integrated healthcare for better patient outcomes

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Integrated Healthcare for Better Patient Outcomes Apollo Medical Holdings, Inc. LD Micro Invitational June 4, 2014 OTC-QB: AMEH www.apollomed.net

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Apollo Medical Holdings, Inc. LD Micro Invitational June 4, 2014 OTC-QB: AMEH www.apollomed.net. Integrated Healthcare for Better Patient Outcomes. Safe Harbor Statement. - PowerPoint PPT Presentation

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Page 1: Integrated Healthcare for Better Patient Outcomes

Integrated Healthcare for Better Patient Outcomes

Apollo Medical Holdings, Inc.

LD Micro InvitationalJune 4, 2014

OTC-QB: AMEHwww.apollomed.net

Page 2: Integrated Healthcare for Better Patient Outcomes

2

Safe Harbor Statement

This presentation may contain forward-looking statements, including information about

management's view of Apollo Medical Holdings, Inc. (“the Company”) future expectations, plans

and prospects.  In particular, when used in the preceding discussion, the words "believes,"

"expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are

intended to identify forward-looking statements.  Any statements made in this presentation other

than those of historical fact, about an action, event or development, are forward-looking

statements. These statements involve known and unknown risks, uncertainties and other factors,

which may cause the results of the Company, its subsidiaries and concepts to be materially

different than those expressed or implied in such statements.  Unknown or unpredictable factors

also could have material adverse effects on the Company’s future results.  The forward-looking

statements included in this presentation are made only as of the date hereof.  The Company

cannot guarantee future results, levels of activity, performance or achievements.  Accordingly, you

should not place undue reliance on these forward-looking statements.  Finally, the Company

undertakes no obligation to update these statements after the date of this release, except as

required by law, and also takes no obligation to update or correct information prepared by third

parties that are not paid for by Apollo Medical Holdings, Inc.

Page 3: Integrated Healthcare for Better Patient Outcomes

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ApolloMed Overview

Quality, efficient patient care

Partner with health plans, hospitals and other health providers to coordinate

care with local primary care physicians and specialists

Reduce preventable hospital admissions and re-admissions, avoidable

emergency room visits and proper outpatient and medication utilization

Bring efficiencies to inpatient and outpatient services, and enhance

communication throughout care continuum; patient centric

Multiple solutions through best-in-class hospitalist services, Accountable Care

Organization (ACO), independent physician associations (IPA) and outpatient

clinics

Core networks in California, Ohio and Mississippi

Formed in 2001 as hospitalist company, based in Glendale, CA

Providing a better, coordinated platform for physicians to manage patient care

Page 4: Integrated Healthcare for Better Patient Outcomes

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Operational Overview

Hospitalists Clinics

# of physicians ~50 ~4

# of admissions/visi

ts/patients treated

~25,000 ~14,000

Physician IPAs ACO

# of physicians 300+ 700+

# of patients 5,000+ ~30,000

Physicians Providing Direct Patient Care ApolloMed Medical and Business Management

Page 5: Integrated Healthcare for Better Patient Outcomes

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Compelling Value Proposition

Integrated strategy with unique elements that fits current healthcare trends of quality care and cost management

“Best in Class” inpatient medical management services and metrics

Proven ability to establish healthcare networks

Partnerships with industry leaders validate business approach

Growing revenues by building out networks and broadening services

Moving toward critical mass with strengthened balance sheet

Platform for organic and acquisitive growth, geographic expansion

Diverse revenue stream from case rate to value-based to full-risk payment models

Page 6: Integrated Healthcare for Better Patient Outcomes

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Capitalizing on Dynamics in the Healthcare Industry

$2.7 trillion market expected to reach $4.7 trillion

in 2020

Multiple growth drivers

– Seniors are high users of healthcare services

– More insured under ACA and health reforms

Need to manage patient costs

– Represents ~18% of U.S. GDP and growing

Payers moving to accountable care and value-based care from fee-for-service

Greater focus on quality at reduced costs to benefit all participants

Over 50% of spend is still on hospitals and physician care

Page 7: Integrated Healthcare for Better Patient Outcomes

7

ApolloMed Operating Units

ApolloMed Inpatient Physician Care (HPS)

– Hospitalist services

– ICU

– Post-acute services

– Physician Advisor Services

ApolloMed ACO

– Accountable Care Organization

Maverick Medical Group

– Independent Physician Association (IPA)

ApolloMed Care Clinics

Primary care and post-hospital discharge

Page 8: Integrated Healthcare for Better Patient Outcomes

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Inpatient Solution: Significant Value Proposition

Reducing the average inpatient hospital admissions by 1 saves the U.S. healthcare system $1-2 billion annually

Apollo also closely monitors bed days/ 1000, a measure of efficiency within inpatient settings, and “best in class” results are similar to admits

Superior inpatient services with focused on patient satisfaction, quality care and cost efficiency

ApolloMed HCP Seniors Medicare FFS

0

50

100

150

200

250

300

350

400

450

220 243

385

New Admission Rate/1,000 patients*

Focus on optimal length of stay

* Medicare National Reference Publication as reported in Pioneer ACO Dashboard , April 2013

