1. Approach To-Date: Siloed Practice vs. Site-of-Service
ASC
Practice
Patient

2. Patient Emerging Approach: Structurally Aligned Under Single MSO MSO
ASC
Practice
Patient

3. Why? Driven by Shared Strategic Interests
MSO
ASC
Practice
Shared
Patient experience, quality of care & data
Administrative service needs
Growth & development - physician recruitment, succession planning, practice development

4. Complementary Value Propositions, Though Structural Challenges Remain
ASC
Practice
Strategic Value
High quality, low cost site-of-service
Procedure quality and cost data
Limited ancillary opportunity
Demonstrable equity value via
cash flow
Management Companies
Often managed
Clean non-physician ownership / governance alignment
Quality & Operations
Highly regulated
ASC-specific EMR
Growth & Development
Net recipient of volume growth
Rigid restrictions limit practical growth investment
Strategic Value
Drive patient flow & relationship
Data across holistic patient interaction
Positioned for high quality, low cost ancillaries with scale + management
Equity value achieved only at scale
Management Companies
Generally unmanaged
Complex non-physician economic interest / governance alignment
Quality & Operations
Less regulated
Practice-specific EHR
Growth & Development
Net driver of volume growth
Flexible growth investment vehicle

5. Divisional Limited Liability Company ASC JV Models
ASC Management Company
MSO
Private Equity Company
Physician Holdco
Drs.
Health System
49%
67%
33%
51%
JV LLC
Health System establishes an LLC with contractual divisions or “cells.”
Health System establishes de novo ASCs and/or acquires and adds on existing ASCs, and each ASC is operated through its own separate ASC division of Master ASC LLC.
This model allows for different investors and ownership of each division, and an investor’s interests in a division track the profits and losses of that specific division/ASC.
Drs.
20%
51%
51%
51%
49%
Drs.
Drs.
80%
51%
49%
49%
49%
ASC 1
Division
ASC 2
Division
ASC 3
Division
ASC 4
Division
MASTER ASC LLC WITH SINGLE FEIN

6. ASC Management Company Private Equity Company
“Value Add”
Physician Group
Patients
Cases
Health System
Lift
Loft
ASC LLC
ASC Management Company
Capital
Expertise in Operating Center
Private Equity Company
Multiple Monetization Opportunities
Scaling Expertise
MSO
Consolidation Vehicle
All non-medical Operations