ahmc presentation june 2014 for healthcare private investment conference

AHMC is a private US company headquartered in Washington D.C. recognized as the leading international hospital development and management company offering clients “individualized turn-key services and total hospital solutions.”

AHMC’s 16 year track record includes successful collaboration in more than 50 hospital projects, on 5 continents and 24 countries around the world.

AHMC’s management model is based upon the very best characteristics of American management practices and Joint Commission International (JCI) Standards.

AHMC’s successful model has been adapted to the needs of clients around the world in order to deliver enhanced operational capabilities, quality, and profitability.

AHMC’s business philosophy and experience enable it to deliver global resources locally in order to provide state-of-the-art quality medical services

AHMC’s affiliated healthcare facilities are Five Star, Class “A” academic medical centers that are committed to quality, service and long-term financial success.

Unique to AHMC is its experience in the management and development of world-class healthcare facilities that include private hospitals, Private-Public hospital Partnerships (PPP), and academic teaching hospitals.

AHMC OVERVIEW

GLOBAL NETWORK:

Hospitals and Projects: 33

Operational facilities: 15

Licensed Beds: 2,900

Physicians: 3,000

Staff/Employees: 4,500

Avg. Patient satisfaction: 97%

UNIQUE EXPERIENCE:

Private-Public Hospital Partnerships

New hospital commissioning

Academic and teaching hospital

AHMC OPERATIONS OVERVIEW

AHMC HOSPITAL FEATURES

Operated at Joint Commission International standards

Adoption of world class clinical guidelines

Commitment to continuous quality improvement and enhanced care

State-of-the-art medical technology and healthcare services

Commitment to continuing medical education and employee development through constant education and technology transfer

Transparent administration and business practices for to earn investors’ trust and in order to enhance ROI

Access to AHMC’s prestigious Strategic Alliances and related resources

AHMC HOSPITAL CHARACTERISTICS Award winning design and according to JCI Standards

AHMC HOSPITAL CHARACTERISTICS Modern and focused on patient safety/quality and efficiency

AHMC HOSPITAL CHARACTERISTICS Patient and family centered environments

AHMC SCOPE OF SERVICES

PHASE 1-FS/BP Development TIMEFRAME: 2 – 3 MONTHS

Conduct Feasibility Study

Develop Business Plan

Develop the Financial Projections

Analysis of the site and architectural design

Preliminary staffing plan

Market analysis

PHASE 2- PROJECT MANAGEMENT CONSULTING TIMEFRAME: 18-24 MONTHS Work with architect and

construction manager Operating procedures

development Equipment planning HIT Selection and

implementation Development of bylaws for

the board and medical staff Establish governance

structure

PHASE 3- PRE-OPERATIONS & COMMISSIONING TIMEFRAME: 6 - 9 MONTHS Staffing core operating team General staffing and

recruitment Physician recruitment Implement operating

policies and procedures Implement process design

and protocol Equipment procurement

and installation Establish financial controls

and measures Hospital commissioning

PHASE 4- OPERATIONS TIMEFRAME: 10-15 YEARS Turnkey executive

management and control of daily business operations

Implement international mode of clinical procedures and medical care

Implement quality improvement and patient safety framework

Implement AHMC best practice financial and operations management

Recruitment, training and retention of physicians, nurses and hospital staff

Selection/implementation of HIT System

AHMC Onsite Full-Time AHMC Consulting and Support

PHASE I: FEASIBILITY STUDY AND BUSINESS PLAN TIMEFRAME: 2 MONTHS

SCOPE OF WORK

Conduct a Feasibility Study to validate hospital project

Develop the associated Business Plan and related Financial Projections

Conduct site and review architectural design

Conduct market analysis

DELIVERABLES

Feasibility Study serves to validate the proposed hospital project's operational and financial

feasibility from a strategic perspective.

Business Plan gleams information from the feasibility study to develop the proposed hospital’s

framework and a preliminary operational plan. Also serves as a prospectus grade document.

Hospital size, scope/breadth of hospital services

Address needed investments related to building, equipment, HIT and working capital needs

Outline space allocations

Preliminary employee and medical staffing plan

Assess and project operational costs and external service suppliers

Develop future strategic objectives and marketing strategies

5 year financial projections including opening financial statements of operation, balance sheet, and

cash flow statement.