Page 9: Integrated Healthcare for Better Patient Outcomes

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Inpatient Solution Advantages

Advantage for Health PlansAdvantage for Hospitals Reduces length of stay

Reduces bed days

Reduces re-admissions

Efficient use of specialists

Rapid transfer of out-of-network patients to contracted facilities

Cost-effective use of drugs

Improved documentation

Increases patient throughput

Improves facility utilization

Optimizes hospital length of stay

Obtains higher reimbursements

Reduces hospital emergency room admissions

Reduces hospital re-admissions

Increases efficient use of specialists/subspecialists

Optimize use of hospice care

Improves cost-effective use of pharmaceuticals

Advantage for Patients

Streamlines the healthcare continuum

Facilitates access to quality access

Increases time with physicians

Generates better outcomes

Creates greater satisfaction

Page 10: Integrated Healthcare for Better Patient Outcomes

10

Inpatient Solution: ApolloMed Hospital Physician Services (HPS)

50+ Physicians in 28 hospitals and facilities

>60 contracts with IPAs, health plans and hospitals

– WellPoint, L.A. Care, Dignity Health, Blue Cross, Athena

Improve patients’ quality of life through effective and ongoing

communication with:

– Medical group case managers

– Hospitalists

– Primary care physicians

– Post-acute

– ICU

Largest independent hospitalist group in Los Angeles

Page 11: Integrated Healthcare for Better Patient Outcomes

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Integrated Care Solutions: ApolloMed ACO

Selected by CMS in 3Q12 to develop networks

to better manage Medicare fee-for-service patients

Medicare Shared Savings Program (MSSP) with CMS 50/50 savings split

Industry leading partnerships provide validation:

– Fresenius Medical Care for ESRD and strategic partnership

– Boehringer Ingelheim for COPD chronic care management

– Rite Aid for community-based health treatment for patients with chronic and poly-chronic conditions

Recent ACO expansion

– >700 Physicians and >30,000 Medicare beneficiaries

– Increased enrollment in Southern and Central CA; expansion into Northern CA, Mississippi and Ohio

– Proven efficiencies at interim 12 month period

– 1 of less than half of ACOs formed in 2012 to achieve savings over benchmark

Page 12: Integrated Healthcare for Better Patient Outcomes

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Integrated Care Solutions - IPA: Maverick Medical Group

Maverick Medical Group overview

– Focus on senior and acute population to capture value currently flowing to the health plans, hospitals and other risk-bearing entities

– Formed in 1Q13 for Los Angeles area

– Affiliated health plans include Heath Net, L.A. Care, Blue Shield, Central Health Plan, SCAN and Easy Choice

– Paid fixed amount (PMPM) for medical management and care oversight for enrolled patients - ~5,000 as of 2Q14

– Approved for LA area pilot program with potential for thousands of duals/seniors and $10+ millions in revenue (total LA market allocation will be $10+ BILLION dollars)

IPA Model

– Focus on senior and acute population to capture value currently flowing to the health plans, hospitals and other risk-bearing entities

– Revenue driven by patient mix and efficiency derived from medical management

Page 13: Integrated Healthcare for Better Patient Outcomes

13

Integrated Care Solutions: ApolloMed Care Clinics

Formed in Q3’13 to provide operational infrastructure support, marketing and member relations

Efficient delivery of ambulatory treatment and ancillary services; also post-hospital discharge centers

Greater focus on preventive care and chronic condition management

Differentiator: Focus on full family and value-based outcomes

Aligned with ACA quality metrics, value over volume, and outpatient treatment

4 clinics in core Los Angeles market

– 3 handling >12,000 patient visits/year

– 1 de novo

Page 14: Integrated Healthcare for Better Patient Outcomes

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Recent Accomplishments

July 2013

September2013

October 2013

December 2013

March 2014April 2014

Launches Maverick Medical Group

Partners withMission Hospice

Join ACO: Integrated Healthcare Holdings, Physician Partners IPA, Bolsa Medical Group, AMVI Medical Group, and Pacifica Hospital

Collaborates with Boehringer

for COPD

$3.1 million in preliminary12-month

savings from benchmark by ApolloMed ACO

Partners with Rite Aidfor community-based

health treatment

Launches ApolloMed

Care Clinics

Receives $12 million

Investment fromFresenius

Page 15: Integrated Healthcare for Better Patient Outcomes

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4 decades experience with risk-bearing IPAs and MSOs Former President of Medical Pathways and Gateway Medical

Group

Co-founder Medical degree from the University of California, Irvine Diplomate of the American Board of Internal Medicine

More than 30 years of healthcare experience SVP of Operations for Dignity Health’s Los Angeles Service Area CEO of several Tenet Healthcare Hospitals

Appointed CFO in May 2014; Director since 2012 Former CEO of Keck Hospital; former CFO of UCLA Medical Center,

