CHINA HEALTHCARE TECHNOLOGY DELEGATION VISIT

1. CHINA HEALTHCARE TECHNOLOGYDELEGATION VISIT MARCH 4, 2008 WASHINGTON, D.C. OPPORTUNITIES IN CHINA HEALTHCARE

2. AGENDA • ABOUT THE DORENFEST GROUP • OVERVIEW OF OPPORTUNITIES IN CHINA HEALTHCARE • CHINA H.I.T. MARKET • SUMMARY • QUESTIONS AND ANSWERS

3. THE DORENFEST GROUP • HEALTHCARE CONSULTING AND INVESTMENT FOCUS • OFFER HEALTHCARE IMPROVEMENT SERVICES TO SUPPORT A MORE POSITIVE WORLD FUTURE • HELP HEALTHCARE ORGANIZATIONS TO IMPROVE HEALTHCARE SERVICES WHILE REDUCING COSTS BY IMPROVING WORK PROCESSES, MANAGEMENT SYSTEMS, SERVICES TO PATIENTS, AND QUALITY OF MEDICAL CARE • IN 2006 THE DORENFEST GROUP FORMED THE DORENFEST CHINA HEALTHCARE GROUP, BASED IN SHANGHAI, TO BRING OUR SKILL, TECHNOLOGY, AND CAPITAL TO CHINA IN A TWO-PHASE PROGRAM • WE ARE NOW OPERATING IN PHASE 1 OF THIS PROGRAM, OFFERING A VARIETY OF CONSULTING, TRAINING, AND EDUCATION SERVICES TO THE CHINA HEALTHCARE SYSTEM • WE EXPECT TO ENTER PHASE 2 OF OUR ACTIVITIES IN CHINA IN 2009 WHEN WE WILL BEGIN TO MAKE INVESTMENTS IN WELL-DEFINED, GOOD BUSINESS PROJECTS, IN PARTNERSHIP WITH CHINESE HEALTH BUREAUS AND HOSPITALS

4. BRIEF SUMMARY OF SHELDON’S PAST EXPERIENCE IN H.I.T. • FORMED COMPUCARE 1969; CEO 1969-1976 • FORMED SHELDON I. DORENFEST & ASSOCIATES, LTD. IN 1976; CEO 1976-2004 • LONG, RICH HISTORY OF MAJOR CONTRIBUTIONS TO HEALTHCARE I.T. UNDERSTANDING AND PROGRESS • WAS RECOGNIZED AS THE LEADING SOURCE OF INFORMATION ABOUT HEALTHCARE I.T. AND A LEADING HEALTHCARE CONSULTING FIRM • KEY BUSINESS UNITS INCLUDED THE DORENFEST INTEGRATED HEALTHCARE SYSTEM DATABASE™ AND HOSPITAL OPERATIONS IMPROVEMENT AND MEDICAL SUPPLIER CONSULTING • SOLD THE DORENFEST INTEGRATED HEALTHCARE DELIVERY SYSTEM+ (IHDS+) DATABASE™ TO HIMSS ANALYTICS IN JULY, 2004 • DONATED ASSETS TO THE HIMSS FOUNDATION TO FORM THE DORENFEST INSTITUTE FOR HEALTH INFORMATION TECHNOLOGY RESEARCH AND EDUCATION.

5. DORENFEST ACTIVITIES IN OTHER COUNTRIES • CONDUCT MARKET STUDIES AND CONSULTING ASSIGNMENTS ON USE OF INFORMATION TECHNOLOGY IN HEALTH CARE IN A NUMBER OF COUNTRIES • CONDUCT WORLDWIDE STUDIES COMPARING THE STATE OF THE ART IN HEALTH CARE I.T. • CONTINUOUSLY MONITOR AND UPDATE OUR UNDERSTANDING OF WORLDWIDE HEALTH CARE I.T. THROUGH A VARIETY OF ONGOING ACTIVITIES: • IN-PERSON AND TELEPHONE DISCUSSIONS WITH NUMEROUS HOSPITAL EXECUTIVES AND I.T. SUPPLIER PERSONNEL • REVIEW OF I.T. IN USE AT HOSPITALS THROUGHOUT THE WORLD • WORLDWIDE EDUCATIONAL SERVICES

