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Gain Control of Underperforming Assets & Improve Restructuring Results
Building modernized healthcare delivery platforms that yield better results
SCALE Company Overview
Illustrative Example of Sponsor + SCALE project team structure:
We believe that no single individual can adequately solve for all the variables that drive Physician Group performance – that iswhy our approach is to come with a village, an army of proven experts
The right resources + expertise can determine success or failure
Our team will work side-by-side with your investment professionals, augmenting & empowering your diligence and post-close processes
SCALE clinical services SCALE practice operations and management
SCALE is exclusively focused on studying, building and institutionalizing Physician Group best-practice
Core Specialty
Pathology Radiology
PharmaPhysicaltherapy
Infusion
Payor Contracting HR
Talent Recruitment
ITRevenue
Cycle Management
Marketing
Manager/Board Advisor
Analyst
TargetPhysician Group
partner
spo
nso
r investm
ent team
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Every interaction with a Physician Group presents an opportunity to compare and analyze what works across a range of management disciplines and clinical specialties as we seek to continuously perfect our
scaling algorithms
The SCALE network:Compounding crowd wisdom
SCALE identifies, institutionalizes and shares pockets of best-practice from Physician Groups nationally
Clinical specialtiesService offering portfoliosGrowth and integration strategies
Geographic focus and expansion Physician practice and MSO ownership structuresPhysician compensation structures Staffing ratios, physician recruitment strategies, mid-level utilization
Payor contracting strategiesOperational domain performance
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Our takeaways from each engagement help drive increased value-add and better performance results across our broader client portfolio
Practice
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PracticePractice
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Practice
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SCALE’s service platform addresses critical gaps in alternative market offerings
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Single Domain Consultant
Generalist Consultants
Private Equity Operating Partner
MSO Management Team
Provider Platform Expertise Coverage
Niche Domain Deep Expertise ✓ ✓(narrow focus) Varies ✓(narrow focus) ✓(narrow focus)
One-Stop Shop (Clinical Specialty + Ancillary + Operational Expertise)
✓ × × × ✓(narrow focus)
Market Focus
Exclusively Provider Platforms ✓ ✓ × Varies ✓
Up-to-Date National Best-Practice Exposure Across Multiple Specialties
✓ Varies ✓ × ×
Both Private Equity & Independent Platform Experience
✓ Varies × Varies Varies
Role Capabilities
Long-Term & Co-Invest Interest ✓ × × ✓ ✓
Strategy Development / Board Advisory ✓ × × ✓ ✓
Independent Third-Party Department Review
✓ ✓ (narrow focus) Varies × ×
On-Going Execution Advisory Oversight ✓ Varies Varies – generally no × ✓
Outsourced Solution Offering ✓ Varies Varies – generally no × × 5
SCALE’s execution principles
Thoughtful Execution Plan
• Begin with the end goal: Invest in a thoughtful analysis of where we want to be, work backwards to develop structured execution plans that bridge between current and target future states
• Organized communication: Interim performance and execution status clarity, structured communications channels and managed expectations
• Execute on a portfolio of initiatives: Focus on overarching organizational success vs. specific initiative success; leverage realized “wins” in one initiative to drive execution momentum across the organization
Balanced Portfolio of Execution Resources
Achieving execution results requires a balanced portfolio of execution resources and skillsets: expert advisory + holistic project management + practical solutions + execution resources = tangible results• Seasoned executive advisory • Hands-on project management • Comprehensive stable of technical domain expertise • Well-resourced pool of execution support resources
Strong Execution Culture
• Build upon “wins”: Forward momentum, results-oriented • Persistence, show vs. tell approach: New initiatives often take bandwidth and time to develop. Our team does not let
go of an initiative until it “catches” with internal management and becomes embedded in the Company’s DNA.• Management team partnership: Emphasis on patience, flexibility, support and collaboration • Efficiency: An ineffective meeting or initiative is a hidden cost – i.e., aim to run the fast break without the ball touching
the floor
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SCALE’s execution principles
Advisory / Light Execution Support
Heavy Execution Support
Full-time, Outsourced or Special Project
Leadership
Executive Partner (with relevant C-Suite
experience)
Project Management
Operational & Clinical Service Line Technical
Teams
Analytics & Execution Support Resources
• Comprehensive range of utilization models: From advisory and execution oversight to part-time, full-time & outsourced execution leadership• Flexibility to adjust team composition and utilization levels as strategic objectives and priorities evolve
Customized project teams and utilization models designed to meet client-specific needs
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SCALE Restructuring Service Overview
Underperforming Assets Are Consistently Correlated With Key Recurring Themes
▪ Opaque, lagging and superficial performance reporting & analytics
▪ Reactive management decision-making & delayed Board intervention
▪ Avoidance of logical pathways out that require meaningful change or heavy lifts
▪ Limited stress testing of management plans by qualified domain expert peers
▪ Overwhelmed management teams due to insufficient leadership bandwidth and feeling the burden of not knowing “the answer”
Common Themes Across Underperforming Assets
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▪ MSO service offerings that fail to pass the “value add” test
▪ Subpar physician satisfaction & communications
▪ Stale business strategy & market focus that is failing to keep pace with evolving market dynamics
▪ Ambiguous team culture fueled, in part, by weak add-on integration programs
▪ Flawed core principles; focus on:o Growth in sites / physicians vs.
