1. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP CHINA HEALTH INFORMATION MANAGEMENT DELEGATION EVOLUTION OF GLOBAL H.I.T. AND WHAT IT MEANS TO CHINA CHICAGO, ILLINOIS NOVEMBER 25, 2009

2. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 2 TODAY’S AGENDA ABOUT THE DORENFEST GROUP AND ITS CHINA BUSINESS APPROACH ABOUT THE DORENFEST GROUP AND ITS CHINA BUSINESS APPROACH LEARNING FROM THE H.I.T. EXPERIENCE OF OTHER COUNTRIES LEARNING FROM THE H.I.T. EXPERIENCE OF OTHER COUNTRIES THE EVOLUTION OF RHNs AROUND THE WORLD THE EVOLUTION OF RHNs AROUND THE WORLD THE CURRENT STATUS OF I.T. USE IN CHINESE HOSPITALS THE CURRENT STATUS OF I.T. USE IN CHINESE HOSPITALS EVOLUTION OF RHNs IN CHINA EVOLUTION OF RHNs IN CHINA SUGGESTIONS TO HELP CHINESE HOSPITALS LEADERS MAKE MORE PROGRESS IN H.I.T. USE SUGGESTIONS TO HELP CHINESE HOSPITALS LEADERS MAKE MORE PROGRESS IN H.I.T. USE Q&A Q&A

3. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 3 THE DORENFEST GROUP HEALTHCARE CONSULTING AND INVESTMENT FOCUS HEALTHCARE CONSULTING AND INVESTMENT FOCUS OFFER HEALTHCARE IMPROVEMENT SERVICES TO SUPPORT A MORE POSITIVE WORLD FUTURE 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 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 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 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 LATE 2010 OR 2011 WHEN WE WILL BEGIN TO MAKE INVESTMENTS IN WELL-DEFINED, GOOD BUSINESS PROJECTS, IN PARTNERSHIP WITH CHINESE HEALTH BUREAUS AND HOSPITALS WE EXPECT TO ENTER PHASE 2 OF OUR ACTIVITIES IN CHINA IN LATE 2010 OR 2011 WHEN WE WILL BEGIN TO MAKE INVESTMENTS IN WELL-DEFINED, GOOD BUSINESS PROJECTS, IN PARTNERSHIP WITH CHINESE HEALTH BUREAUS AND HOSPITALS

4. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 4 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 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. 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: 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 WORLDWIDE EDUCATIONAL SERVICES

5. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 5 DORENFEST PRE-ENTRY INVESTIGATION OF HEALTHCARE IN CHINA 1.IN 2005 AND THE SPRING OF 2006, WE VISITED 17 CITIES IN CHINA 2.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 3.VISITED WITH OVER 100 HOSPITALS TO GAIN AN UNDERSTANDING OF HOSPITAL OPERATIONS IN CHINA, THEIR CURRENT STATUS, AND OPPORTUNITIES FOR IMPROVEMENTS 4.VISITED WITH PROVINCIAL AND CITY HEALTH BUREAUS TO LEARN WHAT THEIR GOALS ARE FOR THEIR PROVINCIAL AND CITY HOSPITALS 5.VISITED PRIVATE HOSPITALS TO OBSERVE THE RESULTS OF HEALTHCARE REFORM PRIVATIZATION EFFORTS IN CHINA 6.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 7.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 8.DEVELOPED A STRATEGY FOR BRINGING DORENFEST SKILL AND EXPERIENCE TO CHINA

6. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 6 SOME RECENT CLIENT EXAMPLES IN CHINA EXAMPLES OF HEALTH BUREAU CLIENTS EXAMPLES OF HEALTH BUREAU CLIENTS –SHENZHEN –CHONGQING EXAMPLES OF HOSPITAL CLIENTS EXAMPLES OF HOSPITAL CLIENTS –SHANGHAI CHANGNING MATERNITY AND INFANT HEALTH INSTITUTE –PEKING UNIVERSITY MEDICAL COLLEGE #3 HOSPITAL –RIZHAO CITY PEOPLE’S HOSPITAL EXAMPLES OF HELPING CLIENTS FROM OTHER LOCATIONS TO BRING THEIR SKILLS TO MAINLAND CHINA EXAMPLES OF HELPING CLIENTS FROM OTHER LOCATIONS TO BRING THEIR SKILLS TO MAINLAND CHINA –HONG KONG HOSPITAL AUTHORITY –MICROSOFT

7. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 7 CHINA HEALTH INFORMATION MANAGEMENT DELEGATION LEARNING FROM THE H.I.T. EXPERIENCE OF OTHER COUNTRIES

8. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 8 U.S. HEALTHCARE COSTS AS A PERCENT OF GDP ($ IN BILLIONS) SOURCE: CENTERS FOR MEDICARE AND MEDICAID SERVICES GDP1970-2004 (not ‘75) $ 75.1 245.8426.8696.0990.31,299.51,877.6 $1,987.7 $75.1 $245.8 $426.8 $696.0 $990.3 $1,299.5 CMS Forecast 15% 10% 5% 0% 20% $4,043.6 19701975198019851990199520002005 20.0% 2015

9. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 9 $ in billions $16.0 $19.0 $21.6 $20.0 Actual $18.5 17.6%15.6%2.7% ANNUAL GROWTH RATE: 8.0%5.2% $23.6 $25.8 Forecast 2006 9.3% $28.0 8.9% $30.5 8.9% U.S. H.I.T. MARKET TRENDS ($ IN BILLIONS) $13.6 17.2% $11.6 $10.0 $8.5 $7.5 16.0%17.6%13.3%6.7% SOURCE: SHELDON I. DORENFEST & ASSOCIATES, LTD.

10. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 10 OPPORTUNITIES TO IMPROVE THE HEALTHCARE DELIVERY PROCESS HAVE BEEN PURSUED FOR MANY YEARS GREAT REDUNDANCY OF INFORMATION GREAT REDUNDANCY OF INFORMATION HIGH ERROR POTENTIAL HIGH ERROR POTENTIAL LACK OF TIMELINESS LACK OF TIMELINESS HIGH COST HIGH COST ORGANIZATION COMPLEXITY ORGANIZATION COMPLEXITY

11. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 11 U.S. HOSPITALS STARTED USING H.I.T. IN THE 1960s AND SOUGHT AN EHR THROUGH FOUR GENERATIONS OF I.T. SYSTEMS FINANCE SYSTEMS FINANCE SYSTEMS LIMITED CLINICAL SYSTEMS LIMITED CLINICAL SYSTEMS MORE ADVANCED CLINICAL SYSTEMS MORE ADVANCED CLINICAL SYSTEMS ELECTRONIC HEALTH RECORDS ELECTRONIC HEALTH RECORDS

12. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 12 BUT POORLY IMPLEMENTED CHANGE LAYERED REDUNDANT WORK ON TOP OF ORIGINAL INEFFICIENCY Legacy I.T. Systems Manual BEFORE I.T.=1x 2x 3x 4x GROWTH IN REDUNDANCY TOTAL HOSPITAL WORK PROCESS

13. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 13 U.S. HAS MADE MORE PROGRESS RECENTLY TODAY OVER 100 HOSPITALS HAVE IMPLEMENTED CPR WITH CPOE TODAY OVER 100 HOSPITALS HAVE IMPLEMENTED CPR WITH CPOE MANY OTHERS ARE IMPLEMENTING CPR AND CPOE RIGHT NOW MANY OTHERS ARE IMPLEMENTING CPR AND CPOE RIGHT NOW I.T. IS A MAJOR TOOL FOR IMPROVING HOSPITAL PERFORMANCE I.T. IS A MAJOR TOOL FOR IMPROVING HOSPITAL PERFORMANCE

14. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 14 BUT U.S. HOSPITALS HAVE BEEN INEFFICIENT INVESTORS OVERSIMPLIFICATION OF I.T. INVESTMENT CONSIDERATIONS (I.E., DID NOT KNOW WHAT THEY DID NOT KNOW) OVERSIMPLIFICATION OF I.T. INVESTMENT CONSIDERATIONS (I.E., DID NOT KNOW WHAT THEY DID NOT KNOW) POOR PROJECT PLANNING POOR PROJECT PLANNING IMPROPER ASSESSMENT OF SOFTWARE PRODUCT CAPABILITIES IMPROPER ASSESSMENT OF SOFTWARE PRODUCT CAPABILITIES IMPLEMENTED A SERIES OF “1/2 SYSTEMS” WITHOUT PROPERLY REDESIGNING THE WORK PROCESS IMPLEMENTED A SERIES OF “1/2 SYSTEMS” WITHOUT PROPERLY REDESIGNING THE WORK PROCESS INDUSTRY MANAGEMENT DID NOT LEARN ENOUGH FROM PAST MISTAKES, AND THEREFORE, CONTINUED TO REPEAT THE SAME MISTAKES INDUSTRY MANAGEMENT DID NOT LEARN ENOUGH FROM PAST MISTAKES, AND THEREFORE, CONTINUED TO REPEAT THE SAME MISTAKES THIS LEFT THE NATION WITH REDUNDANT, CONVOLUTED, EXPENSIVE, ERROR PRONE WORK PROCESSES THAT PRESENTLY CRIPPLE THE COUNTRY’S HEALTHCARE SYSTEM THIS LEFT THE NATION WITH REDUNDANT, CONVOLUTED, EXPENSIVE, ERROR PRONE WORK PROCESSES THAT PRESENTLY CRIPPLE THE COUNTRY’S HEALTHCARE SYSTEM

15. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 15 H.I.T. EVOLUTION IN THE REST OF THE WORLD CANADA STARTED IN THE LATE 1970s CANADA STARTED IN THE LATE 1970s EUROPE AND AUSTRALIA BEGAN IN THE EARLY 1980s EUROPE AND AUSTRALIA BEGAN IN THE EARLY 1980s ASIA BEGAN IN THE 1990s ASIA BEGAN IN THE 1990s CANADA, FRANCE, GERMANY, ENGLAND, AND AUSTRALIA ALL STARTED LATER THAN THE U.S., INVESTED LESS, AND HAVE MADE MORE PROGRESS CANADA, FRANCE, GERMANY, ENGLAND, AND AUSTRALIA ALL STARTED LATER THAN THE U.S., INVESTED LESS, AND HAVE MADE MORE PROGRESS HONG KONG STARTED EVEN LATER, INVESTED EVEN LESS, AND IS NOW AT THE STATE OF THE ART IN H.I.T. HONG KONG STARTED EVEN LATER, INVESTED EVEN LESS, AND IS NOW AT THE STATE OF THE ART IN H.I.T. CHINA H.I.T. IS NOW AT AN EARLIER STAGE OF DEVELOPMENT. CHINA HAS THE GOALS AND DESIRE TO “LEAPFROG” THE REST OF THE WORLD IN H.I.T. USE IN THE NEXT FEW YEARS CHINA H.I.T. IS NOW AT AN EARLIER STAGE OF DEVELOPMENT. CHINA HAS THE GOALS AND DESIRE TO “LEAPFROG” THE REST OF THE WORLD IN H.I.T. USE IN THE NEXT FEW YEARS

16. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 16 SUMMARY U.S. SPENDS A MUCH LARGER SHARE OF GDP ON HEALTHCARE, BUT, THIS GREATER EXPENDITURE DOES NOT PRODUCE GREATER HEALTHCARE RESULTS U.S. SPENDS A MUCH LARGER SHARE OF GDP ON HEALTHCARE, BUT, THIS GREATER EXPENDITURE DOES NOT PRODUCE GREATER HEALTHCARE RESULTS U.S. SPENDS A LARGER SHARE OF ITS TOTAL HOSPITAL OPERATING COSTS ON I.T. EFFORTS U.S. SPENDS A LARGER SHARE OF ITS TOTAL HOSPITAL OPERATING COSTS ON I.T. EFFORTS U.S. HAS BEEN INVESTING HEAVILY IN H.I.T. FOR OVER 40 YEARS. WHILE THIS SUBSTANTIAL INVESTMENT HAS NOT PRODUCED ADEQUATE RETURN, THERE IS MUCH TO LEARN FROM WHAT WORKED AND DID NOT WORK IN U.S. H.I.T. STRATEGIES AND APPROACHES U.S. HAS BEEN INVESTING HEAVILY IN H.I.T. FOR OVER 40 YEARS. WHILE THIS SUBSTANTIAL INVESTMENT HAS NOT PRODUCED ADEQUATE RETURN, THERE IS MUCH TO LEARN FROM WHAT WORKED AND DID NOT WORK IN U.S. H.I.T. STRATEGIES AND APPROACHES U.S. HAS BEEN THROUGH AT LEAST FOUR GENERATIONS OF HOSPITAL SOFTWARE PRODUCTS IN THE PAST FORTY YEARS U.S. HAS BEEN THROUGH AT LEAST FOUR GENERATIONS OF HOSPITAL SOFTWARE PRODUCTS IN THE PAST FORTY YEARS THE REST OF THE WORLD STARTED AUTOMATION EFFORTS LATER, INVESTED LESS, AND HAVE RECEIVED A HIGHER RETURN ON H.I.T. INVESTMENT THAN THE U.S. THE REST OF THE WORLD STARTED AUTOMATION EFFORTS LATER, INVESTED LESS, AND HAVE RECEIVED A HIGHER RETURN ON H.I.T. INVESTMENT THAN THE U.S. THERE IS STILL MUCH TO DO TO IMPROVE H.I.T. ROI EVERYWHERE IN THE WORLD THERE IS STILL MUCH TO DO TO IMPROVE H.I.T. ROI EVERYWHERE IN THE WORLD

17. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 17 CHINA HEALTH INFORMATION MANAGEMENT DELEGATION EVOLUTION OF RHNs AROUND THE WORLD

18. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 18 RHNs WERE FIRST INTRODUCED AS CHINS IN THE U.S. IN THE EARLY 1990s Hospital A Doctor’s Office Government Reimbursement Blood Bank Home Health Agency Hospital B Patient Data Doctor’s Office Insurance Payor Nursing Home Outpatient Clinic

19. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 19 SUMMARY OF EVOLUTION OF RHNs IN THE U.S. COMMUNITY HEALTH INFORMATION NETWORKS (CHINs) BEGAN IN 1990 AS THE FIRST GENERATION OF RHNs IN THE UNITED STATES COMMUNITY HEALTH INFORMATION NETWORKS (CHINs) BEGAN IN 1990 AS THE FIRST GENERATION OF RHNs IN THE UNITED STATES –FORMED WITH A BROAD VISION OF SHARING INFORMATION AMONG HEALTH ORGANIZATIONS WITHIN A CITY OR STATE –UNCLEAR OBJECTIVES –LACK OF VALUE TO POTENTIAL PARTICIPANTS –MUCH MONEY INVESTED BY MANY CHIN PROJECTS INTEGRATED DELIVERY OWNERSHIP MODELS EMERGED IN 1993 AS THE HOSPITAL ANSWER TO THE CLINTON HEALTHCARE REFORM PROPOSAL INTEGRATED DELIVERY OWNERSHIP MODELS EMERGED IN 1993 AS THE HOSPITAL ANSWER TO THE CLINTON HEALTHCARE REFORM PROPOSAL BY THE MIDDLE 1990s, INTEGRATED DELIVERY SYSTEMS EMERGED IN EVERY CITY IN THE UNITED STATES, AND THE CHIN CONCEPT DISAPPEARED BY 1996 BY THE MIDDLE 1990s, INTEGRATED DELIVERY SYSTEMS EMERGED IN EVERY CITY IN THE UNITED STATES, AND THE CHIN CONCEPT DISAPPEARED BY 1996

20. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 20 THE VISION OF INTEGRATED DELIVERY SYSTEM OWNERSHIP MODELS Hospital A Doctor’s Office Government Reimbursement Blood Bank Home Health Agency Hospital B Patient Data Doctor’s Office Insurance Payor Nursing Home Outpatient Clinic

21. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 21 RHIOs EMERGE IN THE DECADE OF THE 2000s RHIOs WERE THE SECOND GENERATION OF RHNs IN THE U.S. RHIOs WERE THE SECOND GENERATION OF RHNs IN THE U.S. –MANY DIFFERENT ORGANIZATIONS PROMOTED THEM IN THE EARLY 2000s –BY 2004, NATIONAL POLICY EMERGED THROUGH THE OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY (ONCHIT) IN THE ENSUING SEVERAL YEARS BETWEEN 2004 AND NOW, ALMOST 100 OFFICIALLY DESIGNATED RHIOs EMERGED IN THE ENSUING SEVERAL YEARS BETWEEN 2004 AND NOW, ALMOST 100 OFFICIALLY DESIGNATED RHIOs EMERGED –HEAVY INVESTMENT IN THESE RHIOs WITH MOST FUNDS USED IN THEIR START-UP –MANY WERE UNABLE TO FIND A SUSTAINABLE OPERATING MODEL AND APPROACHED FINANCIAL COLLAPSE –SOME LONG TERM SUCCESSES EMERGED TO SHARE LIMITED DATA

22. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 22 WHAT ARE THE LESSONS TO BE LEARNED? BROAD VISIONS NEEDS DETAILED PLANS BROAD VISIONS NEEDS DETAILED PLANS OVERSIMPLIFIED IMPLEMENTATION APPROACHES CREATE FLAWED AND LIMITED SUCCESS OVERSIMPLIFIED IMPLEMENTATION APPROACHES CREATE FLAWED AND LIMITED SUCCESS LACK OF STAKEHOLDER COMMITMENT CREATED FAILED PROGRAMS LACK OF STAKEHOLDER COMMITMENT CREATED FAILED PROGRAMS HEAVY INVESTMENT IN POORLY CONCEIVED IDEAS WASTED MONEY HEAVY INVESTMENT IN POORLY CONCEIVED IDEAS WASTED MONEY SUCCESS ACCOMPLISHED THROUGH LIMITED, WELL THOUGHT THROUGH FIRST STEPS AND STRONG STAKEHOLDER PARTICIPATION AND SUPPORT SUCCESS ACCOMPLISHED THROUGH LIMITED, WELL THOUGHT THROUGH FIRST STEPS AND STRONG STAKEHOLDER PARTICIPATION AND SUPPORT

23. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 23 CHINA HEALTH INFORMATION MANAGEMENT DELEGATION THE CURRENT STATUS OF I.T. USE IN CHINESE HOSPITALS

24. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 24 EVOLUTION OF H.I.T. IN CHINA CHINA BEGAN TO COMPUTERIZE ITS HOSPITALS IN THE EARLY 90’S. CHINA BEGAN TO COMPUTERIZE ITS HOSPITALS IN THE EARLY 90’S. CHINA MADE SLOW PROGRESS WITH INITIAL FOCUS ON FINANCIAL SYSTEMS CHINA MADE SLOW PROGRESS WITH INITIAL FOCUS ON FINANCIAL SYSTEMS ABOUT 5 YEARS AGO CHINESE HOSPITALS BEGAN TO MOVE MORE AGGRESSIVELY TOWARD I.T. USE FOR CLINICAL SYSTEMS. ABOUT 5 YEARS AGO CHINESE HOSPITALS BEGAN TO MOVE MORE AGGRESSIVELY TOWARD I.T. USE FOR CLINICAL SYSTEMS. ALONG THE WAY, MANY SOFTWARE SOLUTIONS WERE DEVELOPED WITH SEVERAL HUNDRED SMALL SOFTWARE COMPANIES EMERGING IN CHINA. ALONG THE WAY, MANY SOFTWARE SOLUTIONS WERE DEVELOPED WITH SEVERAL HUNDRED SMALL SOFTWARE COMPANIES EMERGING IN CHINA. IN 2005, CHINA SPENT LESS THAN 1% OF TOTAL HEALTHCARE COSTS ON I.T. OR ABOUT $600 MILLION (USD) IN 2005, CHINA SPENT LESS THAN 1% OF TOTAL HEALTHCARE COSTS ON I.T. OR ABOUT $600 MILLION (USD) IN 2007, CHINA SPENT OVER $1 BILLION (USD) ON H.I.T. IN 2007, CHINA SPENT OVER $1 BILLION (USD) ON H.I.T. WE PREDICT RAPID GROWTH WILL ACCELERATE OVER THE NEXT THREE YEARS WITH H.I.T. INVESTMENT IN CHINA RISING TO BETWEEN $2 AND $3 BILLION (USD) BY 2010 WE PREDICT RAPID GROWTH WILL ACCELERATE OVER THE NEXT THREE YEARS WITH H.I.T. INVESTMENT IN CHINA RISING TO BETWEEN $2 AND $3 BILLION (USD) BY 2010

25. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 25 FACTORS CONTRIBUTING TO FUTURE SPENDING GROWTH IN CHINA H.I.T. 1.CHINA HOSPITAL WORK PROCESSES ARE REDUNDANT, EXPENSIVE AND ERROR PRONE WITH GREAT OPPORTUNITIES FOR IMPROVEMENT WITH APPROPRIATE USE OF I.T 2.CHINESE HOSPITAL LEADERS WOULD LIKE TO TAKE A BIG LEAP FORWARD IN IMPROVING WORK PROCESSES AND IN DIGITIZING CHINESE HOSPITALS 3.THE MINISTRY OF HEALTH (MOH) GUIDELINES FOR HEALTH I.T. DEVELOPMENT CALLS FOR ELECTRONIC MEDICAL RECORDS AND REGIONAL HEALTH NETWORKS TO BE IMPLEMENTED BETWEEN 2003 AND 2010 PROVIDING MUCH MOMENTUM FOR HOSPITALS AND HEALTH BUREAUS TO INVEST MORE IN I.T. NOW 4.THE HEALTHCARE REFORM PROGRAM IN CHINA WILL BE FACILITATED BY BETTER USE OF I.T. IN CHINESE HOSPITALS AND THAT IS ONE OF THE 8 PILLARS OF HEALTHCARE REFORM

26. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 26 GENERAL FACTORS IMPEDING SUCCESS IN CHINA H.I.T. 1.CHINESE HOSPITALS HAVE NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND INFRASTRUCTURE TO GET TO THE PRESENT LEVEL OF ACCOMPLISHMENT. WHILE CHINA WOULD LIKE TO CONTINUE THIS LOW INVESTMENT APPROACH, ITS NEXT STEPS FORWARD WILL REQUIRE GREATER INVESTMENT 2.THE POOR RESULTS ACCOMPLISHED FROM PAST INVESTMENTS IN I.T. ARE CAUSING HESITATION AMONG LEADERS OF CHINESE HOSPITALS TO MAKE FUTURE INVESTMENTS IN I.T. 3.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 4.INEXPERIENCE IN THE BUYING OF H.I.T. SOFTWARE PRODUCTS HAS FOLLOWED A SIMILAR PATH TO OTHER COUNTRIES AROUND THE WORLD IN THEIR EARLY STAGES OF EVOLUTION AND HAS RESULTED IN POOR BUYING DECISIONS

27. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 27 GENERAL FACTORS IMPEDING SUCCESS IN CHINA H.I.T. (CONTINUED) ) 5.LIKE OTHER COUNTRIES AROUND THE WORLD, IMPLEMENTATION OF NEW I.T. SYSTEMS IN CHINA HAS OFTEN ADDED WORK INSTEAD OF REDUCING WORK AND HAS CREATED UNNECESSARILY REDUNDANT WORK PROCESSES 6.THE IMPLEMENTATION SKILL AND CHANGE MANAGEMENT EXPERIENCE NEEDED FOR CHINA TO TAKE THE BIG LEAP FORWARD THAT IT WOULD LIKE TO TAKE IS NOT YET AVAILABLE AT THE LEVEL REQUIRED FOR CHINA TO ACCOMPLISH ITS GOALS 7.SOMETIMES, HOSPITAL LEADERSHIP NOT KNOWING WHAT IT DOES NOT KNOW, IS CONTINUING TO USE POOR BUYING AND IMPLEMENTATION APPROACHES BECAUSE THEY DO NOT KNOW BETTER WAYS ARE POSSIBLE AND THERE IS A STRONG MOMENTUM TO CONTINUE WITH THESE APPROACHES

28. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 28 ALLOCATION OF H.I.T. INVESTMENT AROUND THE WORLD SOURCE: CCW Research

29. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 29 CHINA HEALTHCARE LEADERS WANT TO “LEAPFROG” THE WORLD CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING HOW TO BE MORE SUCCESSFUL IN TAKING NEXT STEPS FORWARD IN I.T. USE CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING HOW TO BE MORE SUCCESSFUL IN TAKING NEXT STEPS FORWARD IN I.T. USE THERE IS A RECOGNITION THAT FOR CHINA TO ACCOMPLISH ITS OBJECTIVES IN H.I.T. REQUIRES THE FOLLOWING : THERE IS A RECOGNITION THAT FOR CHINA TO ACCOMPLISH ITS OBJECTIVES IN H.I.T. REQUIRES THE FOLLOWING : –LEARNING QUICKLY FROM THE GLOBAL EXPERIENCE –OVERCOMING RESISTANCE TO CHANGE –KNOWING HOW TO MANAGE CHANGE –DOING MORE OF WHAT THE REST OF THE WORLD DID RIGHT AND LESS OF WHAT THEY DID WRONG TO AVOID MISTAKES OTHER COUNTRIES HAVE MADE AND CHINA IS STILL MAKING –DEVELOPING MORE EXPERTISE IN THESE AREAS OF NEED

30. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 30 CHINA HEALTH INFORMATION MANAGEMENT DELEGATION EVOLUTION OF RHNs IN CHINA

31. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 31 EVOLUTION OF RHNs IN CHINA THE MINISTRY OF HEALTH (MOH) GUIDELINES FOR HEALTH I.T. DEVELOPMENT CALLED FOR REGIONAL HEALTH NETWORKS AND DIGITAL HOSPITALS TO BE IMPLEMENTED THROUGHOUT CHINA BETWEEN 2003 AND 2010 THE MINISTRY OF HEALTH (MOH) GUIDELINES FOR HEALTH I.T. DEVELOPMENT CALLED FOR REGIONAL HEALTH NETWORKS AND DIGITAL HOSPITALS TO BE IMPLEMENTED THROUGHOUT CHINA BETWEEN 2003 AND 2010 THIS PROVIDED MUCH MOMENTUM AS MANY HEALTH BUREAUS UNDERTOOK REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL INVESTMENT THIS PROVIDED MUCH MOMENTUM AS MANY HEALTH BUREAUS UNDERTOOK REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL INVESTMENT IN THE LAST FEW YEARS DATA SHARING HAS BEGUN TO EMERGE IN CHINA AS SOME RHNs SHARE LIMITED DATA SUCH AS TEST/DIAGNOSTIC RESULTS AND SOME PATIENT INFORMATION IN THE LAST FEW YEARS DATA SHARING HAS BEGUN TO EMERGE IN CHINA AS SOME RHNs SHARE LIMITED DATA SUCH AS TEST/DIAGNOSTIC RESULTS AND SOME PATIENT INFORMATION HEALTHCARE REFORM CALLS FOR E-HEALTH RECORDS AND HAS PROVIDED SUBSTANTIAL ADDITIONAL FUNDING IN A VARIETY OF WAYS, SO IT IS EXPECTED THAT SUBSTANTIAL ADDITIONAL PROGRESS WILL BE MADE IN THE NEXT FEW YEARS HEALTHCARE REFORM CALLS FOR E-HEALTH RECORDS AND HAS PROVIDED SUBSTANTIAL ADDITIONAL FUNDING IN A VARIETY OF WAYS, SO IT IS EXPECTED THAT SUBSTANTIAL ADDITIONAL PROGRESS WILL BE MADE IN THE NEXT FEW YEARS MUCH MORE ACTIVITY AND FUNDING IN MANY CITIES AND PROVINCES WITH EVEN U.S. FUNDING FOR ONE OR TWO MAJOR PLANNING PROJECTS MUCH MORE ACTIVITY AND FUNDING IN MANY CITIES AND PROVINCES WITH EVEN U.S. FUNDING FOR ONE OR TWO MAJOR PLANNING PROJECTS

32. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 32 THE CURRENT SITUATION WITH RHN DEVELOPMENT AND ELECTRONIC HEALTH RECORDS IN CHINA RESEMBLES THE U.S. SITUATION OF PAST BROAD VISION BROAD VISION MORE MONEY AVAILABLE MORE MONEY AVAILABLE POOR DEFINITION OF FIRST STEPS POOR DEFINITION OF FIRST STEPS LACK OF STAKEHOLDER COMMITMENT TO SPECIFIC DATA SHARING LACK OF STAKEHOLDER COMMITMENT TO SPECIFIC DATA SHARING

33. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 33 BUILDING SUCCESS THROUGH A STRONG FOUNDATION CAREFULLY DEFINE FIRST STEPS CAREFULLY DEFINE FIRST STEPS LIMITED DATA SETS WITH HIGH BENEFIT TO MANY STAKE HOLDERS WOULD BE ADVANTAGEOUS LIMITED DATA SETS WITH HIGH BENEFIT TO MANY STAKE HOLDERS WOULD BE ADVANTAGEOUS WHEN FIRST STEPS PROVE BENEFICIAL, MORE AGGRESSIVE SECOND STEPS CAN BE TAKEN WHEN FIRST STEPS PROVE BENEFICIAL, MORE AGGRESSIVE SECOND STEPS CAN BE TAKEN

34. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 34 CHINA HEALTH INFORMATION MANAGEMENT DELEGATION SUGGESTIONS TO HELP CHINESE HOSPITAL LEADERS MAKE MORE PROGRESS IN H.I.T. USE

35. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 35 COMMON THEMES EXPRESSED BY LEADERS IN CHINESE HOSPITALS “THE I.T. PROGRAM IS NOT WORKING AS WELL AS WE WOULD LIKE IT TO WORK” “THE I.T. PROGRAM IS NOT WORKING AS WELL AS WE WOULD LIKE IT TO WORK” “OUR SOFTWARE SYSTEMS DO NOT TALK TO EACH OTHER” “OUR SOFTWARE SYSTEMS DO NOT TALK TO EACH OTHER” “WE HAVE A DESIRE TO SOLVE PROBLEMS THROUGH BETTER INTEGRATED AND MORE EXTENSIVE I.T. USE THROUGHOUT OUR CLINICAL AREAS” “WE HAVE A DESIRE TO SOLVE PROBLEMS THROUGH BETTER INTEGRATED AND MORE EXTENSIVE I.T. USE THROUGHOUT OUR CLINICAL AREAS” “WE WANT TO FIX UP THE CURRENT I.T. PROGRAM AND IMPLEMENT AN EHR IN OUR HOSPITAL” “WE WANT TO FIX UP THE CURRENT I.T. PROGRAM AND IMPLEMENT AN EHR IN OUR HOSPITAL” “WE SEE MORE AND BETTER I.T. USE AS IMPORTANT TO OUR FUTURE” “WE SEE MORE AND BETTER I.T. USE AS IMPORTANT TO OUR FUTURE” “WE NEED A BETTER SOFTWARE VENDOR AND A BETTER SOFTWARE PRODUCT” “WE NEED A BETTER SOFTWARE VENDOR AND A BETTER SOFTWARE PRODUCT”

36. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 36 AREAS FOR HOSPITAL LEADERS TO FOCUS ON TO IMPROVE I.T. INVESTMENT RESULTS 1.CHANGING THE I.T. GOVERNANCE METHOD TO BE MORE EFFECTIVE 2.INCREASING THE INVOLVEMENT OF HOSPITAL CLINICIANS IN THE I.T. PROGRAM 3.REDUCING YOUR RELIANCE ON THE SOFTWARE VENDOR 4.CHANGING THE ROLE OF THE I.T. DEPARTMENT FROM DOING IT BY ITSELF TO INCLUDE FACILITATING, EDUCATING, AND TRAINING HOSPITAL MANAGEMENT AND USERS 5.TAKING ON MORE DIRECT RESPONSIBILITY FOR MANAGING THE CHANGE IN WORK PROCESSES AS NEW I.T. SYSTEMS ARE IMPLEMENTED

37. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 37 KEY STEPS TO IMPROVING LONG TERM I.T. INVESTMENT RESULTS IN CHINESE HOSPITALS 1.DEVELOP BETTER I.T. PLANNING AND PRIORITY SETTING METHODS 2.IMPROVE I.T. GOVERNANCE STRUCTURES 3.DEVELOP BETTER WAYS OF BUYING SOFTWARE TO INCREASE SUCCESS ACCURATELY AND THOROUGHLY DEFINE USER NEEDS PRIOR TO BUYING SOFTWARE ACCURATELY AND THOROUGHLY DEFINE USER NEEDS PRIOR TO BUYING SOFTWARE USE BETTER METHODS OF ASSESSING SOFTWARE PRODUCT CAPABILITIES PRIOR TO PURCHASE USE BETTER METHODS OF ASSESSING SOFTWARE PRODUCT CAPABILITIES PRIOR TO PURCHASE 4.DEVELOP BETTER APPROACHES TO SYSTEM IMPLEMENTATION SO THAT IMPLEMENTATION OF NEW I.T. SYSTEMS WILL NOT ADD WORK AND CREATE UNNECESSARILY REDUNDANT WORK PROCESSES 5.DEVELOP BETTER APPROACHES TO INVOLVING AND TRAINING USERS AS PART OF THE BUYING AND IMPLEMENTATION PROCESSES

38. CHINA HEALTH INFORMATION MANAGEMENT DELEGATION DORENFEST CHINA HEALTHCARE GROUP 38 THANK YOU. FOR MORE INFORMATION CONTACT: SHELDON I. DORENFEST OR YU ZHIYUAN (GRACE) SHELDON I. DORENFEST OR YU ZHIYUAN (GRACE) THE DORENFEST GROUPTHE DORENFEST CHINA NBC TOWER, SUITE 2725HEALTHCARE GROUP 455 N. CITYFRONT PLAZA DRIVERENMIN ROAD NO. 988 CHICAGO, IL 60611-5555JINGTIANDI INTERNATIONAL TOWER UNITED STATES OF AMERICASUITE 908 PHONE: 312-464-3000SHANGHAI, CHINA FAX: 312-467-0541PHONE: 021-63203522, 63269722 WEB SITE ADDRESS: www.dorenfest.com WEB SITE ADDRESS: www.dorenfest.comwww.dorenfest.com E-MAIL ADDRESS: info@dorenfest.com info@dorenfest.com SHELDON’S E-MAIL ADDRESS: sheldon@dorenfest.com sheldon@dorenfest.com YU ZHIYUAN’S (GRACE) E-MAIL ADDRESS : yuz@dorenfest.com yuz@dorenfest.com