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New Jersey Healthcare Financial Management Association
Business Continuity & Facility Readiness: Are Institutions Ready for Today’s World
Tuesday, April 22, 2014 and Thursday, April 24, 2014
Richard Baum, Assistant Treasurer, and James Martin, Controller
NYU Langone Medical Center
Disclaimer
The information contained in these slides and the accompanying oral presentation (collectively, the “Presentation Information”) is
being provided for informational purposes only and should not be relied upon in making an investment decision with respect to any
security issued by NYUHC. The Presentation Information is not an offer to sell securities or the solicitation of an offer to buy
securities, nor shall it constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would
be unlawful. NYUHC may only sell securities by means of an offering memorandum or official statement.
The Presentation Information contains forward-looking statements. All statements other than statements of historical facts contained
in the Presentation Information, including statements regarding NYUHC’s strategy, plans and objectives of management, prospects,
future results of operations and financial position, future revenue, member growth and rate of adoption, projected costs, and market
estimates and growth are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“predict,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. NYUHC has based these forward-looking statements largely on
NYUHC’s current expectations and projections about future events and financial trends that management of NYUHC believes may
affect NYUHC’s financial condition, results of operations, business strategy and financial needs. NYUHC does not assume any
obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by law.
No user of the Presentation Information should place undue reliance on NYUHC’s forward-looking statements because they involve
known and unknown risks, uncertainties and other factors that are beyond NYUHC’s control and that could materially affect actual
results, levels of activity, performance, or achievement. If any of these risks or uncertainties materialize, or if NYUHC’s underlying
assumptions prove to be incorrect, actual results or events could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements made in the Presentation Information.
The Presentation Information includes both GAAP and non-GAAP financial measures. NYUHC’s management uses certain non-
GAAP financial measures to assess NYUHC’s business and operations. Non-GAAP information should not be construed as an
alternative to GAAP information, as the items excluded from the non-GAAP measures often have a material impact on NYUHC’s
financial results. NYUHC uses, and users of the Presentation Information should use, non-GAAP measures in conjunction with
NYUHC’s GAAP results.
2 Note: Cover image – artist’s rendering of future campus including NYU School of Medicine Facilities.
New York University
NYU Langone Medical Center
NYU
Hospitals
Center
School of Medicine
(including Faculty
Group Practice)
Member of the Obligated Group
Key:
Unincorporated division of
New York University
CCC550
Sole member
Note: Neither New York University nor its School of Medicine are obligated with
respect to NYUHC’s Bonds or commercial debt. No assets or revenues of New York
University or its School of Medicine are pledged to secure or available to pay debt
service with respect to NYUHC’s debt obligations. CCC550, NYU Hospitals Center’s
wholly owned captive insurance company, is also not obligated with respect to
NYUHC’s debt obligations and no assets or revenues of CCC550 are pledged to secure
or available to pay debt service with respect to NYUHC’s debt obligations.
3
NYULMC is an integrated academic
medical center in midtown Manhattan with
outpatient centers across the region:
Tisch Hospital (546 beds).
Hospital for Joint Diseases (157 beds).
Ambulatory care network.
NYU Physician Network including NYU
School of Medicine (“NYUSM”) Faculty
Group Practice and private physicians:
2,300+ physicians.
Over 100 medical practices.
NYULMC is a virtual entity with one
management team and one board of
trustees making key decisions across
the hospital and school of medicine.
NYULMC FY 2013 operating revenues:
$3.3 billion (including NYUHC ~ $1.9
billion)
Unique Structure for NYU Langone Medical Center
Investment in Technology
EPIC - First fully integrated Clinical
and Billing system in New York
Performance Dashboards
Data Center - Key infrastructure
component for the future Campus
Transformation
Broad System Implementation
PeopleSoft - New Enterprise
Resource Planning System
Enterprise Data Warehouse &
Business Intelligence
4
Dedication to Clinical Quality
Ranked #14
in the nation on the
“Best Hospitals
Honor Roll” with 12
nationally ranked
specialties
In 2013, received the Gold
Seal of Approval by The
Joint Commission,
reflecting our commitment
to high-quality care
Ranked #1 for Patient
Safety and Quality.