growth in profito Any relationship vs. durable
relationships o Appeasing everyone vs.
delivering high quality service
▪ Reliance on overly rosy projections
▪ Excessive historical leeway provided in selection of & execution on costly growth / experimental initiatives
▪ Material gaps in accrual revenue vs. cash collections
▪ MSO service offerings that are materially over- or under-charged
▪ Excessive MSO debt
▪ Mixed portfolios with pockets of material underperformance – i.e., sites, providers, service-lines – that need to be unpackaged from areas of stronger performance
Management & Board Decision-Making Financial PerformanceValue Proposition
When Dealing With Underperforming Assets, Time is CostlyEffectively Navigating a “Crisis” Requires Reacting Quickly & With Sufficient Resources
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Augment Performance & Execution Status Clarity
Implement Solutions That Offer Near-Term Relief
Define Reorganized Company’s Strategy and
Growth & Development Plan
Immediate Execution Immediate Planning, Mid-Term Execution
Scale’s Tailored Project Team Addresses Core Areas of Underperformance Efficiently & Effectively
Scale Domain Advisor Second Opinion▪ Leverage Scale’s domain advisors for a second
opinion on clinical service line and operational strategy & performance
Scale Project Management & Analytics• Build analytics programs that summarize
baseline performance and highlight areas of opportunity & acute underperformance
• Define and quantify target near-term initiatives
• Implement Scale’s restructuring KPI dashboard to facilitate stakeholder alignment on priority focus areas and transparently track status on key restructuring initiative results
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Scale Project Management• Oversee & support execution of near-term
restructuring and performance improvement initiatives o As appropriate, serve in interim
management roles or support new leadership talent sourcing
• Build & manage execution look ahead trackers to facilitate status clarity and accountability
• Meet with key stakeholders to communicate performance, anticipated business changes & strategic rationale for the same
Scale Analytics• On-going analytics to interpret evolving
circumstances and initiative results
Scale Domain Advisors• On-going technical domain advisory,
oversight and execution support
Scale Domain Advisors, Project Management & Analytics• Develop a target reorganized company
business plan, including pro formao Value proposition offered to key
market stakeholders
o Portfolio of clinical services
o MSO service scope and pricing
o Organic & inorganic growth execution plan and sequencing
o Target prospect / acquisition target “scorecard”
o Payer strategy and strategic partnership opportunities
o Potential future buyer landscape
o Management team and infrastructure required to execute
Augment Performance & Execution Status Clarity
Define Reorganized Company’s Strategy and Growth & Development Plan
Implement Solutions That Offer Near-Term Relief
Select Turnaround Engagement Results
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Engagement 1(Women’s Health)
Select Key Initiatives Select Key Results
• Employed provider restructuring• Finance department restructuring• Managed lender discussions• Took over revenue cycle department
• Achieved cash flow profitability within three months against initial cashflow negative results.
Engagement 2(ASC Management)
• Developed restructuring business plan• Supported a transition of the entire C-Suite
team• Developed & implemented Board,
management team and restructuring-specific executive summary reporting & analytics
• Approximately 15% increase in EBITDA achieved through realized cost savings
• Accelerated cash cycles for working capital needs through aged lien A/R factoring
• Ended two on-going acquisition processes for risky assets
Engagement 3(Multispecialty/Vascular)
• Employed provider restructuring• Provider scheduling and utilization
restructuring • Coding oversight program augmentation • Physical site & select clinical service line
closure• Took over revenue cycle department • Supported implementation of new clinical
service lines that generated incremental revenue streams
• Breakeven performance within eight months against initial cashflow negative results
SCALE Physician Group at a glance
Physician Groupengagements
Our partners represent a broad network
Providers across our partners
States our partners operate across
Service line andoperational solutions
offered by SCALE
18 1,410 15 42
Healthcare companiesfounded by our team
Exits from healthcarecompanies our team
has led
Healthcare c-suite rolesour team has held
Healthcare private equity funds our team has advised
(operating partner)
30 25 107 +30
Our team’s extensive and diverse expertise
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Select Leveraged Loan Providers SCALE Has Worked With To Date
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SCALE partners
*Completed engagement
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What our clients say
SCALE is a valued partner to sponsors
“I have been thrilled with the work Scale Physician Group has done for us on multiple healthcare platform bids. Their in-depth diligence reports on specific initiatives always gives us a competitive advantage over our competition. We look forward to our continued partnership with the Scale Team.”
