1. CONFIDENTIAL 1 ASCs – The Next Five Years Presented by: Scott Becker, Partner www.mcguirewoods.com

2. CONFIDENTIAL 2 ASCs - The Next Five Years 1)Overall, still a very good business with good returns – Margins – 30 to 40% in successful Centers 2)More need to plan projects with large margins of safety 3)25% of ASCs are owned in part by a management company – Deutsche Bank

3. CONFIDENTIAL 3 ASCs – The Next Five Years 4)Several macro trends tend to be negative a.Commercial payors consolidate b.Commercial payor pressure on out of network c.Less growth in truly independent doctors d.Increased employment of physicians by hospitals

4. CONFIDENTIAL 4 ASCs – The Next Five Years 4)Several macro trends tend to be negative e.More economic pressure on Federal government f.Specialty Hospital Development faces legislative challenges – ASCs should not allow physician owned hospitals to “swing in wind” g.Medicare reimbursement changes i.Higher acuity good ii.Lower acuity negative

5. CONFIDENTIAL 5 ASCs – The Next Five Years 5)Greater pressure to be a.Good focused operator b.Projects with great Margin of Safety c.Some diversity i.Payors ii.Doctors iii.Procedures iv.Suppliers d.Build on strengths e.15.1 Physicians per partnership – Deutsche Bank f.Remember your mistakes

6. CONFIDENTIAL 6 ASCs – The Next Five Years 6)State Specific Challenges a.Out of Network Investigations – New York – state also attacking health plans b.Self Referral Legislation – New Jersey

7. CONFIDENTIAL 7 ASCs – The Next Five Years 7)Specialty Specific Challenges and Issues a.Ortho b.GI c.Ophthalmology d.Pain e.Spine f.ENT g.Urology

8. CONFIDENTIAL 8 ASCs – The Next Five Years 8)Net Revenues per Case – VMG Health Intellimarker

9. CONFIDENTIAL 9 THE END Document #5064429 Commercial Litigation | Complex Products Liability & Mass Tort Litigation Corporate Services | Financial Services | Health Care | Labor & Employment Real Estate & Environmental | Taxation & Employee Benefits | Technology & Business ATLANTA BALTIMORE CHARLOTTE CHARLOTTESVILLE CHICAGO JACKSONVILLE LOS ANGELES NEW YORK NORFOLK PITTSBURGH RICHMOND TYSONS CORNER WASHINGTON, D.C. ALMATY, KAZAKHSTAN | BRUSSELS, BELGIUM www.mcguirewoods.com  2006 McGuireWoods LLP