate and exchanges from the ACA, transformed Medicaid into block grants, removed many insurer regulations, and relied on market incentives to encourage insurance coverage.
FINANCIAL STATEMENT ANALYSIS HEALTH MANAGEMENT ASSOCI.docxvoversbyobersby
FINANCIAL STATEMENT ANALYSIS: HEALTH MANAGEMENT ASSOCIATES
LA TONIA STEWART
DR. LAURA FORBES
HSA 525
AUGUST 4, 2013
FINANCIAL STATEMENT ANALYSIS: HEALTH MANAGEMENT ASSOCIATES
Based on your review of the financial statements, suggest a key insight about the financial health of the company. Speculate on the likely reaction to the financial statements from various stakeholder groups (employee, investors, shareholders). Provide support for your rationale.
Based on review of recent financial statements, Health Management Associates is in a precarious financial position due to its current legal woes and rising bad debt. The organization has been served with subpoenas by the Justice Department, the Department of Health and Human Services and Office of the Inspector General requesting records pertaining to a software program used by ED doctors and records regarding emergency department management In December 2012, CBS news magazine “60 Minutes” aired a story that featured interviews with several former HMA employees stating there was pressure from the company’s hospitals to admit patients from emergency rooms in order to maximize profits (Britt, 2012). HMA’s former compliance director, Paul Meyer, alleged HMA’s fraudulent practices in regard to Medicare and Medicaid patients was worthy of government investigation. In addition to Meyer’s claims, a hospital administrator, an executive vice-president and two doctors charged HMA with inappropriate systemic hospital admissions by ordering unnecessary tests and admitting patients without cause in an effort to increase revenue. Physicians were pressured to meet admissions quotas set by HMA or risk being reprimanded and even terminated. The former employees allege that HMA set an overall benchmark of 20 percent admission rate for emergency department patients and a 50 percent admission benchmark for patients 65 and older. As a result of the December 2, 2012 “60 Minutes” investigative report, HMA shares fell sharply on Monday, December 3, 2012 by 5.09 percent to $7.55.
As of July 30, 2013 HMA is now being acquired by Community Health Systems Inc. for $3.9 billion dollars, eventually totaling $7.6 billion dollars (including assumed debt) in a deal that HMA investors feel is motivated by the current hardships the company is facing. HMA stockholders and federal regulators have to still clear the deal even though the boards of directors of both organizations have approved the merger. After the deal was disclosed on Tuesday, HMA stocks fell 11 percent to $13.30 in trading, down $1.62 from its Monday price of $14.92 per share. HMA also stated on Tuesday that its second quarter earnings of 10 to 11 cents per share on $ 1.46 billion of revenue would fall well below Wall Street predictions (Murphy, 2013).
Identify the current industry trend that has the most significant impact on your chosen organization’s financial performance. Indicate the trend’s impact on the financial performance of the organization. As the ...
FINANCIAL STATEMENT ANALYSIS HEALTH MANAGEMENT ASSOCI.docx
SOI Example
1. I
(Courtesy of Google Images)
Coastal Health Consulting
Team #2, Section 2
Sean Hanagan
Allie Fisher
Chris Attridge
Monica Hucks
Michael T. Remus
2. II
1.
Table of Contents
Introduction 1
a. Position 1
b. Leadership 2
c. Alignment 4
d. Challenges 5
2. External Analysis 5
a. Dominant Economic Characteristics 5
b. Five Forces Analysis 10
c. PESTLE Analysis 13
d. Key Success Factors 16
e. Competitor Analysis 17
f. Industry Attractiveness 18
3. Appendices
a. Segmented Sales Appendix 1
b. Stock Price Tracking Appendix 2
c. Timeline Appendix 3
d. Board of Directors Appendix 4
e. Committee Structure Appendix 5
f. Stock Ownership of Directors Appendix 6
g. Top Management Team Appendix 7
h. Beneficial Owners Appendix 8
i. Mission and Vision Appendix 9
3. III
j. Alignment (7 S’s) Appendix 10
k. Healthcare Industry Rates Appendix 11
l. Subsidiaries Appendix 12
m. PESTLE Analysis Appendix 13
n. Strategic Group Map Appendix 14
o. U.S. Physical Therapy, Inc. Financials Appendix 15
p. Health Management Associates, Inc. Financials Appendix 16
q. Competitor Overview Appendix 17
r. Industry Attractiveness Matrix Appendix 18
s. Opportunities and Threats Matrix Appendix 19
5. 1
This report is intended to complete an in-depth analysis of HealthSouth Corp., a leading
organization in the healthcare industry. By looking at the internal and external factors in which
the organization operates, Coastal Health Consulting will be able to identify the business
landscape that HealthSouth Corp. has formed. By completing this, Coastal Health Consulting
will be able to earn greater insight to help HealthSouth in growing strategically and make
recommendations against the possibilities of threats within the industry.
Introduction
Position
PLAC Analysis
HealthSouth started in February of 1984, in Delaware, when it was incorporated as a
successor to Amcare. Since that incorporation, HealthSouth has grown and is now “located in 26
states, mainly in Texas, Pennsylvania, Florida, Tennessee, and Alabama,” with 22,000
employees to help run these facilities (Mergent Online, 2009). HealthSouth’s SIC code is 8093 -
Specialty outpatient clinics, NEC and it is NAICS code is 621498 - All other outpatient care
centers. In 2008, the company reported $1,842,400,000 in revenues, which can be seen in
Appendix 1, and a net income of $252,400,000, which is down 38.6% from last year (Business &
Resource Center, 2009). HealthSouth Corp., according to Mergent Horizon, primarily focuses on the
healthcare services of patient care sector of the industry, which include acute care and rehabilitative
hospitals (Mergent Horizon, 2009). Some major competitors, such as U.S. Physical Therapy, and Tenet
Healthcare Corp., fall into the same products and service line as HealthSouth. Within the last five years,
Tenet and HealthSouth have been following the same track in the market, which can be seen in Appendix
2, while U.S. Physical Therapy looks to be above the market average the past few years. Tenet has fallen
about 50%, while HealthSouth has only fallen 40% and U.S. Physical therapy looks to be up 5% over the
last five years.
6. 2
Evolution
There are several major milestones, which can be found in Appendix 3, that have helped
to shape HealthSouth into what the company has become today. HealthSouth was formed in
1984 by Richard Scrushy and some of his colleagues (Business & Company Resource Center,
2009). In 1989 HealthSouth made a move that would direct their future actions by entering the
sports rehabilitation market. Moving forward the firm focused much of its resources into
becoming the top provider of inpatient rehabilitative services. From 1995 to 2002 HealthSouth
made many lucrative deals to cement itself as one of the top organizations in the healthcare
industry. Unfortunately in 2002 the company’s CEO Richard Scrushy was fired after allegations
of accounting fraud (Business & Company Resource Center, 2009). HealthSouth was accused of
overstating revenues by 2.5 billion from 1997-2002. By 2006, HealthSouth decided to adjust its
strategy by divesting some of its less profitable locations (outpatient, diagnostic and surgery
centers) and focus its resources on inpatient rehabilitation. By focusing on inpatient
rehabilitation HealthSouth has been able to become more profitable in the last few years.
Leadership
Board of Directors
On the Board of Directors, three-quarters must be independent. These independent
members should have no relationship to the company either directly, through a partnership, a
shareholder, etc within the past three years. The chairman position is held by Jon F Henson who
is independent of the executives and CEO of the business (HealthSouth, 2009). The current
board of directors, which can be found in Appendix 4, has been together since 2003
(HealthSouth, 2009).
7. 3
There are five different committees that guide the board. These committees consist of the
Audit Committee of HealthSouth Corporation, Compensation Committee of HealthSouth
Corporation, Nominating/Corporate Governance Committee of HealthSouth Corporation,
Corporate Compliance Committee of HealthSouth Corporation and the Corporate Finance
Committee of HealthSouth Corporation. These committees, which can be found in Appendix 5,
are very independent from one another, and have a lot of freedom to do what they want
(HealthSouth, 2009).
In order to prevent fraud, HealthSouth entered into a settlement agreement with the
Securities and Exchange Commission (SEC) in June of 2005. Among other obligations, the
settlement agreement required HealthSouth to retain independent consultants to review the
adequacy and effectiveness of HealthSouth’s corporate governance and internal accounting
control policies and systems; develop training programs for officers, employees and contractors
covering securities laws and other obligations applicable to public financial reporting; and create
a new position of Inspector General reporting directly to the Audit Committee of the Board of
Directors to identify violations of law or HealthSouth policy relating to accounting or public
financial reporting.
Top Management Team
HealthSouth’s Top Management Team (TMT), in Appendix 6, consists of a number of
well qualified diverse individuals with a variety of skills. Although HealthSouth’s executive
management team has only been in place for a few years, all key executives have ample work
experience in the health care industry. Along side of the executive management team there are 18
members of HealthSouth’s senior management team who are all extremely accomplished and
experienced in management as well.
8. 4
Each one of HealthSouth’s top executives brings a variety of different skills which are all
extremely useful when creating and implementing strategic decisions. All current directors and
executives hold stock in the company which may also influence their strategic decisions.
Together they collectively own 1.87%, while Mr. Grinney owns the largest portion with 1.15%.
For complete list of executive stock holdings see Appendix 7.
Outside Investors
HealthSouth’s company website shows that there are a number of institutional investors
that currently hold a portion of the company in Appendix 8. The largest holder of outstanding
shares is Rowe Price Associates, Inc. with 10.06% of HealthSouth’s stock. There are many other
institutional investors who are also currently holding a portion of HealthSouth. They may be able
to slightly influence management; however, none have a controlling influence in HealthSouth.
Mission and Vision
HealthSouth’s mission, as stated in Appendix 9, is fairly vague with a main focus on
providing quality healthcare. In their vision, as in Appendix 9, their commitment to operating
their business ethically and honestly could be questioned, due to the recent lawsuit, but their
commitment to its patients and employees is very concise about what is expected. HealthSouth
focuses solely on quality customer care and quality atmosphere.
Alignment
The company is focused on providing quality healthcare at affordable prices. HealthSouth
currently operates in several different healthcare fields such as inpatient rehabilitation hospitals,
long term care hospitals, and outpatient rehabilitation satellites (Mergent, 2009). The physicians
at HealthSouth Corp. strive to provide the latest technologies in patient care (HealthSouth, 2009).
Having been plagued in the past with executive management scandals, HealthSouth has
9. 5
completed a board transition plan to provide board members who are independent of the
company and have varied fields of expertise. Overall, after the scandal, HealthSouth has
restructured itself and is now very well aligned, which is explained in Appendix 10.
Challenges
The biggest challenge facing HealthSouth Corp. as well as the entire healthcare industry
is the ongoing proceedings in congress over the proposed healthcare reform. Should the bill be
passed anytime in the near future, HealthSouth must be able to adapt and change their practices.
To prepare for these possible changes, HealthSouth must become as familiar as possible with the
healthcare reform bill and create a plan of action. The rising numbers of uninsured patients
represents a substantial obstacle for HealthSouth and other healthcare facilities (Standard &
Poor’s, 2009). Qualified nurses are a commodity that is currently not being met (Standard &
Poor’s, 2009). In order to become more successful, HealthSouth must find ways to attract more
qualified nurses to their healthcare facilities. Just 7 years ago, HealthSouth was stunned by
accounting fraud that involved to financial employees as well as possibly the C.E.O. prior to
2002. HealthSouth was growing into one of the most successful healthcare organizations in the
country. Since the accounting scandal was uncovered, the organization is still struggling to
regain its integrity and climb back to the top where it once stood.
