Alternate Site of Care

1. Alternate Site of Care Kuwait Healthcare Reform 2009 Presented by Julie B. Decker Managing Director, Lynxcom Partners Operating Partner, Director of Healthcare Practice, FocalPoint Partners

2. Agenda Healthcare Market and Growing Costs Defining the Alternate Site of Care Home Infusion Ambulatory Infusion Centers Hospice Home Health

3. Introduction: Julie Decker • FocalPoint Partners – Operating Partner & Director Healthcare Practice • Largest independently-owned investment bank in Southern California, founded in 2002, with offices in Los Angeles and New York • Run by seasoned veterans, with backgrounds in: • Distressed markets • Turnaround management • Private equity • Investment banking • LynxComPartners – Managing Director • Healthcare consulting firm based in San Diego providing M&A advisory, global sales development, marketing organizations, financial turnaround with expertise in: • Alternate site and home health • Biotechnology and life sciences • Pharmacy, nursing and DME • Law • Public accounting • Strategy consulting • Senior lending • Payer relations, reimbursement and regulatory affairs • Business development and operations • Healthcare information services

4. Healthcare Relationships

5. Healthcare Relationships

6. US Healthcare Expenditures Have Grown 65% in 7 Years

7. US Healthcare Market Overview

8. US Leads Global Healthcare Spending Healthcare Expenditures as Percent of Gross Domestic Product

9. Multiple Factors Drive Increasing Costs

10. Greatest Spend is on Hospital Care 2007 Total Expenditure = $2.241 trillion USD

11. High Hospital Costs Require an Alternative

12. Timing for Market Entry

13. Alternate Site of Care Traditional Sites of Care Alternate Site of Care • Hospital Inpatient • Physician Office • Hospital Outpatient • Aggregating disease-specific patients into centers to provide cost effective care • Hospital without walls • Dialysis • Surgery Centers • Infusion Centers • Home Care • Skilled Nursing facilities • Emergency Room • Urgent Care • Retail Clinic

14. Home Infusion

15. Home Infusion • Pharmacy-based, decentralized patient care • Expertise in sterile drug compounding • Provides care to patients with acute or chronic conditions in home and alternate sites • Services include: • Professional pharmacy services • Care coordination • Infusion nursing services • Supplies and equipment

16. Home Infusion • 4,000 pharmacies nationwide • Market size $12 Billion • Types • Hospital based infusion pharmacy • National chains • Independent - local and regional • Most are Accredited by JCAHO, CHAP, ACHC

17. Home Infusion Pharmacy USP 797-Compliant Sterile Compounding

18. Ambulatory Infusion Centers

19. Ambulatory Infusion Centers • Often providing ongoing therapy for chronically ill patients • Rheumatoid arthritis • Multiple sclerosis • Neuromuscular disease • Immune deficiency • Crohn’s disease • Psoriasis • Oncology • Common drugs provided • ABC • Rituximab • Remicade (3) • IVIG • Orencia • Tysabri • Methotrexate • SoluMedrol

20. AIC Clinical Services • Administration of infusible and injectable therapies • Biologicals • Oncology therapies • Anti-infectives • Patient and caregiver instruction on self-injection • PICC and peripheral line placement • Additional clinical services • Clinical trials • Hospital inpatient bed-day reduction programs • Diagnostics and imaging • Vaccinations and flu shots • Wound care • PT/OT

21. AIC Home Infusion Physician Office Managing the Nursing Shortage • One to many relationship (4:1) • Reduces costs • Improves efficiencies • Manages the nursing shortage

22. X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Determining Locations • AIC placement determined by understanding utilization: • Patient population • Disease • Drug/Therapy • Physician Spend • Geography MD MD MD MD MD MD = AIC location = prescriber location = patient location MD X

23. Hospice

24. Hospice • End of life and palliative care • Major healthcare costs are at the end of the patient’s life • Hospice offers cost savings by treating terminal patients at home • Rx, RN, pain management, social services • Covered as a Medicare benefit in 1986 • Adopted by commercial payers

25. Hospice Utilized during last 6 months of life Difficult to determine prognosis

26. Home Health Care

27. Home Health Care • High-touch patient care in the home • Low cost alternative to facility-based care • Provides access to care for the homebound and non-ambulatory • Licensed in accordance with State or local law

28. Home Health Care Services include:

29. Selecting Care Setting

30. Alternate Site of Care • How to decide which patients are appropriate for alternate site • Clinical factors: high-risk, severity • Home setting: appropriate assessment • Support/caregiver factors • Understanding utilization • Patient populations and costs • Disease states • Utilization of drugs and services • Geographic distribution of patients

31. Payers Recognize the Importance of the Alternate Site of Care • Medicare • Medicaid • Commercial payers • ER Triage • Bed Day Reduction • Reimbursement is covered in alternate sites of care

32. Conclusion Understanding patient populations is key Know the costs associated with the major diseases and therapies Building hospitals without walls will reduce administrative costs Patients respond positively to care in the home Alternate site improves patient wellbeing