Transcript Apollo Medical Holdings, Inc.

Apollo Medical Holdings, Inc.
LD Micro Invitational
June 4, 2014
OTC-QB: AMEH
www.apollomed.net
Integrated Healthcare for Better Patient Outcomes
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.
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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
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Operational Overview
ApolloMed Medical and Business Management
Physicians Providing Direct Patient Care
Hospitalists
Clinics
# of physicians
~50
~4
# of
admissions/visits/
patients treated
~25,000
~14,000
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Physician IPAs
ACO
# of physicians
300+
700+
# of patients
5,000+
~30,000
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
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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
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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
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Inpatient Solution: Significant Value Proposition
New Admission Rate/
1,000 patients*
450
 Reducing the average inpatient hospital
admissions by 1 saves the U.S.
healthcare system $1-2 billion annually
385
400
350
300
250
220
 Apollo also closely monitors bed days/
1000, a measure of efficiency within
inpatient settings, and “best in class”
results are similar to admits
243
200
150
 Superior inpatient services with focused
on patient satisfaction, quality care and
cost efficiency
100
50
0
ApolloMed
HCP Seniors
Medicare FFS
Focus on optimal length of stay
* Medicare National Reference Publication as reported in
Pioneer ACO Dashboard , April 2013
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Inpatient Solution Advantages
Advantage for Health Plans
Advantage for Hospitals
 Increases patient throughput

Reduces length of stay
 Improves facility utilization

Reduces bed days

Reduces re-admissions

Efficient use of specialists

 Reduces hospital emergency room
admissions
Rapid transfer of out-of-network patients to
contracted facilities

Cost-effective use of drugs
 Reduces hospital re-admissions

Improved documentation
 Optimizes hospital length of stay
 Obtains higher reimbursements
 Increases efficient use of
specialists/subspecialists
Advantage for Patients
 Optimize use of hospice care
 Improves cost-effective use of
pharmaceuticals
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
Streamlines the healthcare continuum

Facilitates access to quality access

Increases time with physicians

Generates better outcomes

Creates greater satisfaction
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
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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 polychronic 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
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Integrated Care Solutions - IPA: Maverick Medical Group
 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
 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)
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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 posthospital 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
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Recent Accomplishments
Launches Maverick
Medical Group
July
2013
Join ACO: Integrated Healthcare Holdings,
Physician Partners IPA, Bolsa Medical Group,
AMVI Medical Group, and Pacifica Hospital
September
2013
Partners with
Mission Hospice
October
2013
December
2013
Collaborates
with Boehringer
for COPD
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$3.1 million in
preliminary12-month
savings from benchmark
by ApolloMed ACO
March 2014
Partners with Rite Aid
for community-based
health treatment
Receives
$12 million
Investment from
Fresenius
April
2014
Launches
ApolloMed
Care Clinics
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
 Co-founder
 Graduated Georgetown Medical School and completed Residency in
Internal Medicine from USC
 Board of Directors at El Monte Community Hospital
 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
 More than 30 years of healthcare experience
 SVP of Operations for Dignity Health’s Los Angeles Service Area
 CEO of several Tenet Healthcare Hospitals
 Co-founder
 Medical degree from the University of California, Irvine
 Diplomate of the American Board of Internal Medicine
 4 decades experience with risk-bearing IPAs and MSOs
 Former President of Medical Pathways and Gateway Medical Group
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Our Board
Relevant healthcare experience including corporate governance, executive, finance,
operations, strategy, M&A and technology
Gary Augusta
Executive Chairman
Mitchell R. Cream
Director
Warren Hosseinion, M.D.
CEO & Director
Suresh Nihalani
Director
David Schmidt
Director
Ted Schreck
Director
 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
 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,
 Co-founder
 Graduated Georgetown Medical School and completed Residency in
Internal Medicine from USC
 Board of Directors at El Monte Community Hospital
 CEO of Appzure, Inc.
 Founder and CEO of Accelerated Networks
 CEO of SCAN, 10th largest MA plan in the U.S.
 Expertise in Government relations, Knox Kneene and Healthcare IT
 37 years in private and public healthcare sectors
 CEO of USC University Hospital and USC/Norris Cancer Hospital
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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
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Improving Top Line and Bottom Line
Revenues
Net Income
$12.0
$8.0
>100%
increase in
2 years
$ in millions
$ in millions
$10.0
$6.0
$4.0
$2.0
$0.0
2012
2013
$0.0
-$1.0
-$2.0
-$3.0
-$4.0
-$5.0
-$6.0
-$7.0
-$8.0
-$9.0
-$10.0
2014
2012
2013
2014

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
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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
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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
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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
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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
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