Dominant Economic Characteristics
External Analysis
Overall Size and Market
According to the American Hospital Association (AHA), “a national trade organization
for hospitals, healthcare networks, and providers, the number of inpatient admissions per 1,000
persons had remained relatively flat between 2003 and 2006 at 118-119 per 1,000 persons.
10. 6
However, in 2007, it reached a level of 117.2, the lowest since 1996 (which was the lowest rate
in the last 20 years). In addition, the rate of growth in hospital admissions has generally been
declining during this decade, from just over 2% in 2000 to -0.2% in 2007, according to the AHA
(Standard & Poor’s, 2009).” The overall market for the healthcare industry is falling fast, which
can be seen in Appendix 11, but looks like it will rebound in the future.
Number of Rivals
HealthSouth finds itself in an industry cluttered with competition. Currently, HealthSouth
controls a fairly substantial piece of the market but to regain the form they once had they must
make further improvements (Standard & Poor’s, 2009). The healthcare industry is going through
changes and is seeing the lowest hospitalization rates in some time as well as decreases in
consolidation efforts between competing firms (Standard & Poor’s, 2009). Experts believe that
the economic downturn of 2009 has led to the decrease in mergers in the industry (Standard &
Poor’s, 2009).
Scope of competitive rivalry
HealthSouth competes at a national level. It offers the nation’s largest inpatient
rehabilitation services and they are located in 26 states across the country and in Puerto Rico.
The presence of national markets is not very important to the company right now because
HealthSouth is not completely national. Their goal is to remain the nation’s preeminent provider
of inpatient rehabilitation services (HealthSouth, 2009). However, due to the requirement of
earning a “certificate of need,” or CON, which HealthSouth must establish before opening any
new facilities with the state government, causes the scope to increase due to their rivals ability to
appeal this process and keep HealthSouth from opening new facilities (HealthSouth, 2009).
Degree of Product Differentiation
11. 7
The products of rivals are mainly different then what HealthSouth focuses on. Although
HealthSouth has facilities in inpatient rehabilitation, outpatient rehabilitation, long-term acute
care hospitals and home health, what they mainly focus on is the inpatient rehabilitation
(HealthSouth, 2009). A lot of other competitors in the industry focus on other things such as
pharmacy services, orthotic and prosthetic, behavioral healthcare services, general surgery,
emergency room care, etc (Mergent Online, 2009). There are always going to be companies that
will try and compete with HealthSouth since it is the nation’s leading inpatient rehabilitation
center.
Product Innovation
Technological innovation and R&D is essential to sustaining a competitive advantage in
the health care industry. New technologies provided by health care companies are helping to
advance patients’ quality of life and increase recovery time (HealthSouth, 2009). Advances in
new IT have the ability to improve quality, safety, and efficiency of healthcare (HealthSouth,
2009). While these new technologies will greatly improve the healthcare industry there initial
cost is a massive barrier to overcome.
Number of Buyers
The healthcare industry includes several sectors that serve different areas of society’s
healthcare needs. Included in this group are acute care hospitals, rehabilitation hospitals
psychiatric hospitals, nursing homes, assisted-living facilities, and home healthcare services
(Standard & Poor’s, 2009). As our population continues to age the need for healthcare will
continuously increase dramatically. Entities that pay for the majority of healthcare services,
which are primarily private insurance companies, Medicare, and Medicaid, have significant
12. 8
bargaining power over providers. Outside of government health providers, HealthSouth must
deal with private healthcare providers, as well as, the patients themselves purchasing the service.
Supply/ Demand Conditions
Since the recent economic downturn, and with the unemployment rate on the rise, many
of the Health Care providers have dropped those who could not afford health insurance. This has
allowed for the decrease in inpatient care and has drastically moved towards outpatient care.
According to the American Hospital Association (AHA), “the average length of stay (a
secondary driver of hospital utilization), declined from 5.6 days per admission for all US
hospitals in 2006, to 5.5 days per admission in 2007, a decline of approximately 2%.”(Standard
& Poor’s, 2009) Because of this unfortunate economic “flat line,” patients are looking for the
most affordable outcome, which seems to be outpatient facilities. With the prices dramatically
increasing at the inpatient facilities or even the long term care hospitals, which “must have an
average-length of stay in excess of 25 days” (HealthSouth 2008), most cannot afford to pay those
premium prices without affordable healthcare.
Pace of technological change
In order to compete in this industry, not only does HealthSouth need to be innovative
with technology, but so does its competitors. They must keep inventing new machines or
programs that will help with the recovery of patients within this industry. With HealthSouth
being the largest provider of inpatient rehabilitation facilities in this industry, they pride
themselves on being innovative. For example, they just “developed an innovative therapeutic
device called the ‘AutoAmbulator’ which can help advance the rehabilitative process for patients
who experience difficulty walking” (HealthSouth, 2008). This is the newest device that
HealthSouth has acquired, but they have many more devices/procedures that help with strokes,
13. 9
brain or spinal injury, walking, muscle spasms, and much more. This technology allows the
company to innovate new ideas to help treat the patients with multiple or severe disabilities.
With HealthSouth being a leader in this sector of the industry, a lot of its competitors are trying
to catch up and compete with new ideas.
Vertical Integration
HealthSouth operates in several stages of the healthcare market. They own and operate
hospitals, rehabilitation centers and long term care facilities (HealthSouth 2009). Looking at
HealthSouth’s subsidiaries, shown in Appendix 12, there are many surgery centers which could
allow for HealthSouth to vertically integrate into that market as well. This also allows for
customers to experience more than just rehabilitation at HealthSouth, but allows them to have
surgery with the firm as well. This relieves the pressure of patients having to change facilities in
order to completely recover.
Economies of Scale
Economies of scale are present in the healthcare industry. A doctor can see six patients in
an hour instead of three, which has helped cut down on the cost of supplying medical care to the
patients. If a new machine that was purchased can speed up the wait time in the emergency
room, then this helps cut down on the cost of having the patient in the hospital. Whether this cost
is passed down to the patients is up to hospital management. HealthSouth seems to be at an
advantage since they are such a large company. If a certain hospital in their chain does not have
the equipment to do a particular procedure, the patient can easily be referred to another
HealthSouth hospital that can accommodate that patient and HealthSouth will still get the
patient’s business. This is possible because in 22 of the 26 states that HealthSouth provides its
services, have more than one facility within the state and therefore allows for comfortable
14. 10
transfers. If an on-staff specialist is needed at a hospital and also at a long term healthcare center
that are close to each other, then HealthSouth saves money by having a doctor than can visit both
centers. If a particular hospital were a stand-alone facility, then it would have to have a specialist
come in, which costs more money. HealthSouth is able to save by having one specialist to
service two facilities.
Learning/ Experience Curve Effects
In the healthcare industry, a learning curve is definitely present. New technologies are
constantly on the forefront and it is up to the healthcare facilities to keep up with the changing
pace. If one hospital learns something new and is able to do it well, it certainly has an advantage
over other hospitals. There does not seem to be a significant cost advantage to learning these new
technologies. If anything, it costs the facility money to keep up; however, if it earns a reputation
for being the best in its new field or procedure, then the cost of the technology should pay off.
HealthSouth seems to be at an advantage because if one of their facilities is able to come up with
a new procedure or acquires a new technology, then it can share this information or tool with the
other facilities in the HealthSouth chain so they are able to benefit from it also. It all benefits the
HealthSouth brand as a whole.
Five Forces Analysis
Rivalry among competing sellers
The competition’s intensity within the industry is known as rivalry. Split between for-
profit, non- profit, and public hospitals, the healthcare industry finds it biggest competition with
the for-profit organizations. That sector must compete with non-profit hospitals as well because
“[i]nvestor-owned hospitals have 19% higher charges than non-profit hospitals, according to a
study appearing today in the Canadian Medical Association Journal (Devereaux, PJ. &
15. 11
Woolhandler, S. & Young, Q., 2004).” There is an strong rivalry among these competitors
because they must “secure the public’s trust; hospitals [need] to become highly reliable –
ensuring patients’ safety, providing clinically effective care, and embodying the ethical ideal that
has long been the expectation of the public (The Joint, 2008).” This in turn, could lower the
intensity of the rivalry by losing revenue and pressuring profit margins. “[W]hile some hospitals
experience healthy profit margins, an uncomfortable number of hospitals continue to be
unprofitable. There is a growing gap between have and have-not hospitals that may very well
widen as the future unfolds (The Joint, 2008),” and because of this there is a strong rivalry
among competitors in this industry.
Threat of new entrants
Although new entrants are always possible, this force in the healthcare industry is a weak
one. A new entrant into the healthcare industry is not a frequent occurrence. One of the largest
barriers to entry is the millions of dollars in financing it takes to even build the facility and stock
it with the most up to date medical tools. The next barrier would be to hire capable physicians to
care for the patients that may or may not come. The healthcare industry is not predictable. A
hospital cannot afford empty beds but also needs as much capacity as it can handle in case of
emergency situations. It must be flexible to the needs of its patients.
A potential entrant would be a company who has experience in this field and is able to
get the financing needed to build the facility. It would preferably have a name that its future
patients recognize and associate with good healthcare. Existing firms in the industry would be
affected by this new company because it will undoubtedly take potential patients away.
However, due to the requirements of filing a CON with the state government, it allows for other
companies to keep that company from coming to market.
16. 12
Firms in other industries offering substitute products
There are always going to be substitute products in the healthcare industry because it is very
competitive, and there are many products that HealthSouth has that other companies have as well
(Standard & Poor’s, 2009). HealthSouth has a variety of different services it offers in order to
stay on level with everyone else, and they are constantly trying to improve these services in order
to keep their customers on board with them (HealthSouth, 2009). Since the economy is not doing
as well right now, price if a huge factor because not a lot of people are able to afford healthcare.
HealthSouth has very strong competition and that is why it is important for them to stay on top.
Supplier bargaining power
Some of HealthSouth’s biggest suppliers are Healthcare Realty Trust Incorporated,
Edgewater Technology Inc. and Nationwide Health Properties Inc (Mergent Horizon 2009).
Healthcare Realty Trust Incorporated supplies HealthSouth with properties for its outpatient
services and Nationwide Health Properties Inc supplies the senior housing, long-term care
properties and medical office buildings (Mergent Horizon 2009). Information technology utilized
by HealthSouth is supplied by Edgewater Technology Inc., the technology is used to optimized
performance at each location (Mergent Horizon 2009). Suppliers of labor include therapists,
nurses and office staff (HealthSouth 2009). Suppliers such as Nationwide Health Properties Inc.
and Healthcare Realty Trust Incorporated hold less power over its buyers than the suppliers of
labor and technology can. With the drastic need for more nurses in the healthcare industry, the
labor force in this industry holds considerable power. In addition to the labor force, the providers
of innovative technology used in HealthSouth facilities are not easy to replace, see the list of
subsidiaries in Appendix 12. The strength of suppliers in this industry seem to be strong to
moderate depending on which type of supplier is being investigated.
17. 13
Buyer bargaining power
The primary buyers of the industry are private insurance companies and the government
sponsored programs Medicare and Medicaid. According to National Health Expenditure (NHE)
data from the Centers for Medicare & Medicaid Services (CMS), government sources financed
46% of all health care spending in 2007 (Standard & Poor’s, 2009). This number will only
increase in the future as the population continues to age and baby boomers, roughly 77 million
Americans, become eligible for Medicare. The CMS Office of the Actuary predicts that
government sources will fund about 51% of the projected $4.4 trillion in domestic healthcare
expenditures in 2018 (Standard & Poor’s, 2009). The government can also control the rates at
which it reimburses health care providers who care for Medicare and Medicaid recipients. These
factors give the U.S. government a huge influence on quality standards and treatment options,
and result in strong buyer power.