Recipient of the 2013
Quality Leadership Award
Commitment to the “Pursuit of Excellence”
5
PERELMAN
Expanding Inpatient and Ambulatory Facilities in Manhattan
Expanded ambulatory presence in the last
three years:
Musculoskeletal Center (110,000 sq.
ft.)
Ambulatory Center (300,000 sq. ft.)
Outpatient Surgery Center (18,000 sq.
ft.)
An extension clinic at NYUSM’s Joan
H. Tisch Center for Women’s Health
Tisch Center for Men’s Health
NYU Langone Internal Medicine – The
Miller Practice
Affiliated Hospitals (Manhattan and Brooklyn):
Bellevue Hospital Center
Gouverneur Healthcare Services
New York Harbor Veterans Affairs
Medical Center
Woodhull Hospital Medical Center
6
Expanded geographic presence
beyond Manhattan through new
physician relationships:
Outpatient care centers (i.e.
Oncology, Orthopaedics)
Specialist outreach programs
Acquired and opened outpatient
centers outside of Manhattan:
Brooklyn Endoscopy and
Ambulatory Surgery Center
Hudson Valley Cardiology
(Westchester, NY)
Columbus Medical Center
(Queens, NY)
Growing Physician Presence Across Region
* Artist rendering.
Expand NYULMC patient care, research and education footprint to 3.5 million sq. ft. of facility space
Tisch Hospital – elevator/lobby renovation - completed April 2013; 100% funded by philanthropy
Energy Building – supply electricity to First Avenue campus - construction FY 2012 - 2016
Science Building construction - NYUSM research facilities; University funded; construction FY 2013 -
2018 (300,000 sq. ft.)
ED Renovation – Tisch Hospital; expected to open Spring 2014 (change from 6,900 to 16,900 sq. ft.)
Kimmel Pavilion – new 22-story clinical pavilion on the First Avenue Campus; expected construction
FY 2014 – 2017 (830,200 sq. ft.)
7
NYULMC Campus Transformation Project*
Clinical Flexibility
Ambulatory Care Expansion (added over 800,000 square feet in past two years)
7-Day Care Initiative in process before superstorm
Ability to flex staffing and operations across facilities
Capacity for physicians to operate and take care of patient across facilities
Inpatient bed relocation to HJD campus in process
Financial Readiness
Balance sheet reserves established as cushion for operating volatility
Fixed rate debt and lines of credit capacity of $400 million in October 2012
Issuance of Series 2012A taxable debt $250 million in July 2012
Policy to invest $10 million per month from operations into capital program &
reserve fund ~ total working capital of $503 million as of November 1, 2012
Ability to access excess capital reserves from CCC550 Insurance Co. (offshore
malpractice insurance company) when needed and declared by Board of
Directors
Information technology and Management reporting
EPIC – First fully integrated clinical system in NY market
PeopleSoft – implemented in 2010; simplified supply requisitioning and ordering
Disaster Recovery Centers in New Jersey and Pennsylvania
8
NYUHC Strategic Initiatives Pre-Superstorm Sandy
9
Superstorm Sandy
Friday, October 26, 2012 – 575 patients at Tisch Hospital reduced to 322 patients by Monday, October
29, 2012
Evacuation order for Tisch Hospital issued when ConEdison power plant explosion caused
widespread damage and power loss to lower Manhattan
Tisch Hospital patients were transferred to 14 hospitals within 13 hours
10
Superstorm Sandy – Preparation & Evacuation
11
Superstorm Sandy - Evacuation
12
Press conference on December
27, 2012, to announce re-opening
of Tisch Hospital with NYULMC
Dean and CEO Robert
Grossman, Ken Langone and
Senator Charles Schumer
Superstorm Sandy
Clinical Flexibility
Dispersion of inpatient volume to HJD campus which remained open during
Superstorm Sandy
Ambulatory Care Facilities
