The HonorHealth Story and Growth Overview
HonorHealth, a relatively new and rising brand, emerged from the merger of Scottsdale Healthcare and John C. Lincoln to form Scottsdale Lincoln Health Network in October 2013. Their revenue nearly doubled post-merger, showcasing continuous growth. With sustained EBIDA margins and a significant market presence in Arizona, HonorHealth has positioned itself as a leading healthcare provider. The organization's extensive footprint and diverse healthcare settings reflect its commitment to serving the community with quality care.
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A Relatively New and Rising Brand In October 2013, Scottsdale Healthcare (SHH) and John C. Lincoln (JCL) combined assets and strengths SHH and JCL, entered into an affiliation agreement to form Scottsdale Lincoln Health Network (SLHN) Shared Vision Shared Vision of the Future of the Future October 2013 October 2013 Complementary Complementary Geographies Geographies Economies of Economies of Scale Scale SHH and JCL statutorily merged to form SLHN January 2015 January 2015 Rationale for Rationale for Merger Merger Accelerated Accelerated Readiness for Readiness for Risk Risk- -Based Based Contracting Contracting SLHN s name was changed to HonorHealth Complementary Complementary Capabilities and Capabilities and Services Services March 2015 March 2015 2
Revenue has nearly doubled during the Merger Era Total Operating Revenue $3,000,000 $2,500,000 Total Operating Revenue $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2015 2016 2017 2018 2019 2020 2021 Total Operating Revenue $1,606,363 $1,716,544 $1,763,223 $1,967,247 $2,056,619 $2,153,054 $2,585,079 3
EBIDA has sustained in the 9-10% range during growth EBIDA Margin % 14.0% 12.0% 10.0% EBIDA Margin % 8.0% 6.0% 4.0% 2.0% 0.0% 2015 2016 2017 2018 2019 2020 2021 EBIDA Margin % 9.8% 9.5% 6.5% 12.8% 10.6% 9.6% 9.2% 4
Who is HonorHealth? HonorHealth? Seventh largest employer in Arizona (Scottsdale s largest) Second largest healthcare system market share in Maricopa County (the country s fastest growing county, which is 15% of the country s total growth) Ranked Top 25 Best Employer in Arizona by Forbes the past half decade (second highest healthcare system in AZ this past year, next to Mayo) Issued > $300M in Bonds in January 2021, rated A+ Stable by Fitch .over 15X subscription demand to supply Extensive footprint of a continuum of healthcare settings concentrated throughout Scottsdale and North Phoenix 5
HonorHealth Footprint Large system-owned medical group: 192 Primary Care Physicians 10 Urgent Care Physicians 125 Specialty Physicians H 126 Advanced Practitioners LEGEND 1,000,473 Medical Group Visits in 2021 H H H Hospital 447,761 Primary Care Visits 287,146 Specialty Care Visits Surgical Center 88,857 Urgent Care Visits H Specialty Practice H 137,940 VGP Cancer Care Visits PCP Practice Urgent Care 38,769 Med Group Imaging H 3,400 Combined HonorHealth Medical Staff Dense in core service areas; Catchment to considerable part of metro Phoenix ICP s Valley Wide Asset Distribution & Network Footprint 6
HonorHealth is more than just a Hospital System Research and InnovationInstitute Innovation CarePartners (ICP) HonorHealthFoundation NOAH MilitaryPartnership Physician-led, clinically integrated network (ACO), managing a Medicare Shared Savings Programs(MSSP) ICP deliversvalue-based healthcaredefinedby superior transitional care management and carecoordination ICP received $14 million in 2020 shared savingsfor its 2019 results (delivering $24M savings to CMS for 56K Medicare beneficiaries) and ranked in the top15 MSSP savings in the US Over 2,000 physicianmembers, 170,000 patient lives, and contracts with eight major insurancecompanies Founded in 2005, the Institute brings tomorrow s cures tothe community today by providing local access to cutting-edge technologies andtreatments Includes collaborationswith top scientists, physicians, universities, and companies across theglobe Anchors community bioscience ecosystem to attract and develop talent, technologies, resources that enhance communityhealth Implant of first leadless pacemaker in the US (Dr. Rahul Doshi) Branding and bylaws update work Added infrastructure for more aggressive Planned Giving, Corporate Giving and real estate gifts Surpassed $50M mark for gifts in 2020 As a community-focused nonprofit organization, every dollar donated supports breakthrough research and compassion care to make a difference for HonorHealth patients and theirfamilies In 1997, Neighborhood Outreach Access to Health (NOAH) was created to fulfillan unmet need for high-quality and affordable