Driving Forces (PESTLE) Analysis
Political
With the introduction of the controversial healthcare bill by President Obama, it seems as
though the political driving force has become the most influential force on the healthcare
industry. The new healthcare bill stands to drastically change how the industry does its business
by giving the government substantial power to compete with private insurance companies
(Access World News 2009). With the introduction of this bill has come much skepticism and
debate, which has led to two strong opposing views on the subject. The president has attempted
to bring both sides together in an effort to create a united front to revolutionize the healthcare
industry; however his attempts have been to no avail (Xinhua 2009). The Republicans and
Democrats have not shown any willingness to negotiate on terms of the new bill, which has
18. 14
stalled chances of its implementation in the near future. The reality of the situation is that some
sort of healthcare reform will be passed in the not too distant future but due to the current
instability, no one can predict when the bill will actually pass into law. HealthSouth must do the
necessary research and planning to prepare for the future healthcare reform. More analysis is
shown in Appendix 13.
Social
Socially, there is a cry for help when it comes to affordable healthcare. Because the U.S.
economy is in such a recession, and because the unemployment rate is rising, many Americans
cannot afford healthcare. The unemployment rate in the U.S., up until 2007, was fairly stable.
According to S&P however, “between October 2008 and March 2009, the nation’s employment
situation only worsened, as an additional 3.7 million people became unemployed, further
increasing the ranks of those potentially losing healthcare coverage (Standard & Poor’s 2009).”
The demand for affordable healthcare is high mainly because of unemployment, but many people
just can’t afford it. “In 2007, 46.6 million people had no health insurance—a decrease of 1.3
million from 2006 (Standard & Poor’s 2009).”
Economic
Economically, the healthcare industry has been struggling in recent years with the decline
of economic activity within the U.S. Due to this recession, more people will file for
unemployment and businesses will have to cut costs. But health insurance companies keep
raising their prices while workers wages don’t rise by much. “The amount employees paid for
family coverage rose 30 percent, while their incomes rose by three percent (The Joint,2008),”
and not only that but, “[o]verall, 2.4 million fewer people have private health insurance, a drop
19. 15
of six percent (The Joint 2008)” in 2008 from 2007. See Appendix 11 for a look at the increasing
unemployment rate.
Technological
Technologically, many firms within the industry must be able to stay afloat with the
technological advances to be able to prevent or treat patients. “With a well-funded biotechnology
industry, new technologies are constantly being created with the hope of creating a new disease
market or need (The Joint 2008).” However, this does cause care for concern. With the
implementation of new technologies the industry raises its costs and therefore its overall price.
Also, “Technologies that are not integrative with other technologies add very little value to the
patient’s care and the health care worker’s practice (The Joint 2008).” But, firms in the industry
must buy into the advances in technology in order to compete.
Legal
With the rise in fraud cases with in the healthcare industry there is cause for concern on
whether to attend for-profit organizations. “Columbia/HCA — the largest hospital firm — paid a
$1.7 billion settlement for overbilling Medicare last year. Tenet — the second largest — paid a
half a billion dollars to settle fraud and abuse charges in the 1980’s (when the firm was known as
NME) and is under investigation again for massive billing fraud, and performing hundreds of
unnecessary heart operations. And HealthSouth — which dominates the rehab hospital market —
just admitted to $3.4 billion in fraudulent accounting. In each case, the CEO who presided over
the fraud was forced out (Devereaux, PJ. Et al., 2004).” With the rise in damages awarded for
malpractice suits, many healthcare organizations have begun turning away patients simply to
reduce the risk of future lawsuits (Loguercio 2009). President Obama has begun talks to attempt
to reform malpractice laws, but only after the new healthcare bill is passed (Arnst 2009).
20. 16
Unfortunately for healthcare facilities, the new healthcare bill would only reduce healthcare costs
by about 2.3% (Arnst 2009).
Key Success Factors
It’s important in the healthcare industry to have the best staff a company is able to
acquire to care for their patients. HealthSouth has a talented workforce compiled of the most
skilled physicians in the industry. Their chief medical officer, Dexanne Clohan, is ranked
number 13 in Modern Healthcare Magazine’s annual list of the 50 Most Powerful Physician
Executives (Modern Healthcare 2009). National recognition of staff, as seen above with
HealthSouth, is good publicity to ensure the firm’s patients that they are striving to be the best in
the industry.
Most firms in the healthcare industry are large, national companies that operate several
types of facilities. HealthSouth is no exception. They are a national company that operates in 26
states (HealthSouth, 2009). HealthSouth operates “93 inpatient rehabilitation hospitals, six
freestanding long term care hospitals, 49 outpatient rehabilitation satellites (operated by its
hospitals), and 25 licensed, hospital-based home health agencies. They also manage eight
inpatient rehabilitation units, and one outpatient satellite through management contracts.”
(Mergent Bus. Summary). It is important to any firm in the healthcare industry to have a large
presence in the market and by having a high number of facilities to service patients, they are able
to gain this market presence that will attract new patients in the future.
Size is a major factor to the healthcare industry. HealthSouth has many locations, but are
located mainly in Alabama, Florida, Pennsylvania, Tennessee and Texas (Mergent Online). As
stated above, most firms in this industry are national companies that have a similar profile to
HealthSouth.
21. 17
Competitor Analysis
Strategic Group Map
The healthcare industry can be broken down into a few key categories: geographic reach,
variation of services and the size of the organization. The firms recognized to be competitors
with HealthSouth include U.S. Physical Therapy, Health Management Associates, and Hanger
Orthopedic Group. These firms are in a tight niche within the industry but also have a little
competition from firms such as LCA vision and Psychiatric Solutions. Although HealthSouth
does not operate in every state, they have a large presence across the nation and are therefore
considered national. The Strategic Group map can be found in Appendix 14.
Compared to HealthSouth, U.S. Physical Therapy
U.S. Physical Therapy
(USPH, 2009) is probably its biggest
competitor, specializing in outpatient physical therapy facilities including pre- and post-
operational therapy and treatment, as well as, sports injuries, preventative care and neurological
injuries (Mergent, 2009). USPH’s strategy looks to be the participation of specialized therapists
to work with patients while opening new clinics to help lower costs and to use great marketing
and management to compete in the healthcare industry (USPH, 2009)
USPH owns a 1% general partnership through its subsidiaries but also has limited
partnerships that help them own from 50 to 99% of some clinics
.
(USPH, 2009). By doing this
each subsidiary is allowed to great governmental benefits as well as centralized support systems
and management teams. This is a great strength in that it allows them to keep their costs low by
implementing the support systems and management teams. This money they save allows them to
make their facilities less institutionalized and more aesthetically pleasing. USPH is capable of
22. 18
increasing their facilities by acquiring and developing new clinics allowing them to increase their
profits. Financials and evaluation of USPH can be found in Appendix 15.
Tenet Healthcare Corporation is an investor-owned health care services company that
operates general hospitals and related health care facilities. Tenet currently ranks as the second
largest U.S. for-profit hospital manager. At December 31, 2008, it owned or operated 53
hospitals (including three hospitals not yet divested but classified as discontinued operations),
with 14,352 licensed beds. The largest concentrations of hospital beds were in California, Florida
and Texas (Standard and Poor 2009). THC also owns and operates a small number of
rehabilitation hospitals, a specialty hospital, skilled nursing facilities, and medical office
buildings located on or near the general hospital properties. Financials and evaluations of Tenet
Healthcare can be found in
Tenet Healthcare Corporation
Appendix 16.
In January 2003, Tenet was sued by the U.S. Justice Department for allegedly submitting
false claims to Medicare. In June 2006, Tenet and the U.S. Department of Justice reached an
agreement to settle the ongoing investigation into Medicare outlier billing. The company agreed
to pay $725 million over a period of four years, plus interest, and to waive its right to collect
$175 million in Medicare payments for past services. In addition to this the Securities Exchange
Commission is investigating the financial disclosures of Tenet regarding their Medicare outlier
payments (Standard and Poor’s 2009). This lawsuit seriously hurt Tenets business, and will
continue to negatively affect them in the future. In Appendix 17, there is a competitor overview,
showing the differences between HealthSouth and its major competitors.
Industry Attractiveness
23. 19
According to the Industry Attractiveness Summary Matrix, found in Appendix 18, it is
attractive for HealthSouth Corp. to remain in this industry. They scored 6.08 out of a possible 10
in the matrix. The effect of driving forces on profitability seems to be among the most important
of the attractiveness measures. The driving forces of the industry touch on so many levels that
can affect the profitability of the firm. This factor was given a weight of 20% in the matrix with a
score of 1.8 for HealthSouth Corp. Since technology is constantly improving, this forces firms to
keep up to date with the latest innovations (HealthSouth, 2007). Industry profitability is also an
important attractiveness measure. It was given a weight of 20% in the matrix. Industry growth
potential is important for HealthSouth because they are involved in many different levels of
healthcare, such as inpatient/outpatient rehabilitation, long term acute care and home health
(HealthSouth, 2007). This attractiveness measure was given 20% in the matrix. Intensity of
competition is important to HealthSouth in order to stay ahead of the competition by always
improving and expanding their services. It was given a weight of 15%. Regulatory issues and
buyer demand were both given a weight of 10%. It is important to keep buyer demand up and
that the pertinent regulatory issues are complied with. Industry overcapacity was given a weight
of .5% because of the amount of financial strength it takes to even enter this industry.
A major opportunity in the industry is the constant increase and improvement in
technology. New procedures and less invasive methods of performing surgeries are constantly
coming out. HealthSouth tries to be at the forefront of these new technologies while still
providing low cost healthcare. Since HealthSouth is a national company, they are poised to
expand not only nationally, but internationally. They operate in 26 states and also in Puerto Rico,
which would make it easier for them to expand (HealthSouth 2009).
24. 20
There are several threats to this industry. One of the largest is the proposed healthcare
reform. Healthcare reform is in the future, so HealthSouth will need to be prepared to face this. It
will change the way all firms in the healthcare industry operate. Another threat to the industry is
the lack of qualified nurses available. HealthSouth needs to figure out how to attract nurses to
their industry (Standard & Poor’s 2009). The current recession is also a threat for the healthcare
industry. With many employees losing their jobs, and consequently their health benefits, more
people are unable to get the quality healthcare they need. The final threat indentified is new
entrants into the industry. Although it is very difficult to enter this industry, the threat is still
there. Large healthcare companies can easily open new hospitals or rehabilitative centers
anywhere in the country. See the opportunities and threats matrix in Appendix 19 for more
analysis.
25. 21
Appendix 1
Segmented Sales
Additional information regarding our operating results for the years ended December 31, 2008, 2007, and
2006 is as follows:
For the Year Ended December 31,
2008 2007 2006
(In Millions)
Net patient revenue—inpatient $ 1,659.5 $ 1,544.0 $ 1,482.9
Net patient revenue—outpatient and other revenues 182.9 193.5 212.6
Net operating revenues $ 1,842.4 $ 1,737.5 $ 1,695.5
The revenues for the segmented financials decline from 2006 to 2008 in the outpatient
sector, while in the inpatient sector they are rising. This is due to the amount of outpatient,
surgical, and diagnostic facilities that HealthSouth sold off. “[They] closed the transaction to sell
[their] surgery centers division to ASC Acquisition LLC (“ASC”) on June 29, 2007, other than
with respect to certain facilities in Connecticut, Rhode Island, and Illinois for which approvals
for the transfer to ASC had not yet been received as of such date. [They also] closed the
transaction to sell [their] outpatient division to Select Medical on May 1, 2007, other than with
respect to certain facilities for which approvals for the transfer to Select Medical had not yet
been received as of such date. [Finally, they] closed the transaction to sell [their] diagnostic
division to The Gores Group on July 31, 2007, other than with respect to one facility for which
approval for the transfer had not yet been received as of such date (HealthSouth, 2009).” By
eliminating some of their outpatient facilities, it allowed HealthSouth to turn more resources
towards their inpatient facilities to help raise revenues.
