Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (January 2020)
43 slides from Astrana Health's investor presentation, Jan 14, 2020
Slide 1: Investor Presentation January 2020
Investor Presentation January 2020
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27A of the Securities Act and Section 21E of the Exchange Act, such as statements about the transactions described herein, includ
Slide 3: Introduction to ApolloMed
3 Introduction to ApolloMed (1) Last twelve months revenue includes pro forma revenue of Alpha Care Medical Group and Accountable Health Care. (2) As of January 1, 2020. Note: IPA = Independent Practice Association. FFS = Fee - For - Service. ApolloMed and its network of affiliated entities provide
Slide 4: Evolution of a Population Health Management Company
4 MSO ~575,000 IPA ~540,000 ACO ~30,000 Total member lives ~1,145,000 (1) Evolution of a Population Health Management Company ApolloMed’s physician - centric approach has driven its growth into one of the largest population health management companies delivering best in class care while managing cos
Slide 5: Key Business Operations / Services
5 Key Business Operations / Services Description Representative ApolloMe d Offering Revenue Model Independent Practice Association ▪ Network of primary and specialty physicians ▪ Delivers care under risk - bearing and capitated arrangements with payors ▪ Receives risk pool settlements and incentive
Slide 6: Horizontal Integration Strategy Drives "Single-Payor" Model
6 Horizontal Integration Strategy Drives “ Single - Payor ” Model By horizontally integrating across the healthcare ecosystem, ApolloMed creates a virtual “ single - payor ” model to provide high quality, low cost healthcare for its members Reduced H ea l t h ca r e Costs Improved P op u l a t i on
Slide 7: Creating a Next Generation Integrated Healthcare Platform
7 Creating a Next Generation Integrated Healthcare Platform ApolloMed continues to be at the forefront of industry trends towards value - based care and preventative medicine ▪ Participation began January 2017 ; payments commenced April 2017 − ~30,000 Medicare FFS patients currently receiving medica
Slide 8: ApolloMed's Technology Platform – Apollo Care Connect
8 ApolloMed’s Technology Platform – Apollo Care Connect ® ▪ Emphasis on chronic care and high - risk patient management ▪ Integrates with and captures clinical data from multiple EHRs, wearables and other tracking devices ▪ Flexible platform allows for easy integration with other internal and 3 rd p
Slide 9: Apollo Care Connect Technology Snapshots
9 Apollo Care Connect ® Technology Snapshots
Slide 10: Organizational Overview
10 VIE = Variable Interest Entity. Organizational Overview Unconsolidated entities. Other Entities ▪ One of the largest IPAs in the U.S. with market density in Southern California ▪ Large earnings contributor to AMEH, historically consolidated into AMEH’s financial statements as a VIE ▪ Recent trans
Slide 11: ApolloMed Key Differentiators
11 ApolloMed Key Differentiators ▪ We recognize the importance of the physician’s role in influencing and driving the value proposition in transforming healthcare Physician - driven ▪ We respect the physician’s right to remain independent and recognize there are multiple pathways and opportunities t
Slide 12: ApolloMed Key Recent Accomplishments
12 ApolloMed Key Recent Accomplishments ; December 2017 Closed merger with ApolloMed and NMM ; May 2019 APC completed acquisition of Alpha Care Medical Group ; August 2019 APC completed acquisition of Accountable Healthcare IPA ; September 2019 Completed APC transaction (including $290mm credit faci
Slide 13: Experienced Management Team with a History of Success
13 Experienced Management Team with a History of Success Name Title Year Joined Apollo Med Background Kenneth Sim, M.D. Executive Chairman and Co - CEO 2006 ▪ Also serves as Chairman of APC ▪ Holds bachelor’s degree from UCLA and M.D. from Loma Linda University School of Medicine and the Autonomous
Slide 14: Board of Directors with Substantial Industry Experience
14 Board of Directors with Substantial Industry Experience Name Title Year Joined the Board Background David Schmidt Director 2013 ▪ Principal of Schmidt & Associates and former CEO of the TPG - International Health Academy; previously served as CEO of SCAN Health Plan and Medichek ▪ Bachelor’s degr
Slide 15: Allied Physicians of California IPA Overview
15 Allied Physicians of California IPA Overview Note: HMO = Health Maintenance Organization . One of the largest IPAs in the U.S. with market density in Southern California ▪ Operates robust network of physicians and medical professionals − Focused on improving outcomes for members by providing qual
Slide 16: ApolloMed and Allied Pacific of California IPA Transaction Overview
16 ApolloMed and Allied Pacific of California IPA (“APC”) Transaction Overview ▪ $545 million (1) Transaction Size ▪ ~15 million shares of ApolloMed common stock at $19.98 (2) (~$300 million) ▪ Cash consideration of ~$245 million Consideration ▪ Forms one of the nation’s largest integrated care mana
Slide 17: APC Transaction Integrates the Financial Results of ApolloMed and APC
17 $356.4 $519.9 $519.9 $629.9 $47.9 $51.8 $105.5 ND APC Transaction Integrates the Financial Results of ApolloMed and APC Note: PF = Pro forma assuming consummation of each transaction at the beginning of the period. See appendix for EBITDA reconc ili ation details. Source: Company filings. (1) EBI