healthservices In 2012, HonorHealth beganan affiliation with NOAH, a federally qualified health center, to develop a comprehensive model ofcare Each year, the 10 NOAH locations provide 30kadults and children with medical, behavioral, and dentalcare NOAH also providesnutrition education and community resourceassistance The HonorHealth Military Partnership Programprovides trauma and deployment training to all branches of the military, active duty, National Guard, andReserves More than 3,000 soldiersand airmen have been trained in programsincluding: Medical simulationtraining Readiness skill sustainment training Nurse transitionprogram Critical care/Emergency Trauma NursingFellowship U.S. Air Force Magnet and Surgical LeadershipFellowship 7
HonorHealth is more than just a Hospital System Care for theCaregiver Well-BeingProgram DesertMission Circle theCity CommunityBenefit AmbassadorMovement Partnership addressesthe healthcare needs of the homeless population in Sunnyslope.Includes: Circle the City HealthNavigator in the ED to assist with discharge planning andcare Mobile medical unit and street outreach to provide illness and injury treatment, chronic disease management, flu shots, and behavioral healthcare Coordination with additional neighborhood associationsto address the health and social needs of the chronically homeless In August 2018, we launched our Ambassador Movement with the hope of finding 100 employees who wanted to connect with their colleagues and represent the causesthey careabout There are 2,050 registered Ambassadors who have tracked 16,800 activities and logged 3,800 volunteerhours. Highlightsinclude: Four truckloads of Military Care Package Drivedonations Mobile Market FoodBags delivered to Medical Group colleagues duringCOVID For 90 years, HonorHealth Desert Mission has been improving the health andwell- being of individuals from all socioeconomic walks oflife Offers early childhood education/ enrichment and senior day care/enrichment Provides food bank access and nutrition support (44,000 boxes food providedannually) Focus on employmentand economicsuccess Delivered thousands of meals to HonorHealth employees during the pandemic surges HonorHealth provided >$390million in value to the community in 2020: Financial assistance and charity care plus unreimbursed costs for providing care to Medicaid and Medicarepatients Community health improvementservices Clinical education including physician residencyprograms Community service activities The Caregiver Well-Being Program embraces and cultivates a culture ofprovider and caregiver resiliency and well-being Through the program, healthcare professionals who may experience stress associated with unanticipated events and outcomes in the workplace can receive emotional support,prevention resources, and tools to strengthen their ability to manage workplacestressors 8
HonorHealth SuccessInto a Pandemic Crisis Physician Alignment Employee Engagement Quality & Technology Financial Performance Growth Sonoran Crossing Medical Center openedSep 2020 FastMed JV (urgent care) Dec 2020 OrthoAZ JV opened Mar 2020 NeurosciencesInstitute opened May 2021 UHS JV BehavioralHospital opened Mar 2022 Medical staff Net Promoter Score of 52nd percentile in 2019 increased to 79th in 2020 General staff Net Promoter Score of 72nd percentile for2020 Top Quartile two years in a row Leapfrog (Spring and Fall 2020) at 4 A s and 1B CMS Star Rating GPA from 3.2 in 2019 to 3.8 in 2020 (TPK at 5 stars) ~9-10% EBIDA Margin in 2019, 2020 and 2021 Despite AZ Cares Act relief in bottom two in country per capita 9 9
HonorStrategy HonorStrategy 2020-2024 Enhance the PhysicianEnterprise HonorVision 2015-2019 Expand Market Essentiality & Presence Vertically Integrated Healthcare Network HH Formation 2013 - 2015 Create a Transformative Digital FrontDoor Value Proposition for PopulationMgmt. Hospital System Magnet Nursing Identity Impact the Social Determinants of Health Optimizing theDelivery System 10
Our Biggest Differentiators Our focus on Quality and Patient Experience: Top Quartile (at least) for most metrics Strong nursing culture (5 of the 8 Magnet hospitals in AZ) Heavily led by physician engagement/alignment (physicians in key Exec roles, joint Board/Med Staff Strategic Planning Committee, and ACO under shared governance) Again, not just the Valley of the Sun s 2nd largest community hospital system: HonorHealth Medical Group (one of the Valley s largest PCP practices) Innovation Care Partners (one of the Nation s highest performing ACOs) HonorHealth Research Institute (~$25M in revenue) Military partnership for critical care nurses Desert Mission food bank 11
