The next presentation in this room will be:

1. The next presentation in this room will be: THE DORENFEST CHINA HEALTHCARE GROUP

2. AGENDA • THE DORENFEST GROUP • OVERVIEW OF BUSINESS OPPORTUNITIES IN CHINESE HEALTHCARE • THE DORENFEST APPROACH TO CHINA • DISCUSSION

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 2008 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

5. BRIEF SUMMARY OF SHELDON’S PAST EXPERIENCE IN H.I.T. (CONTINUED) • DONATED SHELDON I. DORENFEST & ASSOCIATES, LTD. TO THE HIMSS FOUNDATION TO FORM THE DORENFEST INSTITUTE FOR HEALTH INFORMATION TECHNOLOGY RESEARCH AND EDUCATION • THE DORENFEST INSTITUTE CONTAINS A LIBRARY OF HISTORIC DATA AND PUBLICATIONS FROM 1986 THROUGH 2004 WITH HIMSS ANALYTICS DONATING THE NEXT CURRENT YEAR OF DATA ANNUALLY • PROVIDES FREE DATA FOR RESEARCH PURPOSES ELECTRONICALLY AND IN PRINT TO UNIVERSITIES, STUDENTS, FEDERAL, STATE, LOCAL GOVERNMENT AS WELL AS GOVERNMENTS OF OTHER COUNTRIES • PROVIDES A VARIETY OF FREE REPORTS ON TRENDS IN H.I.T. USE • ENCOURAGES ONGOING RESEARCH INTO USING I.T. TO IMPROVE HEALTHCARE

6. 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

7. 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

8. HOULIHAN LOKEY 6TH ANNUAL HEALTHCARE CONFERENCE OVERVIEW OF BUSINESS OPPORTUNITIESIN CHINESE HEALTHCARE

9. 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

10. Medical Services Exam/Test Drug AVERAGE MEDICAL EXPENSE PER OUTPATIENT HOSPITAL VISIT $16 (126RMB) $15 (118RMB) $11.1 (85RMB) $5.1 (39RMB)

11. Medical Services Exam/Test Drug AVERAGE MEDICAL EXPENSE PER INPATIENT HOSPITAL STAY $601.4 (4661RMB) $552.8(4284RMB) $397(3083RMB) $215.2(1667RMB)

12. 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 • AT PRESENT, A PRIMARY CARE SYSTEM DOES NOT EXIST SEPARATELY FROM HOSPITALS • AS THE COUNTRY CHANGES ITS HEALTHCARE SYSTEM, THE COST OF HEALTHCARE TO THE COUNTRY WILL RISE RAPIDLY

13. CHINESE HOSPITALS HAVE PATIENT SERVICE AND QUALITY PROBLEMS • LONG WAITING TIMES • FEW ADVANCED APPOINTMENT SYSTEMS • AVERAGE TIME OF CONSULTATION IS 3-5 MINUTES • PHYSICAL ENVIRONMENTS ARE OFTEN CROWDED AND UNCLEAN • LACK OF PATIENT PRIVACY • POOR ATTITUDE TOWARD CUSTOMER SERVICE • COLLECTING MONEY AND MAKING PROFITS ARE TOO LARGE A FOCUS

14. 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

15. FOREIGNERS CAN HAVE DIFFICULTY IN CHINA • THE CHINESE ARE GREAT BUSINESS PEOPLE • THE RULES FOR BUSINESS ARE DIFFERENT IN CHINA • FOREIGNERS CAN BE IMPATIENT, CAUSING THEM TO MISS KEY ISSUES • THE CHINESE WANT TO LEARN FROM THE FOREIGNERS AS INEXPENSIVELY AS POSSIBLE • THE INVESTMENT ENVIRONMENT IS FRAUGHT WITH RISKS, AND THERE ARE LOTS OF WAYS TO LOSE MONEY IN CHINA • THERE ARE MANY INVESTORS AND LOOKERS IN HEALTHCARE IN CHINA, BUT THERE ARE FEW SUCCESSES

16. HOULIHAN LOKEY 6TH ANNUAL HEALTHCARE CONFERENCE THE DORENFEST APPROACH TO CHINA

17. THE DORENFEST APPROACH • CREATED A TWO-PHASE PROGRAM FOR CHINA • USE PHASE 1 TO LEARN HOW TO DO BUSINESS IN CHINESE HEALTHCARE MARKET AND TO CREATE VALUE IN CHINA FOR THE SKILLS WE BRING TO THEM • SELL AND DELIVER CONSULTING SERVICES FOCUSING ON H.I.T. RELATED ISSUES • H.I.T. IS A KEY TO MANY OF THE IMPROVEMENTS NEEDED IN CHINESE HEALTHCARE SYSTEMS AND IS WHAT WE ARE RECOGNIZED FOR THROUGHOUT THE WORLD • ENTER PHASE 2 IN 2008 BY MAKING SELECTIVE INVESTMENTS IN WELL-DEFINED, GOOD BUSINESS PROJECTS • SELF-FINANCING PHASE 1, BUT WILL BE RAISING ADDITIONAL FUNDS WHEN WE MOVE TO PHASE 2