Utilization of ambulatory locations for dispersion of outpatient volume
Continued expansion of Ambulatory Care strategy – acquired Brooklyn
Endoscopy & Ambulatory Surgery Center – Spring 2013
Urgent Care Center - In January 2013, NYUHC re-opened the Emergency
Department (ED) as an urgent care center, staffed by ED clinicians, to handle
walk-in and other urgent care cases (excluding 911 ambulance)
Physician retention
Minimal loss of physicians to competing facilities attributable to storm
Physician malpractice insurance coverage extended to all physicians practicing
at NYUHC facilities only
13
How NYUHC Withstood Superstorm Sandy
Commitment to Nursing and Staff
No terminations of staff; continuous pay provided throughout storm and recovery
Redeployment of employees to active sites
Ambulatory Surgery Center
34th Street Clinical Cancer Center
Center for Musculoskeletal Care
Hospital for Joint Diseases
NYUSM Faculty Group Practice off-site locations
Operational downtime utilized to train staff on Epic inpatient installation; implemented
at HJD on December 2, 2012, Schwartz Health Care Center on December 15, 2012
and Tisch surgical suites on December 27, 2012
Financial Capabilities
Continued investment of $10 million per month from operations into capital program &
reserve fund – total working capital of $709 million as of February 28, 2013
Increase in total working capital lines of credit to $500 million
CCC550 Insurance Co. (offshore malpractice insurance company) ~ $51 million
dividend declared and paid to NYUHC in November 2012
Philanthropic support - $45 million received for construction of Kimmel Pavilion in
November 2012
Quick, coordinated action for initial FEMA funding and continuing strong FEMA support
14
How NYUHC Withstood Superstorm Sandy (continued)
Oct 29:
Superstorm Sandy
Strikes NY Metro
Area
Tisch evacuated
HJD remains
open
Oct 31: Center for
Musculoskeletal
Care re-opens
Nov 1-9: 34th
Street Cancer
Center,
Ambulatory Care
Center, and
Ambulatory
Surgery Centers
re-opens
Dec 17: HCC re-
opens for
procedural and
surgical services
Dec 27: Tisch
Hospital begins
phased re-opening
including inpatient
and outpatient
surgery
October
2012 November December January 2013
Jan 14: Inpatient services
such as Medicine,
Pediatrics, Neurology,
Epilepsy are operational;
Emergency Department is
re-opened as an Urgent
Care Center for handling
of walk-in and other
urgent care cases
(excluding 911
ambulance)
Mar 2013: Infusion services
opened at ACC
Apr 2013: Infusion center opens
in Long Island in conjunction with
existing physician practice
May 2013: Rusk Rehab beds
opened at HJD
March - August January – March 2014
Apr 2014:
NYUHC
Emergency
Department
planned to
reopen
Summer 2013:
NYUHC
inpatient
psychiatry and
complex rehab
services
reopen
* All planned future events are subject to change. 15
NYUHC Operational Timeline in Response to Superstorm Sandy*
Nov 16: NYUHC publishes
voluntary disclosure filing on
DAC/EMMA related to Sandy
Nov 30: NYUHC publishes
FY2012 annual disclosure on
DAC/EMMA
Jan 7: NYUHC
presents at
JPMorgan
Healthcare
Conference;
publishes
presentation on
EMMA
October
2012 November December January – February 2013
Jan 28: NYUHC
publishes
FY2013 Q1
disclosure on
DAC/EMMA
(quarter end
11/30/12)
March - August
Spring 2013: Rating
agencies affirm
NYUHC ratings
(A3/A-/A-, stable
outlook)
Summer 2013:
NYUHC issues $350
million taxable bonds
in line with its’
campus
transformation plan
Feb 1: NYUHC holds
investor update call
and publishes
voluntary disclosure
filing on DAC/EMMA
Dec 14: NYUHC
publishes FY2012
audit report on
DAC/EMMA
16
NYUHC Investor Communication Post Superstorm Sandy
NYUHC has been out front in its communications to the investor community
