AdvantEdge Healthcare Solutions October 2010

Transcription

1 AdvantEdge Healthcare Solutions October 2010

2 Overview AHS provides Billing and Practice Management services and solutions to large Physician Groups, Ambulatory Surgery Centers, and Hospitals Value proposition centers around proprietary software, workflow management and Client First service delivery Clients and prospects have high propensity to outsource due to practice characteristics National footprint / Local presence Outstanding organic and acquisition growth prospects

3 Business Characteristics Highly predictable recurring revenues and strong cash flow Client retention exceeds 97% Significant operating leverage: Scalable platform built on proprietary technology Effective buy-and-build strategy Targeted sales & marketing approach Management team has extensive industry, acquisition, and integration experience

4 Key Events Timeline 3/2006 Platform purchased by Founders Equity 11/2006 Safeguard Scientifics co-investment 3/2007 First acquisition: Anesthesiology billing company ($3.5M) 8/2007 Redesigned system to handle multiple specialties 9/2007 Completed integration of 1 st acquisition 6/2009 Completed 2 nd acquisition: Lombard, IL 12/2009 Completed 3 rd acquisition: Dayton, OH 3/2010 Completed 4 th acquisition: Portland, ME (2007) Exit run-rate revenue: $7.5M Burn rate $250 + /month Multiple processing systems Billing services only (2010) $32.5M projected exit run-rate revenue Positive EBITDA Single processing platform Services include practice management, consulting, & new compliance product

5 Value Proposition The Problem Constant threat of reduced reimbursement rates Attract & retain high-quality staff Increasing complexity & regulatory requirements More Money, Faster The AHS Solution AHS staff are experts in billing and reimbursement management Compliance, Built-in AHS responsible for all billing and related compliance Business Intelligence and Reporting Anytime/Anywhere Technology and staff investments are expensive AHS responsible for technology development and implementation Reduced capital investments Client First Service AHS Simplifies the business side of medicine Enable clients to focus on clinical care!

6 Diverse Client Base Geographic Footprint Clients by State Other IL NJ PA OH NY Clients by Specialty AHS Office AHS Remote Client AHS Client Concentration Other Multi- Specialty Anesthesia Pathology Radiology

7 Specialty Focus & Market DNA Complex and sophisticated practices are most likely to outsource administrative functions of the business. High High Radiology (no OSIC) Surgical Group Internal Medicine OB/GYN Cardiology Administrative Costs Pathology Emergency MD Anesthesiology Patient Interaction Emergency MD Internal Medicine OB/GYN Cardiology Anesthesiology Radiology (w/ OSIC) Surgical Group Radiology Pathology Low Practice Revenue High Low Need for non-physician Clinical Employees High Outsource (RCM) Rich Environment In-source (ASP) Rich Environment

8 Market Potential The market for the company s services is estimated at $4B - $8B Office-based RCM $0.70 Large and growing market: Physician expenditures increasing by more than 8% per year Increasing shift to outsourcing (RCM); currently less than 20% of total Largest competitor has under 5% of total market $3.30 In-House: Practice Management $4.00 Hospital Based MD RCM $4.00 AHS Target Market Target markets Billing and Practice Management Service Market (Falcon Capital): $8.0B Total RCM Market (Wallingford Capital/HBMA, 2007): $4.75 B; top 10 billing cos.: $1.0B

9 Buy-and-Build Strategy Extremely disciplined in target screening and identifying synergies Acquire established, profitable billing companies with favorable geographic and specialty market penetration Rapidly migrate acquisitions onto Virtual Manager platform Model

10 Financial Performance & Trends Quarterly Revenue: Actual Quarterly EBITDA: Actual $10,000,000 $1,500,000 $9,000,000 $8,000,000 $1,000,000 $7,000,000 $500,000 Revenue $6,000,000 $5,000,000 EBITDA $0 $4,000,000 $3,000,000 $500,000 $2,000,000 $1,000,000 $1,000,000 $ Q1 Q2 Q3 Q4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 $1,500, Q1 Q2 Q3 Q4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Average/Quarter 2009 Actuals 2010 Actuals 2010 Projected Average/Quarter 2009 Actuals 2010 Actuals 2010 Projected 2009 Revenue and EBITDA growth of 225% and 174% respectively 2010 Revenue and EBITDA growth of 28% and 51% respectively (exclusive of additional acquisitions)

11 Strategic Pathway Creating Value for Clients, Employees, and Stakeholders through: Creating Value for Clients, Employees, and Stakeholders through: GROWTH EFFICIENCY ZERO CLIENT ATTRITION TECHNOLOGY INTEGRATION One Company One Brand One Vision Performance Enhancement Market Differentiation Client 1 st Philosophy Organic & Acquisition Margin & Profit Expansion Measured as Revenue per FTE & Processing Cost per Procedure