Vining Health Systems Power Point - Derrick Douglass

Presenter: Derrick B. Douglass

Title: President

Company: Vining Health Solutions

Date: April 20, 2009

Vining Health Solutions

BUSINESS PLAN

© Vinings Health Solutions Confidential Proprietary


Federal Government supports Electronic Medical Records (EMR)


U.S. Healthcare Facts & Opportunities

Executive Summary

Healthcare Industry

Market Research and Analysis

Services

Leadership Team & Key Positions

Financial Information

Questions

Agenda


Executive Summary


Our Vision We are driven to make a positive impact on healthcare

Turnkey solutions that help practitioners realize their full potential as caregivers

Products that impact the patient directly, resulting in a healthier, better informed populace

Creative, ethical and passionate work environment

Innovative products

Maximize investor value



Executive Summary

Business ConceptTurnkey EMR Solution

• EMR Project Management• Workflow Analysis*• EMR Software*• Document Imaging*• Medical Records Staffing*

Target Market • Hospitals• Physician Offices

Actuals & Projections

• 2008 healthcare costs - 16.1% of GDP ($2.2T)• 2017 est. healthcare costs - 19.1% of GDP • 2007 hosp. expenditures - $687B• 2007 physician office expenditures – $346B

* Value Added Reseller

Healthcare is a massive industry bursting with opportunity


Executive Summary – cont’d

Healthcare Industry

• Exceptional growth o Increase efficiencyo Reduce costso Deliver high service levels

EMR Market Research • $19B Federal Government EMR investment

• Increasing rates of EMR adoption

• Numerous fragmented service providers

Leadership Team

• 100 years of healthcare technology experience

• Healthcare technology ‘thought leadership’

Harvest• VHS placed on market after 5yr harvest period

• Market Price: $20 M

Healthcare Industry



Healthcare | EMR Industry

* Value Added Reseller

Rapid US Healthcare Industry growth

• Technology, Economy & Consolidation are driving industry change

• US healthcare spending more than twice that of other developed nations.

o 2008 healthcare costs - 16.1% of GDP ($2.2T)

o 2017 est. healthcare costs - 19.1% of GDP

Rapid EMR Healthcare Industry growth

• Strong need for turnkey solutions• EMR Adoption rates increasing at 17% per year• $19B Federal Government investment

Competitive Forces


Rivalry Among Firms: Low to Moderate

· EMR Software Application market is highly fragmented

· Workflow application and consulting is highly fragmented

Medical Staffing solutions firms are plentiful

Bargaining Power of Suppliers: Low to Moderate

· EMR Software Application market is highly fragmented

· Workflow application and consulting is highly fragmented

· Medical Staffing solutions firms are plentiful

Bargaining Power of Buyers: Moderate

· Hospital systems are fragmentedthough large systems exert strong buyer power

· Hospital systems are fragmentedthough large systems exert strong buyer power

Threat of New Entrants: High

· EMR is a high profit potential market

· EMR is a relatively new and fragmented industry

· The moderate to high-level capital requirement may not dissuade entrants given the markets profit high potential

Substitutes: High

· 90% of all healthcare providers continue to us paper medical recordkeeping methods

Competitive Forces – Electronic Medical Records Solutions MarketApril 5, 2009

Author: Derrick B. Douglass

Competition


Market Research & Analysis


Market Research & Analysis


Hospital

As the population ages, a rise in inpatient admissions will continue to rise at increasing rates

• Annual hospital expenditures – $687B

• Hospitals employ 5M people • Annual inpatient admissions 35M

Market Research & Analysis – cont’d


Physicians

As the population ages, a rise in office visits will continue to rise at increasing rates

• Annual physician office expenditures – $346B

• Physician offices employ 1.9M

• Annual office visits are 902M

VHS Services


VHS Services


EMR Project Management

• Planning• Organizing• Managing EMR projects

Work Flow Analysis

Automating the EMR process and establishing procedures that are consistently followed

• Eliminates unnecessary steps• Increases efficiency • Cost reduction

EMR Software & Hardware

• Electronic Medical Record:o Creationo Storage o Analyticso Sharing

Document Imaging • Preparation• Scanning• Coding• Indexing

Staffing • EMR Staffing Services

VHS Services


Hospital Customers Two market segments:

• Large Hospitals (with 200 beds or more)

• Midsize Hospitals (with less than 200 beds)

Larger hospitals usually have a more complex systems requiring a more comprehensive IT solution

American Hospital Directory• 6114 hospitals in the United States• 2500 hospitals with less than 200 beds

Physician Office Customers

• Four market segments:



Organization Structure



Derrick Douglass*, President, CIO - MBA Clark Atlanta Univ.

Vincent Smith*, CFO -MBA Northwestern Univ.

Arthur Nijiani*, COO - MBA Wharton School of Business

Helen Garrett-Liston, VP of Client Care - M.A. Temple Univ.

VP of Marketing – To be determined

VP of Sales - To be determined

Chief Supplier Officer (CSO) - To be determined


* Founder

Financial Information


Pro Forma Income Statement


Pro Forma Cash Flows


Pro Forma Balance Sheet


Profit, Gross & Opt. Margin


VHS’s object is to develop an enterprise that has higher than average Profit, Gross and Operating Margins

Break-Even Analysis


VHS estimates that it will break-even during the first years

Breakeven Analysis

Cost Description Fixed Costs ($) Variable Costs (%)Variable Costs Cost of Services Sold $ 1,300,000 55.0%Direct Labor (Includes Payroll Taxes) $ 300,000 7.0%Fixed Costs

Office Space Lease Expense $ 45,000

Salary $ 1,744,519

Travel Expenses $ 36,000

Legal Services $ 18,000

Insurance $ 12,492

Laptop, Server & Peripherals $ 36,000

Marketing $ 7,200

Stationery costs per staff $ 8,400

Utilities $ 15,600

Office Furniture Rental $ 6,000

Internet/Broadband/Wireless Connection $ 6,000

Total Fixed Costs $ 1,935,211 Total Variable Costs $1,600,000 62.00%

Breakeven Sales level = $1,947,284

Investment Summary


•$600T initial start-up funding provided by company founders

•$3M angel investment in Y3 increases VHS’s ability to attract more

customers

Investment Summary – Cont’d


• Average company value at Y5 = $19.7M

• VHS will be placed on the market at Y5

Questions:::End


Supplemental Information


Marketing Plan


Marketing Plan


Sales • B-2-B Personal selling• CRM and sales funnel• Identify customer needs • Up Selling/ Cross Selling

Advertising • Trade Journalso Physicianso Hospital Administrators, Procurement, IT

Managers

Promotion • Trade Showso Physicianso Hospital Administrators, Procurement, IT

Managers

Website


Website


Critical Risks, Problems & Assumptions


Critical Risks, Problems & Assumptions


Implementation and Sales of Third Party Software Risks

• Sales and implementation cycles length may adversely affect our future operating results

• Implementation delays may harm our reputation

• Implementation costs may exceed expectations

Healthcare IT Industry and Market Related Risks

•The Healthcare Industry’s IT spending •Healthcare Industry consolidation

PMPREVIEW – Project Management

ATTIVO – Workflow Management

CACHE – Technology (Database Development)

Microsoft - Technology

Athena Health - Technology

Capsule - Technology

Cisco Systems - Technology

Citrix – Technology

Partners


Credits


Course: Entrepreneurship

Instructor: Edward Irons, PhD.

School: Clark Atlanta University

Presented by: Derrick B. Douglass

Documents

Vining Health Systems Power Point - Derrick Douglass