Presenter: Derrick B. Douglass
Title: President
Company: Vining Health Solutions
Date: April 20, 2009
Vining Health Solutions
BUSINESS PLAN
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Federal Government supports Electronic Medical Records (EMR)
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U.S. Healthcare Facts & Opportunities
Executive Summary
Healthcare Industry
Market Research and Analysis
Services
Leadership Team & Key Positions
Financial Information
Questions
Agenda
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Executive Summary
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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
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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
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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
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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
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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
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Market Research & Analysis
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Market Research & Analysis
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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
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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
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VHS Services
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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
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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:
Leadership Team & Key Positions
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Organization Structure
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Leadership Team & Key Positions
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
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* Founder
Financial Information
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Pro Forma Income Statement
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Pro Forma Cash Flows
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Pro Forma Balance Sheet
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Profit, Gross & Opt. Margin
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VHS’s object is to develop an enterprise that has higher than average Profit, Gross and Operating Margins
Break-Even Analysis
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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
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•$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
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• Average company value at Y5 = $19.7M
• VHS will be placed on the market at Y5
Questions:::End
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Supplemental Information
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Marketing Plan
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Marketing Plan
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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
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Website
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Critical Risks, Problems & Assumptions
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Critical Risks, Problems & Assumptions
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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
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Credits
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Course: Entrepreneurship
Instructor: Edward Irons, PhD.
School: Clark Atlanta University
Presented by: Derrick B. Douglass