1. Physician Options in the ASC Marketplace October,15 2015

2. 2 ASC Trends in the National Market Place

3. U.S. ASC Development Growth 3 Source: Stephens Inc. research, April 2015 2000 – 2007 YOY national growth rate of ~10% 2008 – 2012 YOY national growth rate of ~2% Total ASCs % Growth Rate

4. Top ten management companies own less than 20% of ASC market 65% of National ASCs are independently physician owned ~3,500 ASC acquisition targets available in the Marketplace U.S. ASC Market Ownership 4 Market Ownership Breakdown Source: Jefferies Initiating Coverage Report February, 2015 - AMSG

5. Steady Acquisition Activity 5 Source: Company Filings – SCAI, AMSURG, USPI Top three management firms owning ~600 ASCs – Acquisitions averaging ~32 ASCs per year, approximately 6% of total ASCs owned – Virtually zero presence in NY marketplace Total ASCs % ASCs Acquired of Total ASCs

6. ASC Market Overview 6 Number of ASCs per State Source: Becker's Hospital Review NY State and NYC are both under-penetrated  NY State 2 nd least developed ASC market per capita  NYC 20% less ASCs per capita vs. the rest of the state Total ASCs per Capita

7. 7 NY ASC Barriers to Entry

8. NY Certificate of Need Complexities Extended development timeline and approval delays o Drain on resources Potential for hospital opposition o Alignment strategy: equity and / or care Need for team well-versed in NYS Article-28 nuances o Multiple codes to comply with (NFPA, ADA, CMS, local building code, FGI guidelines, etc.) o Limited real estate inventory in metropolitan area

9. Limited Secondary Market Relative lack of market aggregator presence hampers push for de-novos o Corporate practice of medicine ownership restrictions

10. OBS Legacy Market Position Site-of-service differential creates higher project hurdle rate Market dynamics continued erosion of OBS financial and operational viability o CMS OBS professional fee reimbursement declines o Challenge / cost of maintaining quality of care o Accreditation cost / hassle

11. Recent Activity in the NY Market

12. NY ASC Development Growth 12 Source: http://www.healthindicators.gov/ NY De-novo growth increasing: – In 2008: 2% of national de-novo ASC activity occurred in NY – In 2012: 64% of national de-novo ASC activity occurred in NY Total New ASCs NY Developed ASCs as % of Total

13. Recent NY Market Activity 13

14. Transaction Options

15. Why Sell? 15 1.Liquidity event “Taking Money Off the Table” 2.Under Performing ASC Clinical and Financial Concerns 3.Fear of the future Increased Sense of Security 4.Secured Referral base 5.Increased volume 6.Reimbursements Uplift

16. ASC Sale Options 16 1.Minority Equity Sale – Hospital System, Physician or Management Co. 2.Majority Equity Sale - Hospital System, Physician or Management Co. 3.Associate model / Vesting Equity – Succession Planning

17. 17 4.Physician Buy-up 5.Member Redemption 6.Debt Recapitalization 7.Merger ASC Sale Options

18. Valuation Considerations 18 Variations in purchase multiple are based on several factors: Majority vs Minority Ownership Single vs Multi Specialty ASC

19. Single Specialty ASC - Purchase Multiples 19 Minority InterestMajority Interest Source: Healthcare Appraisers Inc. - 2014 ASC Valuation Survey Minority Interest - 47% of transactions between 3.0x – 3.9x Majority Interest - 70% of transactions between 6.0x and higher

20. Multi-Specialty ASC - Purchase Multiples 20 Minority InterestMajority Interest Source: Healthcare Appraisers Inc. - 2014 ASC Valuation Survey Minority Interest - 57% of transactions between 4.0x – 5.9x Majority Interest - 56% of transactions between 7.0x and higher

21. Valuation Considerations 21 Additional Variations in purchase multiples include: Location within a certificate of need state Low reliance on out-of-network payments Reasonable, but not overly high, reimbursement rates per procedure Not overly dependent upon a few doctors Low levels of physician non-competition risk.

22. 420 Lexington Avenue Suite 2001 New York, NY 10170 (p) (212) 874-0107 (f) (646) 304-6474 www.frontierhh.com