Repeated market updates on implications of Superstorm Sandy
Investment banking conferences
Transaction marketing (net roadshow, tour of NYUHC facility)
Involvement of entire executive team in communication strategy
($000) Fiscal Year Ended August 31,
(Audited)
Three Months Ending
November 30,
(unaudited)
2011 2012 2013 2012 (3) 2013
Net Patient Service Revenue $1,625,839 $1,830,158 $1,662,617 $385,837 $481,253
Other Operating Revenue 75,380 141,287 269,326 115,822 79,118
Total Operating Revenue 1,701,219 1,971,445 1,931,943 501,659 560,371
Total Operating Expenses 1,515,456 1,722,693 1,884,135 467,931 507,389
Gain from Operations 185,763 248,752 47,808 33,728 52,982
Other (1) 460 (1,803) (41,252) (31,847) 5,981
NYUSM Mission Support (45,000) (27,750) (35,735) (35,735) (22,500)
Excess (deficiency) of
Revenue Over Expenses
141,223
$219,199
$(29,179)
$(33,854)
$36,463
Other changes in unrestricted
net assets (2)
21,551
(94,567)
169,200
10,306
8,995
Net increase (decrease) in
unrestricted net assets
$162,774
$124,632
$140,021
$(23,548)
$45,458
17
(1) FY 2013 amount consists of ($33.7 million) in impairment on disposal of property, plant and equipment related to Superstorm Sandy and other non-storm related disposals and ($7.6 million) investment return on underlying asset portfolio.
(2) Other changes in unrestricted net assets includes valuation changes to pension and postretirement obligations and contributions/net assets released for capital acquisition.
(3) Superstorm Sandy occurred on October 29, 2012. Inpatient services at Tisch Hospital were closed for 60 days and resumed on December 27, 2012. An Urgent Care Center has been operating in absence of a functioning Emergency Department. Thus, results for FY 2013 (inclusive of the three months ended November 30, 2012) include materially reduced operations.
NYUHC Financial Performance
(1) Based on Master Trust Indenture methodology.
(2) Superstorm Sandy occurred on October 29, 2012. Inpatient services at Tisch Hospital were closed for 60 days and resumed on December 27, 2012. An Urgent Care Center has been operating in absence of a functioning Emergency Department. Thus, results for FY 2013 (inclusive of the three months ended November 30, 2012) include materially reduced operations.
(3) FY 2013 & November 2013 figures above are inclusive of NYUHC’s Series 2013A $350 million taxable bond issuance.
Operating Margin (2)
12.5%
10.9%
12.6%
2.4%
6.7%
9.5%
FY10 FY11 FY12 FY13 Nov-12 Nov-13
EBIDA Margin (2)
17.8%15.8%
17.6%
8.4%
12.5%
16.0%
FY10 FY11 FY12 FY13 Nov-12 Nov-13
Cash to Debt (%) (2/3)
87
64 61 5566
52
FY10 FY11 FY12 FY13 Nov-12 Nov-13
Days Cash on Hand (1/2)
118108
135 141 144131
FY10 FY11 FY12 FY13 Nov-12 Nov-13
18
NYUHC Financial & Volume Metrics
240,770 261,835
290,881 264,734
63,381 72,823
FY10 FY11 FY12 FY13 Nov-12 Nov-13
Outpatient Visits (2)
37,408 37,929 38,045
26,676
6,540 7,998
FY10 FY11 FY12 FY13 Nov-12 Nov-13
Discharges (2)
19 19
NYUHC is a highly integrated academic medical center with close ties to New York University
“Tireless Pursuit of Excellence”
Patient care quality focus
Commitment to invest in technology
Positioning the Medical Center for the future of healthcare
Solid execution of ambulatory care strategy
Strong physician recruitment efforts
Moving forward on campus transformation plan
Updated infrastructure with storm mitigation
Maintaining strategic agility to execute plan
Balance sheet reserves provide operating flexibility
Issuance of fixed rate bonds and utilization of lines of credit for quick access to fund capital
plans
Philanthropy – continued support by NYC community for combined medical center enterprise
Conclusion
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