PHASE II: PROJECT MANAGEMENT CONSULTING TIMEFRAME: 18-24 MONTHS

SCOPE OF WORK Work in collaboration with architect and construction manager Develop hospital operating procedures Equipment planning HIT Selection and implementation Develop bylaws for the board and medical staff Establish governance structure

DELIVERABLES Detail Room Program: AHMC works with architects to assure each room is appropriately equipped

with medical gases, electrical needs and other necessities for both clinical and diagnostic areas. Equipment Plan: AHMC will develop the list of clinical equipment, supplies and furniture necessary to

open the hospital to be approved by the Board of Directors. HIT Plan: AHMC will develop the implementation plan for selected HIT system, as well as, evaluate

the leasing and/or purchase of hardware and software relevant to the project. Bylaws for the Hospital Board and Medical Staff: Hospital Governance will conform to Accreditation

standards as well as develop a system that can be audited to ensure transparency in all transactions. General Hospital Organization (“Hierarchy of Control): To be approved by the Board of Directors.

ARCHITECTURAL DESIGN AND RELATED EXPENSES AHMC is not an architectural firm, however we work with renowned architects experienced in the design of world-class international standards hospitals worldwide. At the discretion of the owners, architects can be integrated as part of our team. Related fees and costs are billed separately from AHMC.

PHASE III: PREOPERATIONS AND COMMISSIONING TIMEFRAME: 6-9 MONTHS

SCOPE OF WORK Placement of CEO and staffing of the core operating team Recruitment of physicians and general staff Implement operating policies and procedures Equipment planning, procurement, installation and training Implementation the Health Information Technology (HIT) Develop and implement methods of procurement Establish financial controls and measures Hospital commissioning

DELIVERABLES Operating Plan and Procedures Employee Policies and Procedures Job Descriptions, Employee handbooks, and Salary/Benefit Structures Medical Equipment Planning, Procurement, Installation and Training Plan

HOSPITAL COMMISSIONING- (LAST 2 MONTHS OF PHASE III) AHMC team will conduct “practice runs” in order to insure all equipment is functioning appropriately and that all staff understand how to move patients through the system efficiently and effectively prior to hospital opening.

PHASE IV: ADMINISTRATION AND OPERATIONS TIMEFRAME: 7-15 YEARS

SCOPE OF WORK

Turnkey executive management

Management and control of daily business operations

Recruitment, training and retention of physicians, nurses and hospital staff

Implement international mode of clinical procedures and medical care

Implement quality improvement and patient safety framework

Implement AHMC’s best practice financial and operations management service

DELIVERABLES

Clinical Practice and Medical Care Model

Framework for Quality and Patient Safety Programs

Financial and Operation Management Services Plan

Hospital performance benchmark data and KPI’s

Marketing and Branding Implementation Plan

Monthly Reports: formal monthly reports prepared for Hospital Board and investors.

Reports include comparison against budget, variance analysis and benchmarks.

AHMC HOSPITAL NETWORK

Country Client /Project BedsContracted

Services

Contract

Start Date

Contract

End DateCurrent Status

Honduras La Lima 180 Phase 4 2003 2008 Completed and Current investor

Ecuador Hospital Del Rio 90 Phase 2-4 2003 2010 Completed and Current Investor

Honduras Honduras Medical Center 49 Phase 3 -4 2002 2007 Completed and Current investor

Saudi Arabia Mohammed Khan Hospital 70 Phase 4 2014 Present Management/Operations

Saudi Arabia Bakhsh Hospital 120 Phase 4 2014 Present Management/Operations

India Sama Healthcare 31 Phase 4 2012 Present Management/Operations

Antigua & Barbuda Mount Saint John's Medical Center 185 Phase 3-4 2007 Present Management/Operations

Colombia Pastuer Labs NA (Lab/DX) Allaince 2004 Present Management/Operations

Panama Hospital Nacional 120 Phase 4 2000 Present Management/Operations

India Re- Hospital 120 Phase 3 - 4 2014 Present Pre-Operations

Saudi Arabia Al-Jazeera Medical Hospital 120 Phase 3 & 4 2014 Present Pre-Operations

