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Healthcare Finance 101 - Web Clinic – 11.16.2016

ÜMedical Practice Finance 101

Ü Clinic designed to help Healthcare Stakeholders with their Financing Needs

Ü “Thought, Theory & Insights” of Medical Practice Financing

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Agenda❶ Presenters

❷ Preface

❸ Decreasing Revenue the face of

❹ Funding Denial

❺ Funding Approval + More Cash

❻ Implementing One Revenue Enhancement – Nate Hollander

❼ Conclusion, Q&A, Plan Forward

Ü Demands for Improved Patient OutcomesÜ Payor SystemsÜ Discerning & Decreasing Patient Population

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Presenters

Healthcare CapitalGreg GriceManaging Directorgreg.grice@gp-assoc.com

Charles PopeCertified Commercial Lender #1248 Managing DirectorCharles.h.pope@gp-assoc.com

Grice, Pope & Associates, Inc.

Ø $453M +/- institutional funding

Ø $272M +/- non-traditional funding

Ø $192M + self funding vehicles

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Loan Mechanics

Ü Three C’s

Ü Collateral

Ü Practice Valuation - Intangibles

Ü Cash Flow

Ü Payback

Ü Implementation

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Payors’ Preferences

ü Payers are demanding better outcomes; practices must be more productive,

ü Patient population is needier than ever

ü Chronic disease management, (Diabetes, Heart Disease, COPD, Stroke, Chronic Kidney Disease)

ü Revenue Enhancements and the services they provide have become essential

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Funding Approval/Denial

1.17

1.32

1.46

1.61

1.76

0 1 2 3 4

1.17 1.32 1.46 1.61 1.76

$12,000 $13,500 $15,000 $16,500 $18,000

Increased Debt Service Coverage f(Revenue Enhancements)

Loan size; avg 1 provider term loan $1,000,000

Term, 10 Years 120

Int Rate Level term 4.25%

Mo Pmt Monthly $10,244

Revenue Enhancement 1 Service $1,500

Revenue Enhancements CADS DSCR

Current $12,000 1.17

One Service $13,500 1.32

Two Services $15,000 1.46

Three Services $16,500 1.61

Four Services $18,000 1.76

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Funding Approval & Increased Cash

$976,205

$1,098,230

$1,220,256

$1,342,281

$1,464,307

0 1 2 3 4

$12,000 $13,500 $15,000 $16,500 $18,000

Cash Available f(Revenue Enhancements)

CADS Services Loan Size Pmt

$12,000 0 $976,205 $10,000.0

$13,500 1 $1,098,230 $11,250.0

$15,000 2 $1,220,256 $12,500.0

$16,500 3 $1,342,281 $13,750.0

$18,000 4 $1,464,307 $15,000.0

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Benefits

ü Earn extra income for your practice with no additional capital outlay or staffing costs, yet, all tests performed by licensed technicians

ü Retain patients “in-house” for both allergy testing and treatment, rather than referring them to a specialist or allergist

ü Provide a convenient, on-site allergy testing clinic right in your office

ü Treat patients and monitor their immunotherapy program

ü Test and treat any patient over two years old

ü Patients receiving quality care refer their friends growing patient base

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v Licensed techniciansv Board certified neurologists or radiologists

• Radiating pain• Headaches• Neck & Shoulder pain• Back Pain• Carpal Tunnel Syndrome• Myelopathies• Neuropathies• Skin Disturbances• Sciatica• Sensory Loss• Muscle Weakness• Entrapments• Paresthesia

Retain Patients & Revenue• Nerve Conduction Velocity• Evoked Potentials• Balance Testing – VNG• Ambulatory EEG• Routine EEG• General Ultrasound• Abdominal• Arterial• Carotid• Duplex Arterial• Echocardiogram• Thyroid• Transcranial Doppler• Venous• Musculoskeletal Ultrasound

Tests

Neurological and Ultrasound

Conclusion

Ø Additional Revenue, bring DSCR into Loan Approval

- No Cost to implement

- Comply w/Payor Systems

- Increase Patient Volume

- No drain on staff

Ø Earlier Debt Retirement

Ø Increased Valuation of Business for Exit

Ø Additional Cash Available for Growth

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Questions, Answers & Path Forward GPA

Contact & Conferences

Healthcare CapitalGreg GriceManaging Directorgreg.grice@gp-assoc.com

Direct: 727-455-7922

Charles PopeCertified Commercial Lender #1248 Managing Directorcharles.h.pope@gp-assoc.com

Direct: 772-260-6731

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