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Integrated Healthcare for Better Patient Outcomes Apollo Medical Holdings, Inc. LD Micro Invitational June 4, 2014 OTC-QB: AMEH

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Presentation on theme: "Integrated Healthcare for Better Patient Outcomes Apollo Medical Holdings, Inc. LD Micro Invitational June 4, 2014 OTC-QB: AMEH"— Presentation transcript:

1 Integrated Healthcare for Better Patient Outcomes Apollo Medical Holdings, Inc. LD Micro Invitational June 4, 2014 OTC-QB: AMEH

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. 2

3 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 3

4 Operational Overview 4 Physicians Providing Direct Patient Care ApolloMed Medical and Business Management

5 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 5

6 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 6

7 7 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

8 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 Focus on optimal length of stay * Medicare National Reference Publication as reported in Pioneer ACO Dashboard, April 2013 8

9 Inpatient Solution Advantages Advantage for Health Plans Advantage 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 9 Advantage for Patients  Streamlines the healthcare continuum  Facilitates access to quality access  Increases time with physicians  Generates better outcomes  Creates greater satisfaction

10 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 10

11 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 11

12 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) 12  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

13 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 13

14 Recent Accomplishments July 2013 September 2013 October 2013 December 2013 March 2014 April 2014 Launches Maverick Medical Group Partners with Mission 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 Aid for community-based health treatment Launches ApolloMed Care Clinics Receives $12 million Investment from Fresenius 14

15  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. Creem Chief Financial Officer Mark Meyers Chief Strategy Officer & Director Adrian Vazquez, M.D. Chief Medical Officer Edward Rotan Senior Vice President, Maverick Medical Group 15

16  CEO of SCAN, 10 th 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 Augusta Executive Chairman Ted Schreck Director Mitchell R. Cream Director Suresh Nihalani Director David Schmidt Director 16  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

17 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 17

18 Improving Top Line and Bottom Line 18  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

19 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 19

20 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 20

21 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 21

22 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 22

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