Andrew MaroldaManaging Director and Co-FounderThe Beekman Group
“Scale’s thorough market research, management presentation participation, and MSO formation and best practice analysis added a valuable additional layer of strategy and operational insight that helped us make the best decisions for our firm across multiple deals. The quality and depth of Scale’s work augmented our deal execution process.”
Anonymous
“Scale Physician Group has been a valued and complementary partner to our investment professional team throughout our physician platform acquisition process. Scale’s analysis of a diverse range of operational, service line and growth initiatives provided us with a uniquely efficient channel for holistic operational scaling execution diligence conducted by a highly experienced team of professionals, as well as enhanced clarity on key post-close
business plan initiatives. We look forward to our continued work with Scale.”
Anonymous
“
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SCALE’s deep bench of seasoned & diverse healthcare expertisePlatform development & operations execution team
Suniti Ponkshe
Chief Advisor, Payor Contracting Strategy
Robert Trenczer
Chief Advisor, Revenue Cycle Management
Sandy Seay
Chief Advisor, Human Resource Solutions
Kylie Luff
Senior Advisor, Human Resource Solutions
Daniel Maimin
Chief Advisor, Marketing Strategies
Jason Schifman
Co-Founder & President
Jack Trunz
Analyst, Platform Development
Roy Bejarano
Co-Founder & CEO
Bill Ingram
Vice President, Platform Development
Jeff Kahn
Chief Advisor, Human Capital Management
David Kovel
Chief Advisor, IT & Data Strategy
Mike Mirt
Chief Advisor, Executive Payor Strategy
Rob Popdan
Analyst, Platform Development
Dr. Steven Merahn
Head of Content Strategy
Jack Carrier
Associate, Platform Development
Susan Silhan
Vice President, Marketing
& Communications
Tracy Bahl
Operating Partner, National Payor Strategy
Ernest A. Varvoutis, III
Operating Partner, Hospital Systems
Jonathan Kron
Operating Partner, SCALE Europe
Jatinder Garcha
Vice President, Platform Development, SCALE
Europe
Parbinder Kaur
Vice President, Platform Development, SCALE
Europe17
SCALE’s deep bench of seasoned & diverse healthcare expertiseClinical service line advisor team
Bob DeCresce
Chief Advisor, Pathology
Gilbert Leistner
Chief Advisor, Telehealth & Telemedicine
Thomas Petrone
Chief Advisor, Radiology & Radiation
Oncology
Michael Reed
Chief Advisor, Primary Care, Medicare Advantage, ER
Staffing and Hospital Physician Services Programs
David Reese
Chief Advisor, Infusion & Pharma
Services
James Usdan
Chief Advisor, Dental Provider Platforms
& Physical Rehab
Keith F. Safian, MBA, FACHE
Chief Advisor, Healthcare System
Strategy
Larry Crist
Chief Advisor, Urgent Care
Charles Trunz
Chief Advisor, Hospital Relations
& Urgent Care
Dave Fitzgerald
Chief Advisor, Orthopedic
Provider Platforms
Richard Loewenstein
Chief Advisor, Behavioral Health
Platforms
Janice Pyrce
Chief Advisor, Behavioral Health
Platforms
Marcello Celentano
Chief Advisor, Ophthalmology
Provider Platforms
Steve Straus
Chief Advisor, Ophthalmology
and Dermatology Provider Platforms
Adam Nielsen
Chief Advisor, Home, Health
& Hospice Platforms
Chad Eriksen
Chief Advisor, Clinical Research
William Hughson
Chief Advisor, Fertility & Dialysis Provider Platforms
Sean Mullen
Chief Advisor, Vascular Platforms
Dr. Warren Melamed
Chief Advisor, Dental Provider Platforms
Laurie East
Chief Advisor, Pediatric Provider
Platforms
Steven Graubart
Chief Advisor, Micro Hospitals and Operating
Partner, Texas
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