integrated healthcare for better patient outcomes
DESCRIPTION
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 PresentationTRANSCRIPT
Integrated Healthcare for Better Patient Outcomes
Apollo Medical Holdings, Inc.
LD Micro InvitationalJune 4, 2014
OTC-QB: AMEHwww.apollomed.net
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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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