6. DORENFEST INVESTIGATION OF HEALTHCARE IN CHINA • VISITED 17 CITIES IN CHINA • VISITED WITH HUNDREDS OF LEADERS IN THE HEALTHCARE INDUSTRY IN CHINA TO LEARN ABOUT HEALTHCARE REFORM IN CHINA – ITS PROGRESS, ITS PROBLEMS, AND ITS NEXT STEPS • VISITED WITH OVER 100 HOSPITALS TO GAIN AN UNDERSTANDING OF HOSPITAL OPERATIONS IN CHINA, THEIR CURRENT STATUS, AND OPPORTUNITIES FOR IMPROVEMENTS • VISITED WITH PROVINCIAL AND CITY HEALTH BUREAUS TO LEARN WHAT THEIR GOALS ARE FOR THEIR PROVINCIAL AND CITY HOSPITALS • VISITED PRIVATE HOSPITALS TO OBSERVE THE RESULTS OF HEALTHCARE REFORM PRIVATIZATION EFFORTS IN CHINA • VISITED WITH COMPANIES SELLING PRODUCTS AND SERVICES TO THE HEALTHCARE INDUSTRY IN CHINA AND WHAT THEY BELIEVE ARE APPROPRIATE NEXT STEPS FOR REFORMING THE CHINESE HEALTHCARE SYSTEM • EVALUATED A GROUP OF HOSPITAL MANAGEMENT AND OWNERSHIP OPPORTUNITIES THAT WERE PRESENTED TO THE DORENFEST GROUP TO BECOME MORE FAMILIAR WITH THE ALTERNATIVE WAYS TO PROCEED IN BUILDING A “MODEL HOSPITAL” IN CHINA • DEVELOPED A STRATEGY FOR BRINGING DORENFEST SKILL AND EXPERIENCE TO CHINA

7. CHINA HEALTHCARE TECHNOLOGY DELEGATION VISIT OVERVIEW OF OPPORTUNITIES IN CHINA HEALTHCARE

8. 7.00% 5.55% 9.00% $276.9 (2146 RMB) $97.0 (759 RMB) $356.0 (2759 RMB) Government Social Insurance Out-of-pocket 5.62% $84.9 (659 RMB) 5.13% $59.1 (459 RMB) 5.51% 3.69% $74.7 (579 RMB) $27.8 (216 RMB) 4.03% $9.6 (75 RMB) 3.17% $1.8 (14 RMB) HEALTHCARE COST AS A PERCENT OF GDP ($ AND RMB IN BILLIONS) $ in Billions RMB in Billions 3,000 2,500 2,000 1,500 1,000 500 0 30,000 25,000 20,000 15,000 10,000 5,000 0 Forecast at 7% of GDP Forecast at 9% of GDP SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK

9. Medical Services Exam/Test Drug AVERAGE MEDICAL EXPENSE PER OUTPATIENT HOSPITAL VISIT $16 (126RMB) $15 (118RMB) $11.1 (85RMB) $5.1 (39RMB) SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK

10. Medical Services Exam/Test Drug AVERAGE MEDICAL EXPENSE PER INPATIENT HOSPITAL STAY $601.4 (4661RMB) $552.8(4284RMB) $397(3083RMB) $215.2(1667RMB) SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK

11. CHALLENGES OF THE CHINESE HEALTHCARE SYSTEM • ALMOST 60% OF ALL HEALTHCARE COSTS ARE PAID BY PATIENTS OUT-OF- POCKET • LACK OF MEDICAL INSURANCE OPTIONS • LOW GOVERNMENT FUNDING • ACCESS TO HEALTHCARE FOR THE POOR IS LIMITED • THE MIDDLE AND UPPER CLASSES ARE DISSATISFIED WITH HEALTHCARE SERVICES • THE WAY DOCTORS EARN THEIR INCOME RESULTS IN A WEAK DOCTOR-PATIENT RELATIONSHIP • DRUGS AND DIAGNOSTIC TESTS ARE TOO IMPORTANT TO THE FUNDING OF THE HEALTHCARE SYSTEM • HOSPITALS NEED TO MAKE PROFITS TO SUPPORT THEMSELVES • PRIMARY CARE IS NOW IN THE EARLY STAGES OF BEING OFFERED SEPARATELY FROM HOSPITALS THROUGH NEWLY DEVELOPED COMMUNITY CLINICS • AS THE COUNTRY CHANGES ITS HEALTHCARE SYSTEM, THE COST OF HEALTHCARE TO THE COUNTRY WILL RISE RAPIDLY

12. CURRENT ENVIRONMENT CREATES BUSINESS OPPORTUNITIES IN CHINESE HEALTHCARE • THERE IS RAPID GROWTH IN HEALTHCARE SPENDING AND A DESIRE TO IMPROVE HEALTHCARE SERVICES • THERE IS A DESIRE TO MOVE TOWARD INTERNATIONAL STANDARDS FOR SERVING THE GROWING MIDDLE CLASS AND WEALTHY POPULATION • THERE IS LIMITED SKILL IN CHINA TO ACCOMPLISH CHINA’S HEALTHCARE IMPROVEMENT OBJECTIVES • FOREIGN SKILLS ARE CONSIDERED IMPORTANT AND MANY UNIVERSITIES AND HOSPITALS ARE HELPING BY BRINGING THEIR SKILLS TO CHINA

13. CHINA HEALTHCARE TECHNOLOGY DELEGATION VISIT CHINA H.I.T. MARKET

14. U.S. H.I.T. HAS GONE THROUGH 4 GENERATIONS • FINANCE SYSTEMS (1970s) • LIMITED CLINICAL SYSTEMS (LATE 1970s AND 1980s) • MORE ADVANCED CLINICAL SYSTEMS (1990s) • ELECTRONIC HEALTH RECORDS (2000s)

15. THE DORENFEST GROUP’S INTRODUCTION TO CHINA • WHEN WE FIRST CAME TO CHINA IN LATE 2004 TO STUDY THE HEALTHCARE INDUSTRY, ATTITUDES TOWARDS H.I.T. WERE VERY CONSERVATIVE: • HOSPITAL MANAGEMENT WAS NOT HAPPY WITH I.T. SYSTEMS IN USE • FUNCTIONALITY OF APPLICATION SOFTWARE AVAILABLE FOR PURCHASE IN CHINA WAS VERY LIMITED AND THE MOST FUNCTIONAL SYSTEMS WERE SELF-DEVELOPED • THE SKILLS TO MANAGE MAJOR I.T. UPGRADES WERE FELT TO BE IN SHORT SUPPLY • AS A RESULT, HOSPITAL MANAGEMENT WAS HESITANT TO INVEST IN MAJOR UPGRADES TO I.T. SYSTEMS • FOR THESE REASONS, THERE WAS VERY LIMITED BUYING OF MAJOR NEW I.T. SYSTEMS IN CHINESE HOSPITALS IN EARLY 2005 • DURING THE PAST 3 YEARS, THE SITUATION HAS CHANGED • MANY HOSPITALS ARE CONSIDERING MAJOR UPGRADES OF I.T. SYSTEMS • BIG BUDGETS ARE STARTING TO BECOME AVAILABLE TO MOVE TOWARD DIGITAL HOSPITALS WITH PHYSICIAN WORKSTATIONS, ELECTRONIC MEDICAL RECORDS, PACS, AND OTHER SYSTEMS • BUT WEAK APPLICATION SOFTWARE AND IMPLEMENTATION SKILLS ARE DELAYING PROGRESS

16. CHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATION • CHINA HOSPITAL WORK PROCESSES ARE REDUNDANT AND ERROR PRONE WITH GREAT OPPORTUNITIES FOR IMPROVEMENT THROUGH APPROPRIATE USE OF I.T. • CHINESE HOSPITALS WOULD LIKE TO TAKE A BIG LEAP FORWARD IN IMPROVING WORK PROCESSES AND IN DIGITIZING ITS HOSPITALS • THE MINISTRY OF HEALTH’S GUIDELINES FOR HEALTH I.T. DEVELOPMENT (2003-2010) CALLS FOR ELECTRONIC MEDICAL RECORDS AND REGIONAL HEALTH NETWORKS TO BE IMPLEMENTED PROVIDING MUCH MOMENTUM FOR HOSPITALS AND HEALTH BUREAUS TO INVEST MORE IN I.T. NOW • CHINESE HOSPITALS HAVE NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND INFRASTRUCTURE TO GET TO THE PRESENT LEVEL OF I.T. USE. WHILE CHINA WOULD LIKE TO CONTINUE THIS APPROACH AS IT TAKES ITS NEXT STEPS FORWARD, CHINESE HOSPITAL I.T. GOALS WILL REQUIRE GREATER INVESTMENT

17. CHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATION (CONTINUED) • THERE IS CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE READINESS OF H.I.T. SOFTWARE PRODUCTS, HARDWARE PLATFORMS, AND INTEGRATION TOOLS TO FACILITATE THE ACCOMPLISHMENT OF CHINA’S GOALS • THERE IS ALSO CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE IMPLEMENTATION SKILL AND EXPERIENCE AVAILABLE IN CHINA TO TAKE THIS BIG LEAP FORWARD THAT IS NOW UNDERWAY • LIKE THE U.S., IMPLEMENTATION OF NEW I.T. SYSTEMS IN CHINA HAS OFTEN ADDED WORK INSTEAD OF REDUCING WORK, AND HAS CREATED UNNECESSARILY REDUNDANT WORK PROCESSES • SOMETIMES HOSPITAL LEADERSHIP, NOT KNOWING WHAT IT DOES NOT KNOW, IS USING POOR IMPLEMENTATION APPROACHES BECAUSE THEY DO NOT KNOW BETTER WAYS ARE POSSIBLE, AND THERE IS A STRONG MOMENTUM TO CONTINUE WITH CURRENT APPROACHES • SO CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING HOW TO TAKE THEIR NEXT STEPS SUCCESSFULLY

18. CHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATION (CONTINUED) • FOR CHINA TO ACCOMPLISH ITS OBJECTIVES IN H.I.T. REQUIRES THE FOLLOWING: • OVERCOMING RESISTANCE TO CHANGE • KNOWING HOW TO MANAGE CHANGE • LEARNING FROM THE GLOBAL EXPERIENCE • DOING MORE OF WHAT THE REST OF THE WORLD DID RIGHT AND LESS OF WHAT THEY DID WRONG TO AVOID THE MISTAKES OF OTHER COUNTRIES • DEVELOPING EXPERTISE IN AREAS OF NEED

19. CHINA HEALTHCARE TECHNOLOGY DELEGATION VISIT SUMMARY

20. SUMMARY • CHINA IS TAKING MAJOR STEPS FORWARD IN HEALTHCARE SYSTEM IMPROVEMENT • FOREIGN SKILL IS NEEDED TO HELP CHINA AVOID MISTAKES OF OTHERS • MANY OPPORTUNITIES TO HELP • BUT THERE IS A NEED TO BE CAREFUL TO BE SUCCESSFUL

21. THANK YOU. FOR MORE INFORMATION CONTACT: SHELDON I. DORENFEST OR YU ZHIYUAN (GRACE) THE DORENFEST CHINA HEALTHCARE GROUP SUITE 908, NO. 998 RENMIN ROAD, SHANGHAI PHONE: 021-63203522, 63269722 WEB SITE ADDRESS: www.dorenfest.com E-MAIL ADDRESS: info@dorenfest.com SHELDON’S E-MAIL ADDRESS: sheldon@dorenfest.com YU ZHIYUAN (GRACE) : yuz@dorenfest.com