Slide 18: Evolution of Healthcare Delivery to Value-Based Care
18 Evolution of Healthcare Delivery to Value - Based Care ▪ Siloed care with little coordination among providers ▪ Volume - based system results in redundant, sometimes contradictory care ▪ Limited integration and data sharing ▪ Reactive care as opposed to proactive ▪ Little sensitivity to cost ▪ Po
Slide 19: Leading Patient-Centric Value-Based Care Provider
19 Leading Patient - Centric Value - Based Care Provider (1) As of January 1, 2020. Note: SNF = Skilled Nursing Facility. ApolloMed is embedded within the healthcare ecosystem, offering a “ single - payor ” model to physicians and patients via its horizontally integrated structure and partnerships ▪
Slide 20: Unique Model to Attract and Retain Physician Partners
20 2015 2016 2017 2018 ▪ Combination of clinical, administrative, and technology capabilities enable physicians to focus on patients while retaining a greater share of their capitated income stream ▪ Flexible physician schedules promote work - life balance ▪ Focuses on high quality care, offering su
Slide 21: ApolloMed Delivers High Quality Outcomes
21 Medicare Average Length of Stay ApolloMed Delivers High Quality Outcomes Cloud Based IT Platform Hospitalists A CO IPA Shift T owards Value - Based Care Key Metrics Senior Inpatient Bed Days / 1,000 Patients 603 864 1,706 APC Local Competitor Medicare FFS * Senior Medical Loss Ratio 3.7 6.7 APC N
Slide 22: Established Market Presence Throughout California
22 San Bernardino Riverside San Diego Los Angeles Kern Tulare Kings Fresno Madera Santa Cruz San Mateo Yolo Placer Sacramento San Joaquin Established Market Presence Throughout California Diversified Presence Throughout California Counties Served ▪ Strong market position in key markets with density
Slide 23: Long Term and Diversified Payor Relationships
23 Long Term and Diversified Payor Relationships Top Payor YTD September 2019 % of Rev. YTD September 2018 % of Rev. Payor A 14% 13% Payor B 13% 17% Payor C 10% 13% Payor D <10% 16% Payor E 11% <10% In the Company’s 20+ years of operations, ApolloMed has never lost a payor contract ▪ Consistent dive
Slide 24: Multiple Strategies to Drive Growth
24 Multiple Strategies to Drive Growth x Continue to invest in technology capabilities to further drive network management and clinical care capabilities x Expand population health management capabilities including member engagement, preventive care and data analytics x Leverage population health ca
Slide 25: Case Study: APC acquisition of Alpha Care
25 Case Study: APC acquisition of Alpha Care ▪ On May 31, 2019, APC successfully closed the acquisition of Alpha Care Medical Group, Inc. (“Alpha Care”) for $45 million, gr eat ly expanding ApolloMed’s presence in the Inland Empire market ▪ Alpha Care is an IPA incorporated in March 1993 in Californ
Slide 26: Case Study: APC Acquisition of Accountable Health Care
26 Consolidate Additional IPAs U nder APC (cont’d) Case Study: APC Acquisition of Accountable Health Care ▪ On August 30, 2019, APC successfully acquired all outstanding shares of capital stock in Accountable Health Care IPA (75% not he ld by APC) for $7.25mm. APC owns the remaining 25% of the outst
Slide 27: Expand Physician Network and Membership
27 ▪ Adding physicians to the ApolloMed platform (particularly primary care) is key to growing lives under management − Lives under management can either be owned (consolidated) or managed (management fee) ▪ ApolloMed can grow physician relationships in many ways − Recruiting new physicians to the p
Slide 28: Multi-Faceted Growth Opportunity
28 Multi - Faceted Growth Opportunity Add New Service Lines Expand Partnerships Enter New Markets and Geographies ▪ Consistent dialogue with new IPAs to expand into new markets ▪ Recent expansion into San Bernardino, San Mateo, Riverside and Orange counties ▪ Will be selective and opportunistic in e
Slide 29: Overview of ApolloMed Payment Schematics
29 Payors Overview of ApolloMed Payment Schematics IPA Value Chain Relationship ACO Value Chain Relationship Individuals Employees Seniors / Disabled Beneficiaries Exchange Commercial Medicare Advantage Medicaid Employers CMS States IPA (Professional Risk) Hospital ( Institutional Risk) Shared Savin
Slide 30: ApolloMed's Capitation and Risk Sharing Model
30 ApolloMed’s Capitation and Risk Sharing Model Individuals & Employers Funding Sources Health Plans Physician Groups / IPAs MSOs Denotes payments Denotes risk sharing Denotes cost savings Hospitals ▪ Capitated models incentivize quality of care and cost reduction ▪ ApolloMed uses its scale and ana
Slide 31: ApolloMed Sources of Revenue
31 1% 3% 7% 9% 80% $382 YTD September 2019 Note: Not pro forma for Alpha Care and Accountable Health Care transactions. ApolloMed Sources of Revenue (YTD 09/30/2019) − Capitated fees for medical services via direct arrangements with managed care providers − Typically pre - paid monthly based on numb
Slide 32: Historical Financial Profile
32 ~$18mm Q1 APA ACO revenue assumption based on reported run - rate. See detail on page 33. Note: 2019 revenue not pro forma for Alpha Care and Accountable Health Care transactions. APC membership denotes organic growth excluding Alpha Care and Accountable Health Care acquisitions. 2006 2014 09/30/
Slide 33: Historical Financial Profile (cont.)