Source: HealthSouth Corp. (2009). Investors: Financial Data: Form 10-K. Retrieved September
28, 2009 from http://investor.healthsouth.com/secfiling.cfm?filingID=1442643-09-12
26. 22
Appendix 2
Sales and Stock Price Tracking
The stock prices gradually seem to decline, while the S&P 500 index seems to increase.
Up until the end of 2008 when the stock prices drop drastically when the recession kicked in
causing the market index to fall as well. However, with the introduction of a government
intervention into the healthcare industry, the prices seem to be rising in 2009. The hope that the
healthcare bill will pass through Congress has people more interested in the healthcare industry,
which is why the volume increases drastically in the beginning of 2009.
Source: Standard & Poor’s (2009). HealthSouth. Company Chart. Retrieved October 26, 2009
from http://0-
www.netadvantage.standardandpoors.com.library.coastal.edu/NASApp/NetAdvantage/cp/compa
nyChart.do
27. 23
Appendix 3
Timeline
1984 Jan.: Richard Scrushy, vice president of Lifemark Corp., a health care management
business, convinces four of his colleagues to leave their positions and help him establish Amcare
Inc. in Birmingham, Alabama. Scrushy sees a niche in the healthcare industry which he plans to
fill "with high-quality hospital-type rehabilitative services in a low-cost setting."
1984 Jan.: Many in the health care and insurance industries are recognizing that rehabilitation
can reduce medical expenses by taking the place of unnecessary, costly surgery and by helping
injured employees return to their jobs more quickly.
1985 May: Amcare changes its name to HealthSouth. By offering rehabilitative services in a
setting that more closely resembles a health club than a traditional hospital rehabilitation center,
and by employing trained physical therapists, HealthSouth facilities quickly attract the attention
of doctors and patients alike.
1985: Sales total $5 million. Several centers are in operation, and they are designed to offer
general outpatient rehabilitation services.
1986: Dr. Scott Burke, a spinal rehabilitation specialist based in Denver, Colorado, asks
HealthSouth to put together a protocol to treat back problems. The company complies with a
four-week program that utilizes stretching, aerobic exercise, anatomy instruction and work
simulation training for a reasonable price of $3,700.
1988: HealthSouth operates 21 outpatient complexes, 11 inpatient units, and seven rehabilitation
equipment centers in 15 states. Sales reach $75 million, growing at rate of 100% annually.
1989 Dec.: The firm enters the sports rehabilitation market with the $21 million purchase of a
general hospital in Birmingham that specializes in orthopedic surgery and sports medicine. The
success of the acquisition eventually prompts HealthSouth to establish a sports division with
separate facilities and well known specialists who treat celebrities like Bo Jackson and Charles
Barkley.
1989: Sales jump to $114 million. HealthSouth continues to purchase other health care and
rehabilitation companies and covert them to into HealthSouth operations.
1990: Sales grow to $181 million.
1991: Net income reaches $22 million.
1992: HealthSouth is second only to Continental Medical Systems, Inc. in the U.S. rehabilitative
services market. The two companies announce plans to merge into a $2 billion organization, but
HealthSouth eventually backs out of the deal.
28. 24
1993 Dec.: The firm acquires National Medical Enterprises Inc., gaining 31 inpatient
rehabilitation centers and 12 outpatient units. HealthSouth now operates 171 outpatient facilities.
1993: Sales climb to $575 million as HealthSouth overtakes Continental Medical Systems as the
leading rehabilitative services concern in the U.S.
1994 Sept.: Purchases ReLife Inc., a rehabilitation services company with 31 inpatient centers
and 12 outpatient units.
1994: Sales exceed $1 billion for the first time.
1995 Feb.: After acquiring the inpatient rehabilitation hospital division of NovaCare Inc.,
HealthSouth operates 425 facilities in 33 states. The company diversifies into outpatient surgery
services with the purchase of Surgical Health Corp.
1995 Oct.: The purchase of Caremark International's rehabilitation services operations for $127
million in cash secures for HealthSouth roughly 40% of the U.S. rehabilitation services market.
Outpatient facilities in operation now total 440.
1995: HealthSouth buys Diagnostic Health Corp., an outpatient imaging business. After market
value jumps 297% to $5.48 billion, Forbes lists HealthSouth as fourth in its ranking of the fastest
growing companies in the U.S.
1996 Jan.: The firm operates 850 facilities in 45 states.
1996 Dec.: Acquisitions continue with the purchase of ReadiCare, Inc. HealthSouth is the only
health care company in the U.S. to operate in all 50 states.
1997 Jan.: Stock splits two-for-one.
1997 Nov.: Shareholders and the Federal Trade Permission grant approval for HealthSouth's
$1.7 billion buyout of Horizon/CMS Healthcare Corp. HealthSouth Rehabilitation Corp. is now
the largest inpatient rehabilitation hospital operator in the U.S. The company then begins
divesting the non-core assets of Horizon/CMS.
1998: HealthSouth acquires National Surgery Centers Inc. for $590 million, and pays $500
million to purchase 33 ambulatory surgery centers from Columbia/HCA Healthcare Corp.
1999: HealthSouth sells its medical staffing unit to an investment group, and acquires the
American Rehability Services division of Mariner Post-Acute Network, Inc. HealthSouth
abandons its plan to divide into two independent companies by spinning off its inpatient
operations.
2000: HealthSouth forms an alliance with MedCenter Direct.com Inc., a start-up health care
eprocurement firm.
29. 25
2001: GNC and HealthSouth agree to jointly create a line of vitamins and other nutritional
supplements.
2002: Allegations of accounting fraud at HealthSouth surface. CEO Richard Scrushy is fired and
replaced by finance chief William Owens, who is also later indicted. The firm reveals its intent to
spin off its outpatient surgery centers as an independent public company. Losses for the year
total $270.1 million.
2003: The U.S. Securities and Exchange Commission (SEC) accuses the firm of overstating
earnings by roughly $2.5 billion between 1997 and 2002. A total of 11 former executives,
including William Owens, are charged with filing false information with the SEC and conspiracy
to commit fraud. Prosecutors also launch a criminal investigation of Scrushy
2003: Struggling with a massive debt load, HealthSouth nears bankruptcy. The firm is delisted
from the New York Stock Exchange.
2004 Dec.: By now, a total of 17 indictments have been handed down by federal prosecutors.
Scrushy is the only defendant to maintain his innocence.
2004: Losses for the year total $175 million on revenues of $3.7 billion.
2005 Jan.: The trial against Scrushy begins. He is charged with leading a $2.7 billion accounting
fraud while at the helm of HealthSouth.
2005 May: After closing arguments in the Scrushy trial are completed, the jury begins
deliberations
2005 June: Jurors are unable to reach a decision, and Scrushy is acquitted.
2005 Dec.: William Owens is sentenced to five years in prison. Scrushy files a breach of contract
suit against HealthSouth for firing him before his contract was set to expire.
2006: The company announces it will divest its surgery centers, diagnostic division, and
outpatient rehabilitation clinics and focus more on inpatient care.
2006: Former outpatient division controller Hannibal "Sonny" Crumpler is sentenced to eight
years in federal prison for accounting fraud.
2006: A Jefferson County Circuit Court judge orders former CEO Richard M. Scrushy to repay
more than $47.8 million in bonuses to the company.
2007: HealthSouth pursues plans to reduce debt by roughly $3.3 billion and become a post-acute
healthcare services provider.
2007 Jan.: In a $245 million deal with Select Medical Corp., HealthSouth announces the sale of
its outpatient rehabilitation division, which is comprised of 600 rehab centers in 35 states.
30. 26
2007 Mar.: The investment firm TPG agrees to buy the firm's surgery division for $945 million.
2007 May: Los Angeles-based The Gores Group snaps up the company's diagnostic arm in a
$47.5 million deal.
2007 June: HealthSouth agrees to sell its 200,000-square-foot Alabama to Dallas, Tex.-based
Trammell Crow.
2007 June: HealthSouth is named to the Russell 3000 Index.
2008 Apr.: In a new deal, Birmingham, Ala.-based Daniel Corp. acquires the company's campus
for $43.5 million.
2008 Apr.: In a deal with The Mediplex/Cumberland Rehabilitation Limited Partnership, the
company agrees to acquire The Rehabilitation Hospital of South Jersey in Vineland, N.J.
2008 Apr.: Approval for the construction of a Rehabilitation Hospital in Loudoun County, Va.,
is received.
2008 Aug.: In a deal with Columbia Medical Center of Arlington Subsidiary L.P., HealthSouth
acquires a 30-bed inpatient rehabilitation unit at the Medical Center of Arlington in Texas.
2008 Sept.: Midland, Tex.-based Rehabcare Rehabilitation Hospital is acquired.
2008 Oct.: The company breaks ground on HealthSouth East Valley Rehabilitation Hospital in
Mesa, Ariz.
Source: Mergent. (2009). HealthSouth: History. Retrieved September 22 from Mergent
Online database.
31. 27
Appendix 4
HealthSouth’s Board of Directors
Jon F. Hanson, Chairman
Mr. Hanson is the chairman and founder of The Hampshire Companies and has over
50 years of experience in the real estate industry. Mr. Hanson was named non-
executive Chairman of the Board of HealthSouth, effective October 1, 2005. From
1994 through 2005, Mr. Hanson served as chairman of the National Football
Foundation and College Hall of Fame, Inc. He now serves as chairman emeritus.
Since 1991, Mr. Hanson has served as a director, and now serves as the lead director,
of Prudential Financial Corp. He also served for 20 years as a director, and now
serves as an honorary director, of the Hackensack University Medical Center. Mr.
Hanson currently serves as chairman of the board of Pascack Community Bank and
as a director of Yankee Global Enterprises.
Edward A. Blechschmidt
Mr. Blechschmidt was chief executive officer for Novelis, Inc. from December 2006
to May 2007. He was chairman, chief executive officer and president of Gentiva
Health Services, Inc., a leading provider of specialty pharmaceutical and home
health care services, from March 2000 to June 2002. From March 1999 to March
2000, Mr. Blechschmidt served as chief executive officer and a director of Olsten
Corporation. He served as president of Olsten Corporation from October 1998 to
March 1999. He also served as president and chief executive officer of Siemens
Nixdorf Americas and Siemens’ Pyramid Technology from July 1996 to October
1998. Prior to Siemens, he spent more than 20 years with Unisys Corp., including
serving as its chief financial officer. Mr. Blechschmidt currently serves as a director
of Lionbridge Technologies, Inc., Columbia Laboratories, Inc., Diamond Foods,
Inc., and VWR International, LLC.
John W. Chidsey
Mr. Chidsey is the chairman of the board of Burger King Holdings, Inc. and has
served as chief executive officer and a member of its board of directors since April
2006. From September 2005 until April 2006, he served as president and chief
financial officer. He served as president, North America, from June 2004 to
September 2005, and as executive vice president, chief administrative and financial
officer from March 2004 until June 2004. Prior to joining Burger King, Mr. Chidsey
served as chairman and chief executive officer for two corporate divisions of
Cendant Corporation: the Vehicle Services Division that included Avis Rent A Car,
Budget Rent A Car Systems, PHH and Wright Express and the Financial Services
Division that included Jackson Hewitt and various membership and insurance
companies. Prior to joining Cendant, Mr. Chidsey served as the director of finance
of Pepsi-Cola Eastern Europe and the chief financial officer of PepsiCo World
Trading Co., Inc. Mr. Chidsey currently serves on the Board of Trustees for
Davidson College in Davidson, North Carolina. Mr. Chidsey is a certified public
accountant and a member of the Georgia Bar Association.
