Idea Transcript
Jefferies 2015 Global Healthcare Conference June 2015
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Safe Harbor Provisions SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS: This news release may contain forward-looking statements within the meaning of the federal securities laws. Statements regarding future events, developments, the Company's future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue and net income), are forward-looking statements within the meaning of these laws and involve a number of risks and uncertainties. Management believes that these forward looking statements are reasonable and are based on reasonable assumptions and forecasts, however, undue reliance should not be placed on such statements that speak only as of the date hereof. Moreover, these forward-looking statements are subject to a number of risks and uncertainties, some of which are outlined below. As a result, actual results may vary materially from those anticipated by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company's ability or inability to attract and retain qualified personnel; possible regulation of the Company's software by the U.S. Food and Drug Administration; uncertainties concerning threatened, pending and new litigation against the Company including related professional services fees; uncertainties concerning the amount and timing of professional fees incurred by the Company generally; changes of accounting estimates and assumptions used to prepare the prior periods' financial statements; general economic conditions; and the risk factors detailed from time to time in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission.
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Company Overview Quality Systems, Inc. and its NextGen Healthcare subsidiary develop and market computer-based practice management, electronic health records (EHR) and revenue cycle management applications, as well as connectivity products and services, for medical and dental group practices and small hospitals. • Revenue primarily derived from physician group businesses that utilize the Company’s high functionality practice management suites • Focus is on growing organically with a strong emphasis on reinvestment in new product and service development initiatives • Acquisitions of complementary business lines are also key drivers of growth
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Organizational Timeline
A willingness to reinvest and reinvent to better compete
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Quality Systems Today March 31st, 2015 TTM Revenue: $490.2mm Non-GAAP EPS: $0.62
TTM Revenue: $373.8mm (76% of total)
TTM Revenue:
~10,000 Dentists
~ 85,000 Providers
Markets Served:
Ambulatory Practices • Practice Management • EHR • Population Health Management • Patient Portal
TTM Revenue:
$18.5mm (4% of total)
Markets Served:
$80.0mm (16% of total)
TTM Revenue:
~ 300 Hospitals
~ 6,500 Providers
Dental Practices
Markets Served:
Ambulatory Practices • Revenue Cycle Management • Other Services
• Practice Management • Electronic Dental Records
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$18.0mm (4% of total)
Markets Served:
Small Hospitals • Financials • Clinical • Surgery Scheduling
Market Drivers • American Recovery and Re-investment Act (ARRA) – 2/09 – Over $60 billion in incentive and grant money to stimulate healthcare information technology (HIT) adoption. – Stringent rules for providers to qualify for funds known as “Meaningful Use” – First time that state-based Medicaid programs and Departments of Health become major purchasers of HIT
• Pay-for-performance (P4P) programs, patient-centered medical home, and other quality initiatives • Consumerism and Personal Health Records (PHR) • Interoperability and community-based data exchange
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Medicare Complete EHR EP Attestations Top Ten Vendors Epic Systems Corporation
152,888
Allscripts
66,498
eClinicalWorks LLC
51,876
NextGen Healthcare
47,185
GE Healthcare
38,541
Greenway Health
29,527
athenahealth, Inc
21,070
Practice Fusion
17,104
McKesson
16,727
Community Computer Service Inc
9,204
-
20,000
40,000
60,000
Based on ONC March 2015 attestation data
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80,000
100,000
120,000
140,000
160,000
180,000
Medicare Complete EHR EP Attestations: Top Five vs. Top Ten Vendors by % Total
22.9% 9.9%
Epic Systems Corporation Allscripts eClinicalWorks LLC
7.8%
NextGen Healthcare GE Healthcare Greenway Health, LLC
7.1%
athenahealth, Inc Practice Fusion McKesson
32.6% 5.8%
All Other
4.4%
The top five vendors continue to dominate more than half (53%) of all attestations, where “All Other” represents a collection of almost 500 additional vendors
3.2% 2.6% 1.4%
Community Computer Service, Inc
2.5%
Based on ONC attestation data March 2015
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Hospital Top 10 Vendors
1 2 3 4 5 6 7 8 9 10
Vendor Epic Systems Corporation MEDITECH CPSI Cerner Corporation McKesson MEDHOST Healthland, Inc. Allscripts NextGen Healthcare Health Care Systems Inc
Attestations 1,414 1,357 1,234 943 656 606 565 332 153 119
All Other
% Total 17.7% 17.0% 15.5% 11.8% 8.2% 7.6% 7.1% 4.2% 1.9% 1.5% 7.4%
Based on ONC March 2015 attestation data
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Hospital Attestations: Top Ten Vendors by % Total
17.7% 17.0%
Epic Systems Corporation MEDITECH CPSI
7.4%
Cerner Corporation McKesson
1.5% 1.9%
MEDHOST
15.5%
4.2%
Healthland, Inc. Allscripts NextGen Healthcare
7.1%
Health Care Systems, Inc. All Other
11.8%
7.6% 8.2%
Based on ONC March 2015 attestation data
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EHR Incentive Program Total Program to Date Stage 1 Payments
Active Registrations
Providers Paid
Dollars Paid
Medicare Eligible Professionals
353,350
290,304
$7.67 Billion
Medicaid Eligible Professionals
177,406
139,110
$3.63 Billion
4,811
4,793
$18.31 Billion
535,567
434,207
$29.61 Billion
Eligible Hospitals & CAHs Total Stage 2 Payments
Providers Paid
Dollars Paid
Medicare Eligible Professionals
38,472
$254.66 Million
Total Dollars Paid
Eligible Hospitals
1,440
$1.08 Billion
$30.93 Billion
Total
39,912
$1.33 Billion
Based on ONC March 2015 attestation data
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Low Growth
Growth
High Growth
Market Opportunity & Positioning