33 $413 $382 $18 $58 $37 $495 2018 YTD 2019 YTD $167 $156 $9 $165 Q3'18 Q3'19 Historical Financial Profile (cont.) ($ in millions) Recent Revenue Trends Q3 Year Over Year Performance YTD September 2019 Year Over Year Performance ▪ Reduction of risk pool revenue from refinement of input assumptions i
Slide 34: Historical Financial Profile (cont.)
34 Historical Financial Profile (cont.) Note: See appendix for EBITDA and Adjusted EBITDA reconciliations. Not pro forma for Alpha Care and Accountable Health Care transactions. Revenue Overview YTD Results Commentary $520 $488 $413 $382 $18 $18 $506 $400 2018 LTM Sept 2019 3Q 2018 YTD 3Q 2019 YTD C
Slide 35: Current ApolloMed Capitalization
35 Current ApolloMed Capitalization Note: See appendix for EBITDA reconciliation. Balance sheet data as of 9/30/2019. (1) Includes 17.0mm treasury shares. (2) Fully diluted shares outstanding includes 1.5mm and 3.8mm options and warrants assumed exercised on 12/06/2019 closing pr ice of $19.01. (3)
Slide 36: Foundations of Shareholder Value
36 Foundations of Shareholder Value Financial Parameters Key Business Attributes x Organic growth and acquisitions Revenue Growth x Ability to scale with future IPAs EBITDA Margin Expansion x Managed lives increased from acquisitions − Grew managed lives from ~800K to ~1.1mm (1) Managed Lives Growth
Slide 37: Appendix
Appendix DO
Slide 38: ApolloMed Lives Under Management
38 ApolloMed Lives Under Management Note: 2017 and 2018 membership pro forma for Accountable Health Care. 2019 membership not pro forma for the new MSA entered into October 2 , 2019 . Capitated Membership (09/30/19) Capitated Membership Trends ▪ Increase in IPA lives under management due to the acqu
Slide 39: ApolloMed at the Center of Integrated Care / Population Health Mgmt.
39 ApolloMed at the Center of Integrated Care / Population Health Mgmt. Health Plan Partners Genetics Artificial Intelligence Behavior Health Services Senior Wellness Centers Ambulatory Surgical Centers Hospital Partners Healthcare Cities Micro - Hospitals Skilled Nursing Facility Sub Acute Care (As
Slide 40: EBITDA Reconciliation
40 EBITDA Reconciliation ($ in millions) Note: Not pro forma for Alpha Care and Accountable Health Care transactions. (1) LTM and 2019 financials post - APC transaction. 9 months ended 2018 LTM 09/30/2019 09/30/2018 09/30/2019 Net Income $60.3 $17.0 $62.2 $19.0 Depreciation and amortization 19.3 18.
Slide 41: APC Transaction Overview
41 APC Transaction Overview 1) $ 100 million Revolving Credit Facility ($60 million funded); $190 million Term Loan Credit Facility. 2) Newly created Professional Medical Corp . 3) Treasury stock, considered issued but not outstanding for AMEH. 4) Considered issued but not outstanding for APC. Apoll
Slide 42: Operations Overview
42 Operations Overview Integrated medical systems with large patient pools are positioned to take advantage of industry trends, meet patient and government demands, and benefit from cost advantages due to scale and integrated approach of care delivery Independent Practice Associations Contract with
Slide 43: Key Acronyms
43 Key Acronyms ▪ ACO: Accountable Care Organization ▪ AIPBP: All - Inclusive Population - Based Payments ▪ APC: Allied Physicians of California IPA ▪ CMMI: Center for Medicare and Medicaid Innovation ▪ CMS : Centers for Medicare & Medicaid Services ▪ DME: Durable Medical Equipment ▪ Health Plan / P
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