32. 28
Donald L. Correll
Mr. Correll is president and chief executive officer of American Water Works
Company, Inc., the largest and most geographically diversified provider of water
services in North America. Between August 2003 and April 2006, Mr. Correll
served as president and chief executive officer of Pennichuck Corporation, a publicly
traded holding company which, through its subsidiaries, provides public water
supply services, certain water related services, and certain real estate activities,
including property development and management. From 1991 to 2001, Mr. Correll
served as chairman, president and chief executive officer of United Water
Resources, Inc., a water and wastewater utility company. Prior to 1991, Mr. Correll
spent nearly 15 years with United Water, including serving as its chief financial
officer. From 2001 to 2003, Mr. Correll served as an independent advisor to water
service and investment firms on issues relating to marketing, acquisitions, and
investments in the water services sector. Mr. Correll served as a director of
Interchange Financial Services from 1994 to 2007 and currently serves as a director
and Audit Committee member of New Jersey Resources Corporation. Mr. Correll
currently serves as a member of the USEPA Environmental Financial Advisory
Board.
Yvonne M. Curl
Ms. Curl is a former vice president and chief marketing officer of Avaya, Inc., which
position she held from October 2000 through April 2004. Before joining Avaya, Ms.
Curl was employed by Xerox Corporation beginning in 1976, where she held a
number of middle and senior management positions in sales, marketing and field
operations, culminating with her appointment to corporate vice president. Ms. Curl
currently serves as a director of Nationwide Mutual Insurance Company, Charming
Shoppes, Inc., and Welch Allyn, Inc.
Charles M. Elson
Mr. Elson holds the Edgar S. Woolard, Jr. Chair in Corporate Governance and has
served as the director of the John L. Weinberg Center for Corporate Governance at
the University of Delaware since 2000. Mr. Elson has served on the National
Association of Corporate Directors’ Commissions on Director Compensation,
Executive Compensation and the Role of the Compensation Committee, Director
Professionalism, CEO Succession, Audit Committees, Governance Committee,
Strategic Planning, and Director Evaluation. He was a member of the National
Association of Corporate Directors’ Best Practices Council on Coping with Fraud
and Other Illegal Activity and he presently serves on that organization’s Advisory
Council. In addition, Mr. Elson serves as vice chairman of the American Bar
Association’s Committee on Corporate Governance and was a member of the
American Bar Association’s Committee on Corporate Laws. Mr. Elson has been Of
Counsel to the law firm of Holland & Knight LLP from 1995 to the present.
Jay Grinney
Mr. Grinney was named president and chief executive officer on May 10, 2004.
From June 1990 to May 2004, Mr. Grinney served in a number of senior
33. 29
management positions with HCA, Inc., or its predecessor companies, in particular,
serving as president of HCA’s Eastern Group from May 1996 to May 2004,
president of the Greater Houston Division from October 1993 to April 1996 and as
chief operating officer of the Houston Region from November 1992 to September
1993. Before joining HCA, Mr. Grinney held several executive positions during a
nine year career at the Methodist Hospital System in Houston, Texas.
Leo I. Higdon, Jr.
Mr. Higdon has served as president of Connecticut College since July 1, 2006. He
served as the president of the College of Charleston from October 2001 to June
2006. Between 1997 and 2001, Mr. Higdon served as president of Babson College in
Wellesley, Massachusetts. He also served as dean of the Darden Graduate School of
Business Administration at the University of Virginia. His financial experience
includes a 20-year tenure at Salomon Brothers, where he became vice chairman and
member of the executive committee, managing the Global Investment Banking
Division. Mr. Higdon also serves as a director of Eaton Vance Corp.
John E. Maupin, Jr.
Dr. Maupin is president and chief executive officer of the Morehouse School of
Medicine located in Atlanta, Georgia, a position he has held since July 2006. Prior to
joining Morehouse, Dr. Maupin held several other senior administrative positions
including president and chief executive officer of Meharry Medical College from
1994 to 2006, executive vice president and chief operating officer of the Morehouse
School of Medicine from 1989 to 1994, chief executive officer of Southside
Healthcare, Inc. from 1987 to 1989, and Deputy Commissioner of Health of the
Baltimore City Health Department from 1984 to 1987. Dr. Maupin currently serves
as a director of LifePoint Hospitals, AIG Retirement Companies, and Regions
Financial Corp.
L. Edward Shaw, Jr.
Since March 1, 2006, Mr. Shaw has served as a senior managing director of Richard
C. Breeden & Co., or affiliated companies engaged in investment management,
strategic consulting, and governance matters. From September 2004 to January
2006, Mr. Shaw was Of Counsel with the international law firm of Gibson Dunn &
Crutcher LLP. From January 1, 2004 to September 15, 2004, Mr. Shaw practiced
law as a sole practitioner and served as Independent Counsel to the Board of
Directors of the New York Stock Exchange on regulatory matters. From May 1999
to December 2003, Mr. Shaw served as general counsel of Aetna, Inc., one of the
leading providers of health and group insurance benefits in the United States. Mr.
Shaw also served as an executive vice president and member of the Office of the
Chairman of Aetna from September 2000 to December 2003. Mr. Shaw also
currently serves as a director of H & R Block, Inc., Mine Safety Appliances Co., and
Covenant House, the nation's largest privately funded provider of crisis care to
children.
Healthsouth Corp. (2009) Healthsouth Leadership: Board of Directors. Retrieved September 23,
2009 from healthsouth.com
34. 30
Appendix 5
Committee Structure
Below is a summary of the committee structure and its members.
Audit
Committee
Compensation
Committee
Compliance/
Quality of
Care
Committee
Finance
Committee
Nominating/
Corporate
Governance
Committee
Number of Meetings in 2008: 6 6 4 9 5
Edward A. Blechschmidt Chair
John W. Chidsey X
Donald L. Correll X Chair
Yvonne M. Curl X X
Charles M. Elson Chair
Jon F. Hanson X X
Leo I. Higdon, Jr. Chair X
John E. Maupin, Jr. Chair X
L. Edward Shaw, Jr. X X
Source: Healthsouth Corp. (2009). Investors: Financials: Definitive Proxy Statement. Retrieved
September 28, 2009 from http://investor.healthsouth.com/secfiling.cfm?filingID=1193125-09-
71683
35. 31
Appendix 6
HealthSouth’s Executive Management Team
Jay Grinney
President and Chief Executive Officer
Jay Grinney was named President and Chief Executive Officer of HealthSouth Corporation on
May 3, 2004. Mr. Grinney has an extensive background in the healthcare industry. Prior to
joining HealthSouth, he served as President of Hospital Corporation of America’s (HCA)
Eastern Group, which employs more than 65,000 people and consists of 91 hospitals located in
10 states with annual net revenues of $10.5 billion. In his tenure with HCA, he also served as
President of the Greater Houston Division and Chief Operating Officer of the Houston Region.
Before joining HCA, Grinney held several executive positions during his nine-year career at the
Methodist Hospital System in Houston. After receiving a bachelor’s degree from St. Olaf
College in Northfield, Minn., Grinney earned both an M.B.A. and an M.H.A. from Washington
University in St. Louis, Mo.
John L. Workman
Executive Vice President and Chief Financial Officer
Mr. Workman was named Executive Vice President and Chief Financial Officer on Sept. 20,
2004. From 1998 to 2004, Mr. Workman served in various management and executive capacities
with U.S. Can Company, including serving as its Chief Financial Officer from 1998 to 2002, as
its Chief Operating Officer from 2002 to 2003, and as its Chief Executive Officer from 2003 to
2004. Prior to joining U.S. Can Company, Mr. Workman was employed by Montgomery Ward
& Company, Inc. for 14 years, where he held several management and executive positions,
including General Auditor, Chief Financial Officer and Chief Restructuring Officer. Mr.
Workman began his career in public accounting, and was a partner with the public accounting
firm KPMG.
Mark J. Tarr
Executive Vice President, Operations
Mr. Tarr was named Executive Vice President of Operations on August 1, 2007, having served
as President of our Inpatient Division since September of 2004. Mr. Tarr joined us in 1993, and
has held various management positions with us, including serving as a Senior Vice President
with responsibility for all inpatient operations in Texas, Louisiana, Arkansas, Oklahoma, and
Kansas from 1997 to 2004, as Director of Operations of our 80-bed rehabilitation hospital in
Nashville, Tenn. From 1994 to 1997, and as Chief Executive Officer/Administrator of our 70-
bed rehabilitation hospital in Vero Beach from 1992 to 1994.
John P. Whittington
Executive Vice President, General Counsel and Secretary
John P. Whittington was named Executive Vice President, General Counsel and Corporate
Secretary on October 19, 2006, having served in the same position in an interim role since July
26, 2006. Prior to joining HealthSouth, Whittington was a partner of Bradley Arant Rose &
White LLP, a regional law firm based in Birmingham, Ala. He has been a practicing attorney for
almost 35 years, representing parties in complex business reorganization cases. Since 1990,
36. 32
Whittington has served as adjunct professor at Cumberland School of Law at Samford University
and he is a member of the Birmingham Bar Association, the Alabama State Bar and co-chair of
the ABA sub-committee on Financial Institution Litigation. He is a graduate of Guilford College
and received his J.D. from Cumberland School of Law.
HealthSouth’s Senior Management Team
Mary Ann Arico
Senior Vice President, Investor Relations and Corporate Communications
Mary Ann was named HealthSouth’s Senior Vice President of Investor Relations and
Communications in August 2008. Prior to joining HealthSouth, she served as Director of
Investor Relations at Mirant Corporation (NYSE: MIR), an Atlanta-based energy company. A
graduate of Pepperdine University with a bachelor’s degree in business management, Mary Ann
previously served as Director of Investor Relations at Duke Energy from 2002-2006 and
Eastman Chemical Company from 1998 until 2002. Prior to her investor relations position at
Eastman Chemical, she held a variety of operations and staff positions beginning in 1983.
Christine Bachrach
Senior Vice President and Chief Compliance Officer
Christine Bachrach is Senior Vice President and Chief Compliance Officer. Christine has been
with HealthSouth’s Compliance Department since March 2004. Prior to joining HealthSouth,
Christine was a principal at Navigant Consulting where she specialized in compliance program
implementation, investigations and financial operations for all types of healthcare organizations.
Prior to Navigant, Christine was with Arthur Andersen where she assisted clients in several areas
including: government investigations, multi-district /commercial payer litigation support, and
CIA IRO activities. Christine started her career as an internal consultant for Kaiser Permanente
in Southern California and then as a managed care specialist for a large home healthcare
company. Christine’s undergraduate degree is from Rensselaer Polytechnic Institute in industrial
engineering and decision support. Christine received a master’s degree through a Graduate
Fellowship in engineering and operations research from the University of California at Berkeley.
Randy Carpenter
Senior Vice President, Chief Information Officer
Randy Carpenter was named Senior Vice President and Chief Information Officer in May 2003.
He joined HealthSouth in October of 2000 as Vice President and Associate Chief Information
Officer. Randy has also served in other healthcare roles including Corporate Chief Information
Officer for 18 acute care hospitals in Hampton, Va.; Chief Information Officer for the Air Force
Academy Hospital in Colorado Springs, Colo.; and Chief Software Development Executive for
the Medical Systems Program Management Office in Montgomery, Ala. He holds bachelor’s
degrees in computer and information systems, as well as a master’s degree in personnel
management, all from Troy State University. He also received a master’s degree in health
informatics from the University of Alabama at Birmingham (UAB).
Dexanne B. Clohan, M.D.