Beth Israel Deaconess Medical Center, Tufts Medical Center

Co-founder Graduated Georgetown Medical School and completed Residency

in Internal Medicine from USC Board of Directors at El Monte Community Hospital

Our Leadership

Warren Hosseinion, M.D.CEO & Director

Mitchell R. CreemChief Financial Officer

Mark MeyersChief Strategy Officer & Director

Adrian Vazquez, M.D.Chief Medical Officer

Edward RotanSenior Vice President, Maverick

Medical Group

Page 16: Integrated Healthcare for Better Patient Outcomes

16

CEO of SCAN, 10th largest MA plan in the U.S. Expertise in Government relations, Knox Kneene and Healthcare IT

CEO of Appzure, Inc. Founder and CEO of Accelerated Networks

Appointed ApolloMed CFO in May 2014 Former CEO of Keck Hospital; former CFO of UCLA Medical Center, Beth

Israel Deaconess Medical Center, Tufts Medical Center,

37 years in private and public healthcare sectors CEO of USC University Hospital and USC/Norris Cancer Hospital

Our Board

Relevant healthcare experience including corporate governance, executive, finance, operations, strategy, M&A and technology

Capital and Corporate Development; President of SpaGus Capital Partners

Served as CEO, CFO, Corp Development and M&A roles with companies from S&P 500 to emerging growth with focus on healthcare and technology

Gary AugustaExecutive Chairman

Ted SchreckDirector

Mitchell R. CreamDirector

Suresh NihalaniDirector

David SchmidtDirector

Co-founder Graduated Georgetown Medical School and completed Residency

in Internal Medicine from USC Board of Directors at El Monte Community Hospital

Warren Hosseinion, M.D.CEO & Director

Page 17: Integrated Healthcare for Better Patient Outcomes

17

Multiple Revenue Sources

Diversified streams from low to full risk

Low Risk - Contract billing or physician staffing - HPS or Clinics

– 84% of fiscal 2014 revenues

Share Savings or Quasi Risk - ApolloMed ACO

– CMS 50/50 cost-savings

– $3.1 million preliminary interim 12-month cost reduction

– Annual allocation in 2H14 (1st year covers 18 months)

Professional and Full Risk – Maverick Medical Group

Health plan savings under capitation

Professional services component of medical services provided by contracted and employed physicians

Page 18: Integrated Healthcare for Better Patient Outcomes

18

Improving Top Line and Bottom Line

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

Revenues

2012 2013 2014

$ in

mill

ions

-$10.0-$9.0-$8.0-$7.0-$6.0-$5.0-$4.0-$3.0-$2.0-$1.0$0.0

Net Income

2012 2013 2014$ in

mill

ions

ApolloMed ACO 1st performance contribution in 2H14

Maverick Medical Group’s initial revenue contribution in 3Q13; revenues are currently ramping up

Net Income greatly effected by stock impacts

Recently added BDO as auditor and changed fiscal year to quarters

>100% increase

in 2 years

Page 19: Integrated Healthcare for Better Patient Outcomes

19

Strengthened Capital Structure

2Q14 – Expanded relationship with Fresenius Medical Care and NNA Inc.

– $2 million of equity at $1 - ~2xs May 22 stock price

– $8 million in term and revolving loans

– $2 million convertible note (undrawn but available)

– Warrants for 5 million common shares at $1 and $2

– Board participation

Well-positioned to execute on growth strategy with solid balance sheet

Page 20: Integrated Healthcare for Better Patient Outcomes

20

Strategy for Aggressive Growth

Focus on strategic acquisitions

– HPS, IPAs and Outpatient Services such as specialty clinics and palliative care

Scale and expand networks

– Partnerships to add density to current networks

– Pursuing large hospital contracts to increase patient sharing with ApolloMed ACO and

Maverick Medical Group

Improve ApolloMed ACO and Maverick Medical Group economics

– Broadening service offering including palliative care: hospice, home health and

durable medical equipment

– Purchasing primary care physician clinics to drive patient flow

– Expanding into ER and ICU management, further into inpatient services

Expand geographies

– Replicating infrastructure and services

– ApolloMed ACO allows for nationwide partnering

Page 21: Integrated Healthcare for Better Patient Outcomes

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Attractive Industry Valuations

DaVita acquisition of HealthCare Partners for $4.4 billion

– $7,500 per “managed” senior life

– ~2X revenue and ~8X EBITDA

Tenet acquisition of Vanguard Health Systems

– Vanguard owns hospitals and clinics, provides clinical services

– 70% premium; both stocks rose sharply on news

WellPoint acquisition of CareMore for $800 million

– Valued at more than $10,000 per each managed patient life

– Expand strategy of transitional and chronic care management

Few public companies competing in the integrated healthcare space

Page 22: Integrated Healthcare for Better Patient Outcomes

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Why Invest Now?

Successfully capitalizing on changing healthcare dynamics

Proven ability to grow healthcare networks and operate under multiple payer models

Driving revenues through best-in-class medical management and operational efficiencies

Strengthened balance sheet provides foundation for growth

Promising future as model scales