Saudi Arabia AlQadi Specialty Hospital 140 Phase 1-4 2012 Present Pre-operations

Libya VIP Hospital 60 Phase 1, 3-4 2010 Present Pre-Operations



Country Client /Project BedsContracted

Services

Contract

Start Date

Contract

End DateCurrent Status

Libya Swani Road 200 Phase 1-4 2010 Present Construction

Russia Russian American Hospital 100 Phase 1-4 2010 Present Construction

Peru Clinica Delgado 120 Phase 2-4 2009 Present Construction

Peru Torre Trecca NA (OP) Phase 2-4 2009 Present Construction

Libya Swani Road 200 Phase 1-4 2010 Present Construction

Russia Russian American Hospital 100 Phase 1-4 2010 Present Construction

Peru Clinica Delgado 120 Phase 2-4 2009 Present Construction

Peru Torre Trecca NA (OP) Phase 2-4 2009 Present Construction

Georgia American Hospital Tiblisi 120 Phase 1-5 2013 Present Financing

Libya Libyan American Hospital 120 Phase 1-4 2013 Present Financing

Nigeria Lagos American Specialty Hospital 50 Phase 1 2013 Present Financing

Nigeria Crystal Thorpe Lagos 150 Phase 1 2012 Present Financing

Nigeria Chystal Thorpe Abuja 120 Phase 2 2012 Present Financing

Nigeria Chystal Thorpe Yola 100 Phase 3 2012 Present Financing

Egypt Egyptian American Medical Center 182 Phase 1-4 2011 Present Financing

Jordan MIS Surgical Centre NA (OP) Phase 1-4 2011 Present Financing

Mexico Cancun Medical Center 100 Phase 1 2011 Present Financing

Morocco Moroccan American Hospital 182 Phase 1 2011 Present Financing

Al-Jazeera Medical Hospital Riyadh, Kingdom of Saudi Arabia

Recruiting Physicians and Staff

Cath lab projected online by mid-2014

Implementation of P&Ps and quality program

Develop marketing strategy

Beds: 120 Type: General Hospital Status: Operations

Bakhsh Hospital Jeddah, Kingdom of Saudi Arabia

Recruiting Physicians, staff, and executive team

Strategic and Operational Development

Implementation of P&Ps and quality framework


Dr. Mohammed Khan Hospital Hafr-al-Batin, Kingdom of Saudi Arabia

Recruiting of physicians and staff

Strategic and operational planning

Implementation of P&Ps and quality framework


AlQadi Specialty Hospital Najran, Kingdom of Saudi Arabia

Construction in final stages

Staffing imminent

Equipment procurement underway

Financing

Beds: 140 Type: Specialty Hospital

Status: Pre-Operations

Memorial Souad Kafafi Medical Center 6th of October, Egypt

Moved into Extension with new ED, OR & Cath Lab

CCU, NICU, ICU, OB

Remodeling of Old Building

Transition to Fee for Service Model

Beds: 140

Type: General Hospital

Status: Operations (Completed April 2014)

Hospital Nacional Panama City, Panama

Kidney Transplant Program

Da Vinci Robotic Surgery

Radiation Oncology Center

Expansion ICU, Surgery and ED


Mount Saint John’s Medical Center St. John’s, Antigua & Barbuda

New Executive Team & Board

Updating Strategic Plan

GPO Pilot Program

Teaching Accreditation

Cancer Centre of Eastern Caribbean


AHMC HOSPITAL NETWORK Hospitals Under Development (continued)

VIP Hospital Tripoli, Libya 60 Beds Status: Construction (Pending)

Swani Road Tripoli, Libya 200 Beds Status: Pre-Operations (Pending)

Tripoli American Hospital Tripoli, Libya 120 Beds Status: Design and Capitalization


Moroccan American Medical Center Casablanca, Morocco 110 beds Status: Design and Capitalization

Egyptian American Medical Center Cairo, Egypt 180 beds Status: Design and Capitalization

Minimally Invasive Surgery Center Amman, Jordan Status: Design and Capitalization


Lagos American Medical Center Lagos, Nigeria 50 Beds Status: Design and Capitalization

Crystal Thorpe (3 hospitals) Yola, Abuja and Lagos, Nigeria 100, 120 and 150 Beds Status: Design and Capitalization

R&H Specialty Hospital Accra, Ghana 100 Beds Status: Design and Capitalization


Russian American Medical Center Tver, Russia 120 beds Status: Design and Capitalization

American Hospital Tbilisi Tbilisi, Republic of Georgia 120 beds Status: Design and Capitalization


Clínica Delgado Lima, Peru 120 Beds Status: Phase 2 Construction

Torre Trecca Lima, Peru Ambulatory and Urgent Care Center Status: Phase 2 Construction

Hospital Solaris Guayaquil, Ecuador 100 Beds Status: Phase 2 Construction

AHMC HOSPITAL NETWORK Completed and Current Investor

Honduras Medical Center Tegucigalpa, Honduras Status: Commissioned, Operated and own equity in Hospital

La Lima Medical Center Tegucigalpa, Honduras Status: Renovated, Operated, and own equity in Hospital

Hospital Del Rio Cuenca, Ecuador Status: Business Plan, Commissioned, Operated and own equity in Hospital

6/6/2014 FAMILY HOSPITAL GROUP 29

INVESTING IN HEALTHCARE

Hospitals are complex businesses

Business of “people”

High technical skills required

Long-term perspective and dedication required

Significant ROI is possible


HEALTH MARKET TRENDS

Scarcity of Capital Human

Financial

Increased Complexity

Capital Markets and Investor Expectations

Quality & the Patient Experience

Cost Pressures


HEALTH MARKET TRENDS

Transitions:

Financial Markets

Reimbursement

Aging Hospitals

Younger Populations

New Technology

Increased Complexity

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BUSINESS MODELS

Classic:

Public

Public Private Partnerships

Private: Foundation

Family Owned

Doctor Owned

Investor Owned

Alternative:

Hospital within a Hospital

Doctor – Investor Hybrid

Joint Ventures

Collaboration with Insurance Companies

Tenant Hospitals

Concession of Services


CHARACTERISTICS OF SUCCESS Focused Business Plan – Clear investment objectives

Clearly identified and sustainable local market

Socio-economic levels of patients are top “informed” 40%

Class “A” tertiary care with quality and economic volumes

Class “B” volume and service focused 1 and 2 level care

Aligned, well-trained and multi-specialty medical staffs

Operated to International Standards (ISO9000/HQS/JCAHO)

Emphasis on “value” technology as a clinical and business tool

Clinical benchmarking and measuring of outcomes

Ability to understand the relationship and implications between clinical care and financial performance


CHARACTERISTICS OF FAILURE Over reliance on the government for patients & revenue

Alienating the physicians or insurance companies

Poor quality and patient experience

Lack of clear strategic plan and/or poor implementation

Ineffective leadership and lack of accountability

Wrong or incompatible investor expectations

Focusing on the socio-economic levels of patients in the top 5% to 10% or the bottom 50%

Too many hospitals/beds in market, lack of differentiation

Too much technology or too little technology

Lack of resources: financial and human capital

If you build it, they will come


CRITICAL INVESTMENT QUESTIONS

Why are you investing?

What is the expected ROI?

What are the incentives?

Understand how all investors will make money

Who is in charge and who is accountable?


KEYS TO SUCCESS

Demand in market – priced for the market

Diversified referral base of patients

Clear focus of the business and strategic plan and objectives of the hospital

Service selection – Cannot be all things to all people: Ok to be a Wal-Mart and ok to be a Saks 5th Avenue, you just cannot be both

Realize the uniqueness of the hospital business and the uniqueness of the customers


THE PHYSICIAN KEY

Working in partnership with the medical staff:

Doctors are unique customers

Doctors bring patients

Doctors spend the money

The Doctor Workshop

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THE PATIENT EXPERIENCE

Differentiating and understanding quality care and quality service:

The patients and families’ expectations

The patient experience

The “little things” of service

Voting with their feet

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ALIGNMENT OF INCENTIVES

Owners / Investors

Doctors that Bring Patients

Insurance Companies

Other Hospitals

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MAXIMIZING PROFITS

Programs – not “Bricks and Sticks”

Day to Day control of money and information

Understanding the true and the incremental costs of care

Productivity and flexibility

Appropriate and sufficient capitalization – with reality based financing

Accountability, transparency and long-term relationships


MAXIMIZING PROFITS

Best practices and standardization

Clear strategic plan for insurance and third party contracting of local domestic patient referrals: Healthcare is local

Share the risk – share the rewards

Doctors

Insurance companies

Competing hospitals

Clinical partners


REDUCING THE RISK

Not Re-Inventing the Wheel: Learn from Others

Clinical Partners

Best Practices

Invest in Human Capital: Professional

Management

Technical Training

CASE STUDY

Mount St. John’s Medical Centre is a state-of-the-art hospital facility centrally-located

on the island of Antigua and has been prepared to be the premier hospital of the

Eastern Caribbean region.

OVERVIEW

185 bed hospital structured as a Public Private Partnership ownership model.

The Hospital is professionally managed and operated as a modern, private enterprise by American Hospital Management Company that ensures the effective management of all business operations

The hospital provides comprehensive medical services to the public and private patients

Regional demand for quality healthcare services is growing with lack of adequate private facilities in the region

Private, insurance and for tertiary level government patients, reimbursement is under fee for service

Primary and secondary services for government sponsored patients are reimbursed under a capitation agreement with he Government of Antigua and Barbuda on a monthly basis

Antigua and Barbuda is centrally located within the Eastern Caribbean Economic Market and a major transportation hub

SERVICES

Medical / Surgical Suites

Private Rooms

Semi-Private Rooms

Intensive Care

Maternity

Nursery

Neonatal Intensive Care

Operating Theaters

Radiology MRI

CT-Scan

Fluoroscopy

Ultrasound

Full Clinical Laboratory

Rehabilitation

Emergency Room

20 Medical Offices

Helicopter Landing Pad


SUMMARY Significant new opportunities exist

Know who you are and know your market

Everyone must understand why they are going into business and the expectations

Align your incentives with the doctors

Focus on quality and the patient experience

Human capital and resources

Maintain the optimal mix of technology and financial resources

CONTACT INFORMATION