Senior Vice President, Chief Medical Officer
37. 33
Dexanne B. Clohan, M.D., a board-certified physical medicine and rehabilitation physician, was
named HealthSouth’s Chief Medical Officer in April 2006. Prior to joining HealthSouth,
Dexanne acted as a Medical Director for several well-known organizations including Aetna, Inc.,
Meridian Health Care Management, and Memorial Independent Practice Association. In
addition, she practiced medicine with Rehabilitation Associates Medical Group and served as
Director of Congressional Affairs for the American Medical Association. Dexanne received a
bachelor’s degree in social sciences, magna cum laude, from the University of Colorado; a
master’s degree in administration from The George Washington University; and a doctor of
medicine from The George Washington University School of Medicine.
Edmund Fay
Senior Vice President, Treasurer
Ed Fay joined HealthSouth in 2008 as Senior Vice President and Treasurer. Ed has more than 15
years of experience in financial services specializing in corporate development, mergers and
acquisitions, bank treasury management, fixed income and capital markets products. Prior to
joining HealthSouth, he served in various positions at Regions Financial Corporation, including
Executive Vice President of Strategic Planning/ Mergers and Acquisitions, Senior Vice President
and Senior Treasury Officer. He also has held vice president positions at Wachovia Corporation
for asset and liability management and at J.P. Morgan & Company, Inc. for global treasury and
capital management. Ed received a bachelor’s degree in business administration from Fordham
University and a master’s degree in business administration from New York University’s
Leonard N. Stern School of Business.
Jerry Gray
President, West Region
Jerry Gray is President of the West Region where he is responsible for the operations of 15
rehabilitation hospitals, one long-term acute care hospital, two transitional care units, four
outpatient centers, and eight home health agencies encompassing seven states. He has also
served as Director of Operations and Chief Executive Officer for HealthSouth Rehabilitation of
Memphis. Jerry completed his undergraduate degree in nursing at the University of Oklahoma
and earned a graduate degree in health administration from the University of Oklahoma Health
Sciences Center.
Justin Hunter
Senior Vice President of Government and Regulatory Affairs
Justin Hunter is Senior Vice President of Government and Regulatory Affairs. Justin is based in
Washington, D.C., and represents the company before Congress and the Centers for Medicare
and Medicaid Services (CMS). Prior to joining HealthSouth in 2004, Justin practiced law in the
Washington, D.C., firm of Powers, Pyles, Sutter, and Verville, where he was engaged in a
healthcare practice involving a range of legal, regulatory, and legislative issues. Justin previously
worked on Capitol Hill for former Congressman Ed Bryant (R-TN), and has worked in and
managed a number of grassroots and political campaigns. He also served as a legal clerk for
Memphis, Tenn.-based Methodist HealthCare during law school.
38. 34
Justin earned a bachelor’s degree in political science in 1992 from Mississippi State University
and a law degree from The University of Memphis in 2000. A native Missourian, Justin and his
wife Caroline reside in Washington,D.C with their two daughters, Helena and Vivian.
David Klementz
Senior Vice President and CFO Operations
David joined HealthSouth as Senior Vice President and Chief Financial Officer of Operations in
September of 2005. He has also served as Senior Vice President and Chief Financial Officer for
Progress Rail, a $1.3 billion rail services business, where he was responsible for strategic and
business planning, financial performance and leadership of the company’s financial, accounting
and information technology functions. He has also held the position of Manager of Business
Development and Planning for Progress Energy, Vice President of Finance and Accounting for
Analytical Sciences, Inc., and Division Controller for the Oracle Corporation. A certified public
accountant, David received his bachelor’s degree in finance from James Madison University, his
certification in procurement and contract administration from the University of Virginia, and
completed Duke University’s Fuqua School of Business’ Leadership Development Program.
Cheryl Levy
Senior Vice President, Human Resources
Cheryl Levy joined HealthSouth in March of 2007. Prior to that, she was the National Director,
Human Resources/Recruiting, for KPMG, where she advised clients in such diverse areas as
recruitment, compensation, benefits, training, development and employee relations. Prior to
joining KPMG she held senior executive human resources positions at several health services
companies including Preferred Care, a large skilled nursing facility company in Texas. Cheryl is
a member of the National Association and Birmingham Chapter of the Society of Human
Resources Management. Cheryl manages compensation, benefits, training and development,
employee and labor relations and recruiting.
Peter Mantegazza
President, Northeast Region
Peter recently was named President of the Northeast Region. In this role, he will oversee
operations for HealthSouth hospitals in the states of Pennsylvania, Massachusetts, Maine, New
Hampshire, New Jersey, Indiana and Maryland. Having worked in rehabilitation management for
30 years, Peter most recently served as Chief Executive Officer at Fairlawn Rehabilitation
Hospital, a joint venture between HealthSouth and the University of Massachusetts. He
previously served as Chief Operating Officer at Fairlawn. As an active leader in healthcare in the
Northeast, Peter serves as the Chairman of the Governing Board of HealthSouth Rehabilitation
Hospital of Western Massachusetts, as well as a Governing Board Member of HealthSouth New
England Rehabilitation Hospital of Portland Maine and the Worcester State College Foundation.
Peter holds a master’s degree in health care administration from Mt. Sinai School of Medicine,
City University of New York.
Terry Maxhimer
President, Mid Atlantic Region
39. 35
Terry Maxhimer is President of the Midatlantic Region. He joined HealthSouth in 1993 as the
Chief Executive Officer of the inpatient hospital in Kingsport, Tenn. Prior to his HealthSouth
career, he was with Medicon, a start-up inpatient rehabilitation company in West Virginia, from
1990 until 1993. He worked within a Minnesota healthcare system, serving as Chief Executive
Officer from 1985 until 1990. He also served as Chief Executive Officer for a Minnesota acute
care hospital from 1982 until 1985 and as an Assistant Administrator from 1977 until 1982.
Terry earned a bachelor’s degree in accounting and a master’s degree in healthcare
administration from the University of Minnesota.
Jim McAndrews
Senior Vice President, Tax
Jim McAndrews was named Senior Vice President of Tax in September 2005. Prior to joining
HealthSouth, Jim was a partner with Tatum CFO Partners and he also consulted with a major
mortgage finance company. From 1985 to 2003, Jim was an officer at Freddie Mac in McLean,
Va., serving as Vice President of Finance, Vice President of Corporate Tax, and Tax Counsel.
Jim began his career with Arthur Andersen in Washington, D.C. He received a bachelor’s degree
in accounting from Georgetown University, and a law degree and master’s degree of law in
taxation from The Georgetown University Law Center. He is admitted to the bar in Pennsylvania
and Virginia and is a certified public accountant.
Andy Price
Senior Vice President, Operations Accounting
Andy Price joined HealthSouth in June 2004 as Vice President of Operations Accounting. From
1996 through 2004, Andy served as Senior Vice President and Corporate Controller of
Centennial HealthCare Corp, an Atlanta-based operator of skilled nursing centers and home
health agencies. Prior to 1996, Andy was a Senior Audit Manager with BDO Seidman in Atlanta.
Andy received a bachelor’s degree in accounting from Florida State University and is a certified
public accountant.
Stephen L. Royal
Senior Vice President of Development
Steve Royal joined HealthSouth as Senior Vice President of Development in 2008. Most
recently, Steve served as President of the Hospital Corporation of America’s (HCA) East Florida
Division, which is comprised of 13 hospitals, a regional laboratory, 10 ambulatory surgery
centers and eight imaging centers. Prior to that time, he held positions as HCA’s Southwest
Florida Market President and CEO at Southwest Florida Regional Medical Center and Gulf
Coast Hospital in Ft. Myers, Fla. Steve earned a bachelor’s degree in business administration and
a master’s degree in healthcare administration from Xavier University in his hometown of
Cincinnati, Ohio. Steve is a Fellow with the American College of Healthcare Executives. He and
his wife Lana have two children, Russin and Asher.
Sandra K. Vollman
Inspector General and Senior Vice President, Internal Audit and Controls
Sandy Vollman is Inspector General and Senior Vice President, Internal Audit and Controls. She
joined HealthSouth as Senior Vice President of Finance in March 2005. Prior to HealthSouth,
she worked with U.S Can Corporation, an international manufacturer of steel packaging, from
40. 36
1999 to February 2005, where she served as Senior Vice President and Chief Financial Officer,
Senior Vice President of Finance and Vice President of Business Development. Sandy also
worked with Montgomery Ward and Co., from 1983 to 1999, where she held a number of
positions, including Vice President and Corporate Controller. She began her career with Arthur
Anderson &Co., progressing from staff Auditor to Audit Manager. Sandy graduated from
Western Illinois University with a bachelor's degree in accounting and received her certified
public accountant certification in Illinois.
Linda Wilder
President, Southeast Region
Linda Wilder is President of the Southeast Region. In this role, she oversees operations for 21
HealthSouth hospitals in Alabama, Louisiana, Florida and Puerto Rico. She has thirty years of
clinical and administrative experience ranging from patient support to regional operations
including development of new business lines in diversified organizations for university, not-for-
profit and proprietary facilities. Linda joined HealthSouth in 1994 as an Assistant Administrator.
She has also served as an Administrator, Regional Director of Operations, Area Manager,
Regional Vice President and Vice President. Prior to joining HealthSouth, Linda was
Administrative Director of Patient Services for ReLife Corporation. She holds a bachelor’s
degree from the University of Alabama in Birmingham and a master’s degree in business
administration.
Art Wilson
Senior Vice President, Real Estate
Art Wilson is the Senior Vice President of Real Estate. During his 34-year career, he spent 13
years auditing, specializing in the healthcare and insurance industries. He worked with Ernst and
Ernst in Detroit and Louisville, Ky.; and conducted auditing for Coopers and Lybrand of Tampa,
Fla., and Miami. Real estate executive positions included Vice President of Real Estate, Risk
Management Insurance Contracts and CAPEX for OrNda Healthcare in Nashville, Tenn.; Senior
Vice President of Real Estate for Mariner Post-Acute Network in Atlanta; and President of
Paramount Real Estate in West Palm Beach, Fla. Art received a bachelor’s degree in business
administration in 1971.
Rob Wisner
Senior Vice President, Reimbursement
Rob Wisner was named Senior Vice President of Reimbursement in November 2003. From 1992
to October 31, 2003, Rob served in various senior management positions with Integrated Health
Services, a leading provider of post-acute care services in Baltimore. From 1988 to 1992, he
served as a Senior Team Leader with Blue Cross Blue Shield of Maryland, a Medicare fiscal
intermediary. Rob worked for the accounting firm, Clifton, Gunderson & Company, from 1986
to 1988. He holds a bachelor’s degree in accounting. During his career, he has also served on
several healthcare association payment committees and boards.
