Presented by: Mark J. Higley V-P, Regulatory Affairs VGM Group, Inc. Think Differently! Future Landscape in Healthcare and Benchmarking Updates Presented by: Mark J. Higley V-P, Regulatory Affairs VGM Group, Inc.

Today’s Objectives To understand the future of healthcare and how it may pertain to your business. To gauge where you stand amongst your peers in KPI’s. To have a better understanding of incremental growth. To discover new ideas for your business.

The Current/Future Landscape Affordable Care Act (ACA) Accountable Care Organizations (ACO’s) Primary Care Physician becomes center of Medical Homes Model Increased Audits Fee-For-Service migrating to Outcomes-based Medicine Value-Based Purchasing Bundled Payments Population Health Hospital Readmission Reduction Program Narrowing Networks Collaborative Efforts BY 2020- 50% of Hospital payments will not be fee- for-service

Facts About the Future of HealthCare Mobile Care Remote monitoring Data analytics Merger mania Integrated information systems Baby Boomers- disposable income45k/year

Baby Boomers 74.9M boomers 50% of population over 50 by the end of 2017 Targeted by marketing ONLY 5- 10% Spending to increase in 20 yrs. by $4.74T

More on Boomers 82% belong to a social networking site Spend more time online than millennials 70% of the disposable income controlled by boomers

How Does This Impact My Business? Mobile Care Remote monitoring Workforce Chronic care management (CCM) Data Analytics Value based models

Think Differently! Disease management Collaborations Partnerships Distribution Retail Other businesses

Learn How to Think Different Differently = innovators Connecting the unconnected Innovators spend 50% more time thinking different Why not spend more time? 80% of adults find it difficult or exhausting Grew up being punished not praised Be like a 4 year old

Learn How to Think Different Just do it Shake it up Repeat, repeat, repeat Ask… How often do I brainstorm? Hunt for new solutions? Will you?

How Entrepreneurs Think Differently Challenges are opportunities Competitors are research subjects Everything requires effort Perfection is the enemy There is magic It is a lifestyle

Benchmarking

Payer Mix as a % Gross Revenue

Revenue per FTE- VGM Members

Revenue Per FTE

Personnel Costs as a % of Gross Revenue

Size of Company by Gross Revenue

Net Income as a % of Gross Revenue This is pre-competitive bidding rural roll out!

Current Ratio

A/R Turnover Ratio

Days Sales in A/R

Inventory Turnover Ratio

Days COG in Inventory

Debt to Equity Ratio

Inventory Frequency

Cycle Count Frequency

Key Performance Indicators (KPIs) Personnel costs as a percentage of revenue Branch operations costs as a percentage of revenue Cost of goods/products as a percentage of revenue Days to: bill, collect, deliver Per unit cost on key activities: Intake, Billing a claim Key volume metrics, like masks per patient per year, percentage of orders filled, accessories as a percentage of base Revenue per patient Lifetime value of a patient equipment type Length of stay Lincare Oxygen LOS-26 months

Things to Consider Patient Pay- Collect Up Front! Distribution model Specialty capital items for hospitals & institutions Pain Relief Specialty athletics Home Modifications Specialty Vehicles Wallet growth Distribution model Dropship Challenge all staff- How can we do things differently? Look at other industries to compare your business It is ok to fail

Vice-President, Regulatory Affairs Questions? Mark J Higley Vice-President, Regulatory Affairs VGM Group, Inc. (c) 319.504.9515 mark.higley@vgm.com