SEC Filings

8-K
ENVISION HEALTHCARE CORP filed this Form 8-K on 08/07/2017
Entire Document
 
Envision Healthcare Reports 2017 Second Quarter Financial Results
 
Page 2
 
 
August 7, 2017
 
 



Envision reports two operating segments as continuing operations: Physician Services, which includes facility-based and post-acute services; and Ambulatory Services. This follows the decision earlier this year to market and divest American Medical Response, Envision’s Medical Transportation business. As a result of the movement of this business to discontinued operations, and as required by accounting guidelines, Envision re-allocated certain corporate expenses associated with its shared services model to continuing operations. This re-allocation impacts segment Adjusted EBITDA by $8.5 million for the three months ended June 30, 2017. The re-allocation results in a reduction of Adjusted EBITDA in the second quarter of $6.5 million for Physician Services and $2.0 million for Ambulatory Services, with a corresponding Adjusted EBITDA increase of $8.5 million for discontinued operations. Upon the planned divestiture of the Medical Transportation business, a portion of these shared services are likely to remain with that business.

Physician Services
In order to enhance the comparability of results following the merger of AMSURG Corp. (“AMSURG”) and Envision Healthcare Holdings, Inc. (“EHH”), which was completed on December 1, 2016, the following discussion presents Envision Physician Services’ results for the prior-year period as if the two separate Physician Services’ segments of AMSURG and EHH, based on historically reported results, had been combined effective January 1, 2016.

Net revenues for Physician Services were $1.63 billion for the second quarter of 2017, an increase of 9.3% from $1.49 billion during the prior-year period. Revenue growth was driven by contributions from acquisitions of 10.6% and 2.5% from same contracts. New contracts contributed revenue growth of 5.6%, offset by terminations of 7.1%, resulting in a net decline of 1.5% from new contracts, an anticipated improvement from the first quarter of 2017. New contracts were also impacted by a 2.3% decline due to the previously announced population health contract termination.

Same-contract revenue growth was 3.2% in the second quarter of 2017 when compared to the prior-year period. Same-contract patient care volume grew by 1.1% and same-contract net revenue related to revenue per patient encounter grew by 2.1%, compared to the prior-year period.

Same-contract patient volume was driven by strong growth in anesthesia and hospitalist medicine, offset by volume declines in emergency medicine. Same-contract rate improved in emergency medicine and declined in anesthesia.

For the second quarter of 2017, Adjusted EBITDA was $193.3 million, or $199.8 million when excluding the corporate expense re-allocation of $6.5 million. This compares with $190.5 million for the prior-year period.

Ambulatory Services
Net revenues for the second quarter of 2017 were $318.5 million, which compares to $319.8 million for the prior-year period. Same-center revenue increased by 0.6% for the second quarter of 2017, which was comprised of a 0.5% increase in net revenue per procedure and an increase of 0.1% in procedure volume. Deconsolidated centers contributed incremental revenues of $4.7 million for the second quarter of 2016.

For the second quarter of 2017, Adjusted EBITDA was $60.5 million, or $62.5 million when excluding the corporate expense re-allocation of $2.0 million. This compares with $61.7 million for the prior-year period.

Ambulatory Services operated 263 ASCs and one surgical hospital at June 30, 2017. Ambulatory Services acquired two centers and disposed of three centers during the quarter.



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