Healthsouth Corp. (2009) Healthsouth Leadership: executive Management Team. Retrieved
September 23, 2009 from healthsouth.com
41. 37
Appendix 7
Stock Ownership of Directors
Name Share Beneficially Owned
Percent of
Class
Management
Edward A. Blechschmidt 21,845 *
John W. Chidsey 17,639 *
Dexanne B. Clohan 25,500 *
Donal L. Correll 14,096 *
Yvonne M. Curl 13,833 *
Charles M. Elson 19,856 *
Jay Grinney 1,016,167 *
Jon F. Hanson 57,843 *
Leo I. Higdon, Jr. 14,266 *
John E. Maupin, Jr. 15,898 *
L. Edward Shaw, Jr. 28,718 *
Mark J. Tarr 129,947 *
John P. Whittington 84,164 *
John L. Workman 200,538 *
All current directors and executive officers as a group (14 people) 1,660,310 1.87%
Source: HealthSouth. (2008). Annual Report. Retrieved September 15, 2009 from
http://files.shareholder.com/downloads/HLSS/725741423x0x284925/FE1A05CA-A18A-4FE0-
A0D9-706B83B052EA/87813_002_HeatlthSouth_BMK1.pdf
42. 38
Appendix 8
Beneficial Owners
Name Share Beneficially Owned
Percent of
Class
Certain Beneficial Owners
Morgan Stanley 6,979,797 7.93%
Wellington Management 6,907,560 7.85%
TIAA-CREF investment Management, LLP 6,865,216 7.80%
Lord, Abbett & Co. LLC 5,938,447 6.75%
T. Rowe Price Associates, Inc. 5,248,757 5.96%
FMR LLC 5,043,944 5.72%
Barclays Global Investors, NA 4,544,045 5.16%
Source: HealthSouth. (2008). Annual Report. Retrieved September 15, 2009 from
http://files.shareholder.com/downloads/HLSS/725741423x0x284925/FE1A05CA-A18A-4FE0-
A0D9-706B83B052EA/87813_002_HeatlthSouth_BMK1.pdf
43. 39
Appendix 9
Mission and Vision Statements
Our Mission
To be the healthcare company of choice for patients, employees, physicians and shareholders by
providing high quality care in the communities we serve.
Our Values
At HealthSouth, the cornerstone of our operations is the delivery of quality healthcare in the
most appropriate, safe, patient-centered environment.
We place primary value on:
Quality
We look to provide our patients with the finest clinicians, technology, facilities and programs
available. We do this in a safe environment, responding to the needs of our diverse patient
population, always working to achieve superior outcomes for each patient in a professional,
caring, and cooperative manner.
Integrity
We consider trust and integrity to be essential in all our relationships. We are committed to
operating our business honestly, with financial integrity, and in adherence with all federal, state
and local regulatory obligations affecting the operation of our business.
Cost-effectiveness
We are committed to providing high quality healthcare in an innovative, yet cost-effective
manner, managing our resources wisely, and responding proactively to the changes in our
industry. We seek to develop relationships with a diverse array of business partners that share
similar values and conduct business in an ethical manner.
Respect
We respect and embrace the diversity all of our employees bring to HealthSouth. We provide
opportunities for our employees’ growth and development and encourage their participation in an
open and inclusive culture. In addition, we respect our patients, physicians, shareholders,
business partners and vendors, recognizing the valuable role each of them plays in our business
and striving to communicate with them openly and honestly.
Healthsouth Corp. (2009) Mission Statement. Retrieved September 23, 2009 from
healthsouth.com
44. 40
Appendix 10
Alignment – (7 S’s)
Shared values:
The company seems focused on providing quality healthcare at affordable prices. This is
supported by HealthSouth’s vision, which touches on quality and efficient resource management
(HealthSouth, 2009).
Strategy:
HealthSouth currently operates in several different healthcare fields such as inpatient
rehabilitation hospitals, long term care hospitals, and outpatient rehabilitation satellites. (Mergent
Online) By having each hospital or rehabilitation center operating on its own, it allows the
individual company to make the best decisions when facing a problem.
Style/Staff:
The physicians at HealthSouth Corp. strive to provide the latest technologies in patient
care. The company itself emphasizes quality and efficiency, which provides a better bottom line
for all concerned parties. Having been plagued in the past with executive management scandals,
HealthSouth has completed a board transition plan to provide board members who are
independent of the company and have varied fields of expertise. They have implemented a new
culture of transparency and accountability in order to bring confidence back in their
shareholders. (HealthSouth, 2009).
Skills:
45. 41
HealthSouth focuses its skills on the rehabilitation of patients. It offers many different
lines of services from inpatient and outpatient rehabilitative services, long-term acute care
hospitals and home health (HealthSouth, 2007). “HealthSouth's [long-term care hospitals] LTCH
offer the clinical, technical and professional resources necessary to provide individualized care
that promotes progress toward recovery. Our specialized, multidisciplinary team approach to
patient care focuses on the unique needs of each patient. All patients receive 24-hour nursing and
respiratory care, as well as care by their attending physicians and specialists, as needed. Patients
also receive physical, occupational and speech therapies, as appropriate (HealthSouth, 2007).”
With multiple subsidiaries, HealthSouth “operates 93 inpatient rehabilitation hospitals
(including 3 joint venture hospitals), six freestanding long-term acute care hospitals, 49
outpatient rehabilitation satellites (operated by its hospitals), and 25 licensed, hospital-based
home health agencies
Structure:
(Mergent, 2009).” This allows HealthSouth to operate in 26 states, as well
as Puerto Rico. Their inpatient rehabilitation clinics and long term care hospitals have roughly
6,500 licensed beds, with their main hospitals located in Texas, Pennsylvania, Florida,
Tennessee, and Alabama. “In addition to HealthSouth hospitals and outpatient satellites, the
company manages eight inpatient rehabilitation units and one outpatient satellite through
management contracts (Mergent, 2009).” After the exposure of Richard Scrushy, the company
developed an integrity agreement in 2004 to make sure that the integrity of HealthSouth would
not be compromised (HealthSouth, 2004).
Systems:
46. 42
HealthSouth focuses daily on the patients that they have in their rehabilitation and long
term care hospitals. They have multiple systems in place during the rehabilitation of their
patients. “Internal case managers monitor each patient's progress and provide documentation of
patient status, achievement of goals, discharge planning, and functional outcomes” (Mergent,
2009). “These facilities provide the level of care necessary to manage a patient's care after an
injury or illness and enhance their quality of life upon discharge from a traditional acute care
setting. HealthSouth's inpatient rehabilitation hospitals provide a smooth transition from
inpatient rehabilitation to outpatient therapy (HealthSouth, 2007).”
47. 43
Appendix 11
Healthcare Industry Rates
Source: Standard and Poor's. (2009). HealthSouth. Standard & Poor's Industry surveys,
healthcare facilities. Retrieved September 15, 2009 from
http://www.netadvantage.standardandpoors.com/
48. 44
Appendix 12
HealthSouth Corp. Subsidiaries
Advantage Health Harmarville Rehabilitation Corporation
Advantage Health, LLC
AnMed Enterprises, Inc./HealthSouth, L.L.C.
BJC / HEALTHSOUTH Rehabilitation Center, LLC
Baton Rouge Rehab, Inc.
Beaumont Rehab Associates Limited Partnership
Central Arkansas Rehabilitation Associates, L.P.
CMS Development and Management Company, Inc.
CMS Elizabethtown, Inc.
CMS Fayetteville Rehabilitation, Inc.
CMS Jonesboro Rehabilitation, Inc.
CMS Rehab of WF, L.P.
Central Louisiana Rehab Associates LP
Collin County Rehab Associates Limited Partnership
Continental Medical of Kentucky, Inc.
Continental Medical Systems, Inc.
Continental Rehabilitation Hospital of Arizona, Inc.
DHC Subsidiary Dissolution Corporation
Former Surgery Holdings, LLC
Gamma Knife Center at Barnes-Jewish Hospital LLC
HCA Wesley Rehabilitation Hospital, Inc.
HealthSouth /GHS, LLC
HealthSouth Aviation, LLC
HEALTHSOUTH LTAC of Sarasota, Inc.
HealthSouth Medical Center, Inc.
HealthSouth Metro West Hospital, Inc.
HEALTHSOUTH OF HENDERSON, INC.
HealthSouth of Mechanicsburg, Inc.
HealthSouth of Phenix City, Inc.
HEALTHSOUTH OF SEA PINES LIMITED PARTNERSHIP
HEALTHSOUTH OF YORK, INC.
HEALTHSOUTH Rehabilitation Center, Inc.
HealthSouth Rehabilitation Hospital of Arlington Limited Partnership
HealthSouth Rehabilitation Hospital of South Jersey, LLC
HEALTHSOUTH Specialty Hospital, Inc.
HealthSouth Specialty Hospital of Union, Inc.
HEALTHSOUTH Sub-Acute Center of Mechanicsburg, Inc.
49. 45
HEALTHSOUTH Surgery Center of Aventura, L.P.
HEALTHSOUTH Tri-State Regional Rehabilitation Hospital Limited Partnership
HEALTHSOUTH of Altoona, Inc.
HEALTHSOUTH of Austin, Inc.
HEALTHSOUTH of Charleston, Inc.
HEALTHSOUTH of Dothan, Inc.
HealthSouth of East Tennessee, LLC
HEALTHSOUTH of Erie, Inc.
HEALTHSOUTH of Fort Smith, LLC
HEALTHSOUTH of Houston, Inc.
HEALTHSOUTH of Montgomery, Inc.
HEALTHSOUTH of Pittsburgh, Inc.
HEALTHSOUTH of Reading, Inc.
HEALTHSOUTH of San Antonio, Inc.
HEALTHSOUTH of Sewickley, Inc.
HEALTHSOUTH of South Carolina, Inc.
HEALTHSOUTH of Spring Hill, Inc.
HEALTHSOUTH of Tallahassee Limited Partnership
HEALTHSOUTH of Texarkana, Inc.
HEALTHSOUTH of Texas, Inc.
HEALTHSOUTH of Toms River, Inc.
HEALTHSOUTH of Utah, Inc.
HEALTHSOUTH of Yuma, Inc.
HEALTHSOUTH/Deaconess, L.L.C.
HEALTHSOUTH/Methodist Rehabilitation Hospital Limited Partnership
HealthSouth of Ft. Lauderdale Limited Partnership
HealthSouth of Midland, Inc.
HealthSouth of Nittany Valley, Inc.
HealthSouth of Treasure Coast, Inc.
HealthSouth Bakersfield Rehabilitation Hospital Limited Partnership
HealthSouth Meridian Point Rehabilitation Hospital Limited Partnership
HealthSouth Northern Kentucky Rehabilitation Hospital Limited Partnership
HealthSouth Rehabilitation Center of New Hampshire, Ltd.
HealthSouth Rehabilitation Hospital of Arlington Limited Partnership
HealthSouth Rehabilitation Hospital of New Mexico, Ltd.
HealthSouth Rehabilitation Hospital of Manati, Inc.
HealthSouth Rehabilitation Hospital of Odessa, Inc.
50. 46
HealthSouth Surgery Center of Baton Rouge, Inc.
HealthSouth Surgery Center of Baton Rouge, Inc.
HealthSouth Valley of the Sun Rehabilitation Hospital Limited Partnership
HealthSouth of Largo Limited Partnership
HealthSouth of Sarasota Limited
HealthSouth Provo Surgical Center Limited Partnership
HealthSouth S.C. of Charlotte, Inc.
Houston Rehabilitation Associates
Joliet Surgery Center Limited Partnership
K.C. Rehabilitation Hospital, Inc.
Kansas Rehabilitation Hospital, Inc.
Kokomo Rehabilitation Hospital, Inc.
Kokomo Rehabilitation Hospital, L.P.
Lakeshore System Services of Florida, Inc.
Lakeview Rehabilitation Group Partners
Nevada Rehabilitation Hospital, Inc.
New England Home Health Care, Inc.
New England Rehabilitation Management Co, Inc.
New England Rehabilitation Services of Central Massachusetts, Inc.
NIA of Indian River, Inc.
North County Surgery Center, L.P.
North Louisiana Rehabilitation Center, Inc.
Northwest Arkansas Rehabilitation Assoc.
Northwest Surgicare, Ltd.
NSC Connecticut, Inc.
Piedmont HealthSouth Rehabilitation, LLC
Plano Health Associates LP
Premier Ambulatory Surgery of Forest Park, Inc.
Premier Ambulatory Surgery of Tri-Valley, Inc.
Rehab Concepts Corporation
Rehabilitation Hospital Corporation Of America
Rehabilitation Hospital of Colorado Springs, Inc.