18. THE DORENFEST GROUP VISION FOR CREATING A MODEL HOSPITAL IN CHINA • PROVIDES IMPROVED QUALITY OF CARE TO ITS PATIENTS • OPERATES AT A HIGHLY EFFICIENT LEVEL THROUGH EFFECTIVE USE OF SYSTEMS AND BETTER WORK PROCESSES • OFFERS ITS SERVICES TO PATIENTS AT AN AFFORDABLE COST • CREATES A HIGHLY SATISFIED PATIENT POPULATION WITH THE PATIENTS OBSERVING A NOTICEABLE IMPROVEMENT IN THE SERVICES AND TREATMENTS PROVIDED BY THE HOSPITAL • UTILIZES APPROPRIATE DIGITAL TECHNOLOGY TO CREATE A STATE OF THE ART “DIGITAL HOSPITAL”

19. CHINA BUSINESS OPERATIONS • HOSPITAL MANAGEMENT CONSULTING • OPERATIONS IMPROVEMENT • STRATEGIC PLANNING FOR NEW I.T. SYSTEMS • I.T. SYSTEM SELECTION • I.T. SYSTEM IMPLEMENTATION • WORK PROCESS IMPROVEMENT • MANAGEMENT TRAINING • OTHER SERVICES • GENERAL MANAGEMENT CONSULTING FOR HEALTHCARE COMPANIES • MARKET ANALYSES • PRODUCT STRATEGIES • MARKET RESEARCH • HOSPITAL CONTRACT MANAGEMENT • WORK WITH HOSPITALS NEEDING NEW MANAGEMENT (INTERIM OR LONG TERM) • IMPLEMENT NECESSARY MANAGEMENT PERSONNEL AND SUPPORT SYSTEMS • HOSPITAL OWNERSHIP AND IMPROVEMENT

20. CURRENT STATUS OF DORENFEST GROUP CHINA • FORMED DE RUI YI LIAO ZI XUN, A WFOE BASED IN SHANGHAI IN 2006 • RECENTLY COMPLETED PHASE I PROJECT TO HELP SHENZHEN HEALTH BUREAU PLAN ITS REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL PROJECTS • DEVELOPING OTHER PROJECT ACTIVITIES • REVIEWING CANDIDATES TO IMPLEMENT MODEL HOSPITAL VISION • NOW BUILDING A MANAGEMENT TEAM • DEVELOPING PARTNERING RELATIONSHIPS TO DELIVER SERVICES • REVIEWING SOFTWARE SYSTEMS IN CHINA AND OTHER COUNTRIES TO DEFINE THE BEST SOFTWARE AVAILABLE FOR IMPLEMENTATION IN CHINA TO PARTNER ON I.T. PROJECTS FOR HOSPITAL CLIENTS

21. INTRODUCTION TO CHINA • WHEN I FIRST CAME TO STUDY THE HEALTHCARE INDUSTRY IN CHINA IN LATE 2004, ATTITUDES TOWARD 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 MAKE MAJOR UPGRADES TO I.T. SYSTEMS • AT THAT TIME, THERE WAS VERY LIMITED BUYING OF MAJOR NEW I.T. SYSTEMS IN CHINESE HOSPITALS • DURING THE PAST 2 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 ELECTRONIC MEDICAL RECORDS, PACS AND OTHER SYSTEMS • BUT WEAK APPLICATION SOFTWARE AND IMPLEMENTATION SKILLS ARE DELAYING PROGRESS

22. 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 • CHINA HAS NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND INFRASTRUCTURE TO GET TO ITS PRESENT LEVEL OF I.T. USE. WHILE CHINA WOULD LIKE TO CONTINUE THIS APPROACH AS IT TAKES ITS NEXT STEPS FORWARD, CHINA’S I.T. GOALS WILL REQUIRE GREATER INVESTMENT

23. 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 • SO CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING HOW TO TAKE THEIR NEXT STEPS SUCCESSFULLY • FOR CHINA TO ACCOMPLISH ITS OBJECTIVE SUCCESSFULLY REQUIRES THE FOLLOWING: • OVERCOMING RESISTANCE TO CHANGE • KNOWING HOW TO MANAGE CHANGE • LEARNING FROM THE U.S. EXPERIENCE • DOING MORE OF WHAT THE U.S. DID RIGHT AND NOT MAKING U.S. MISTAKES • DEVELOPING EXPERTISE IN AREAS OF NEED

24. THANK YOU. FOR MORE INFORMATION CONTACT: SHELDON I. DORENFEST THE DORENFEST CHINA THE DORENFEST GROUP HEALTHCARE GROUP NBC TOWER, SUITE 2725 RENMIN ROAD NO. 988 455 N. CITYFRONT PLAZA. DRIVE JINGTIANDI INTERNATIONAL TOWER CHICAGO, IL 60611-5555 SUITE 908 UNITED STATES OF AMERICA SHANGHAI, CHINA PHONE: 312-464-3000 PHONE: 13816109802 FAX: 312-467-0541 WEB SITE ADDRESS: www.dorenfest.com SHELDON’S E-MAIL ADDRESS: sheldon@dorenfest.com E-MAIL ADDRESS: info@dorenfest.com