Rehabilitation Hospital of Fredericksburg, Inc.
Rehabilitation Hospital of Nevada - Las Vegas, Inc.
Rehabilitation Hospital of Nevada - Las Vegas, L.P.
Rehabilitation Hospital of Petersburg, Inc.
Rehabilitation Hospital of Phenix City, LLC
Rehabilitation Institute Of Western Massachusetts, Inc.
Romano Rehabilitation Hospital, Inc.
Rusk Rehabilitation Center, LLC
Sarasota LTAC Properties, LLC
51. 47
Saint Barnabas / HEALTHSOUTH Rehab Center LLC
San Angelo Imaging Affiliates, Inc.
Sherwood Rehabilitation Hospital, Inc.
Southeast Texas Rehabilitation Hospital, Inc.
Southern Arizona Regional Rehabilitation Hospital, L.P.
Surgicare of Joliet, Inc.
Tarrant County Rehabilitation Hospital, Inc.
Tyler Rehab Associates LP
Tyler Rehabilitation Hospital, Inc.
University of Virginia/HEALTHSOUTH, L.L.C.
Van Matre Rehabilitation Center LLC
Vanderbilt Stallworth Rehabilitation Hospital, L.P.
West Virginia Rehabilitation Hospital, Inc.
Western Medical Rehabilitation Associates, L.P.
Yuma Rehabilitation Hospital, LLC
Source: Mergent (2005). HealthSouth Corp.: Subsidiaries. Retrieved September 23, 2009 from
Mergent Online database.
52. 48
Appendix 13
PESTLE Analysis
Source of
Force
Description &
Source of
Force
Potential
Specific
Impact
Timing of Impact
(within (6 mos.,
1 yr.,
2 yrs.?)
Direction and Intensity
of Impact
(positive, negative,
Increase, unchanged,
decrease, etc.)
Relative
Importance
to Focal Firm
Political The new Healthcare
Bill being debated in
Congress
Significant
Government
control over
healthcare.
Potential loss of
profits to meet
new regulations.
6 months to a
year
Negative Impact
and will change the
industry drastically
It would be
detrimental to the
firm because it
would lower
revenues without
being able to
cut costs
Economic Economic
Recession in the
U.S.
Decrease in
employer health
coverage.
Increase in
uninsured
patients.
6 – 18 months Negative Impact but
will increase when
economy bounces
back
It will initially hurt
revenues but only
in the near future
because economy
will eventually turn
around
Social Public demand for
affordable
healthcare
This represents
a decline in the
industry because
its unaffordable
6 months to a
year
Negative Impact and
will cause firms to
lower prices
This hurts the firms’
revenues because
it has to lower its
prices to meet the
public demand for
affordable
healthcare
Technological Technology
advances in new
tools and
procedures to keep
up with new medical
problems
More effective
treatments for
patients.
Immediately Positive Impact and
allows firms to stay
ahead of the curve.
New technologies
increase
opportunities for
growth in the
industry
Legal Malpractice laws to
change
Could cause
increase in
industry because ho
can
lower costs.
1 – 2 years Positive Impact and
allow for increase
in revenues since
the industry can
potentially lower
costs
Could allow the firm
to cut costs across
the board and in
turn lower prices
Environmental Not found to be a significant driving force
53. 49
Appendix 14
Various Company Profiles compiled from: Mergent (2009). Healthsouth Corp.: Competitors.
Retrieved September 22, 2009 from Mergent Online Database.
Strategic Group Map
DegreeofServiceOffered
Full
HealthSouth
Tenet
Healthcare
Corp.
US Physical
Therapy
Universal
Health
Services,
Inc.
UCI Medical Affiliates
Health Mgmt
Associates
Rehab Care
Group, Inc.
Hanger
Orthopedic
Group
Limited
Paincare
Holdings
Sun
Healthcare
Group,
Inc.
Psychiatric
Solutions/
LCA Vision
Integra/
R.F.Management Alliance
Local Regional National Global
Geographic Coverage
54. 50
Appendix 15
U.S. Physical Therapy, Inc. Financials
U.S. Physical Therapy, Inc.: 5 Year Income Statement
As Reported Annual Income Statement 12/31/2008 12/31/2007 12/31/2006 12/31/2005 12/31/2004
Currency USD USD USD USD USD
Auditor Status
Not
Qualified
Not
Qualified
Not
Qualified
Not
Qualified
Not
Qualified
Consolidated Yes Yes Yes Yes Yes
Scale Thousands Thousands Thousands Thousands Thousands
Net patient revenues 182,939 149,437 133,376 130,030 116,295
Management contract revenues - 1,945 1,784 2,022 1,968
Other revenues - 304 34 70 45
Management contract revenues & other
revenues
4,747 - - - -
Net revenues 187,686 151,686 135,194 132,122 118,308
Salaries & related costs 100,269 79,191 69,340 67,567 59,053
Rent, clinic supplies, contract labor &
other clinic operating costs
39,814 32,581 27,896 27,197 24,929
Provision for doubtful accounts 3,073 2,553 2,115 1,446 1,293
Closure costs 432 - - - -
Total clinic operating costs 143,588 114,325 99,351 96,210 85,275
Corporate office costs 20,222 17,326 17,247 16,425 16,802
Closure costs - - - 514 690
Gain (loss) on sale or disposal of fixed
assets
- - - (90) 452
Operating income (loss) from continuing
operations
23,876 20,035 18,596 18,883 15,993
Interest & investment income - 273 - - -
Interest, investment & other income 260 - - - -
Interest expense 542 301 - - -
Earnings (loss) in unconsolidated joint
venture
- - (31) (34) -
Minority interests in subsidiary limited
partnerships
7,085 5,727 5,647 4,908 5,362
Interest income, net - - 332 361 146
Income (loss) before income taxes from
continuing operations
16,509 14,280 13,250 14,302 10,777
Current federal income taxes 3,693 4,298 4,231 4,578 3,360
Current state income taxes 890 826 885 889 593
Total current income taxes 4,583 5,124 5,116 5,467 3,953
Deferred federal income taxes 1,592 261 (26) 54 140
Deferred state income taxes 330 80 (33) (10) 6
Total deferred income taxes 1,922 341 (59) 44 146
Provision for income taxes 6,505 5,465 5,057 5,511 4,099
55. 51
Net income from continuing operations 10,004 8,815 8,193 - -
Income (loss) from continuing operations - (121) (2,985) - -
Tax benefit (expense) from discontinued
operations
- 44 1,088 - -
Income (loss) from discontinued
operations
- (77) (1,897) - -
Net income (loss) 10,004 8,738 6,296 8,791 6,678
Weighted average shares outstanding -
basic
11,907 11,643 11,690 11,923 11,916
Weighted average shares outstanding -
diluted
12,055 11,718 11,731 12,075 12,431
Year end shares outstanding 12,037.316 11,838.455 11,467.112 11,835.382 12,116.054
Income (loss) per share - continuing
operations - basic
0.84 0.76 0.7 - -
Income (loss) per share - discontinued
operations - basic
- (0.01) (0.16) - -
Net income (loss) per share - basic 0.84 0.75 0.54 0.74 0.56
Income (loss) per share - continuing
operations - diluted
0.83 0.75 0.7 - -
Income (loss) per share - discontinued
operations - diluted
- - (0.16) - -
Net income (loss) per share - diluted 0.83 0.75 0.54 0.73 0.54
Number of full time employees 1,683 - 1,210 1,269 1,138
Number of part time employees 366 - 296 310 211
Total number of employees 2,049 1,957 1,506 1,579 1,349
Number of common stockholders 53 58 34 36 37
56. 52
USPH 3 Year Balance Sheet
USPH Current Position
2006 2007 2008
(Millions)
Cash Assets 11 8 10.1
Receivables 22.3 26.7 26.7
Other 2.7 1.3 1.9
36Current Assets 36 38.7
Accounts Payable 1.6 1.6 1.5
Debt Due 7 9 11.7
Other 6 0.8 1.4
9.2Current Liabilities 11.4 14.6
71.5Equity 96.3 118.2
57. 53
Ratios
Ratio Analysis for USPH
2006 2007 2008
ROA 9.13 10.42 9.3
ROE 11.55 13.99 13.21
GPM 0.2651 0.2463 0.235
NPM 0.0466 0.0576 0.0533
Quick Ratio 3.68 3.03 2.52
Total Debt Ratio 0.01 0.013 0.17
Current Ratio 3.92 3.15 2.65
Cash/Equivalents TA 10.22 15.62 20.69
Total Asset Turnover 1.96 1.81 1.75
ROI 33.73 29.79 27.44
EBITDA Margin 17.08 16.68 13.03
Calculated Tax Rate 26.72 27.32 27.57
Revenue per Employee 89,770 77,509 91,349
ROA % (Net) 12.43
Compare to Healthsouth
ROE % (Net) AvgEqty<0
ROI % (Operating) 29.88
EBITDA Margin % 22.92
Calculated Tax Rate % (38.12)
Revenue per Employee 83,517
The ratio analysis for USPH shows that they have experienced little growth while both
EBITDA and ROI have been declining throughout the past several years while HealthSouth has
continued to outperform them in these areas. Also, USPH’s results from ROA and ROE have
both varied over this time period. UPSH has continued to outperform HealthSouth in ROE due to
the fact that HealthSouth has reported negative shareholder equity for the past several years.
Although performance has varied over several years, the financial position of USPH shows them
to be a close competitor and a possible threat in the future.
58. 54
Appendix 16
Tenet Healthcare Corp. Financials
Tenet Healthcare Corp.: 5 Year Income Statement
As Reported Annual Income Statement 12/31/2008 12/31/2007 12/31/2006 12/31/2005 12/31/2004
Currency USD USD USD USD USD
Auditor Status
Not
Qualified
Not
Qualified
Not
Qualified
Not
Qualified
Not
Qualified
Consolidated Yes Yes Yes Yes Yes
Scale Millions Millions Millions Millions Millions
Net operating revenues 8,663 8,852 8,701 9,614 9,919
Salaries, wages & benefits 3,816 3,964 3,883 4,388 4,325
Supplies 1,528 1,573 1,587 1,774 1,724
Provision for doubtful accounts 632 567 530 698 1,205
Other operating expenses 1,955 2,047 2,014 2,183 2,231
Depreciation - 330 313 352 368
Amortization - 32 29 30 20
Depreciation & amortization 373 - - - -
Impairment of long-lived assets & goodwill, net - - 376 255 1,236
Impairment of long-lived assets & goodwill &
restructuring charges, net of insurance
recoveries
18 60 - - -
Restructuring charges - - 4 11 36
Hurricane insurance recoveries, net of costs - (3) (14) - -
Loss from hurricanes & related costs - - - 55 -
Litigation & investigation costs, net of
insurance recoveries
41 13 766 212 74
Loss from early extinguishment of debt - - - 15 13
Operating income (loss) 300 269 (787) (359) (1,313)
Interest expense 418 419 409 405 333
Investment earnings 22 47 62 59 20
Minority interests 6 4 4 7 (3)
Net gains on sale of investments 139 - - - -
Net gain (loss) on disposal of facilities & long-
term investment
- - 5 - -
Net gains on sales of facilities & long-term
investment & subsidiary common stock
- - - 4 10
Income (loss) from continuing operations
before income taxes
37 (107) (1,133) (708) (1,613)
Current federal income tax expense (benefit) (1) (75) (156) (29) (116)
Current state income tax expense (benefit) (9) 13 4 4 7
Total current income tax expense (benefit) (10) (62) (152) (25) (109)
Deferred federal income tax expense (benefit) (1) 20 (104) (28) 274
Deferred state income tax expense (benefit) (14) (16) (6) (34) 19