The State of the EMS Market and Life Link III September 2013 - PowerPoint PPT Presentation

Robert Sannerud, MBA, CPA, Life Link III The State of the EMS Market and Life Link III September 2013

Industry Introduction September 2013

Overview  Flight Plan  Scope of Services  History  Air Medical EMS Market  Life Link III Fleet and Finance  Comments & Questions September 2013

Flight Plan – definitions Air Medical Services (AMS) includes all types of medical transportation that are performed by specially trained clinical staff in specially equipped aircraft . . . .  Rapid Evacuation  Ability to access sick and injured patients and reduce the time enroute to definitive care.  Critical Care Services  Deployment of high performance clinical teams to initiate definitive care in the field.  Integrated Delivery System  Recognized as a key element of any regional emergency medical service response. September 2013

Flight Plan – rapid and critical  Rotor Wing - Specially equipped helicopters that allow rapid evacuation from unimproved landing areas. Scene response and interfacility transports.  Fixed Wing - Specially equipped airplanes that allow longer range means for rapid evacuation. Interfacility transports.  Critical Care Ground Transport Vehicles - Specially equipped ground ambulances used in support of air operations. Interfacility transports. September 2013

Flight Plan – Air Medical Program Staffing Clinical Crew types  MD:RN/EMT-P  RN:RN  RN:EMT-P  Specialty Transport Teams Aviation Crew Types  Single/Dual Pilot  A&P Mechanic  Other Support Staff  Aircraft Specific  Component Specific September 2013

Flight Plan History – military roots  French Revolution  "To afford the wounded speedy assistance": Baron Dominique Jean Larrey and Napoleon Korean War Vietnam and Gulf Wars September 2013

Flight Plan History – civilian evolution  1970s  1972 first civilian program Flight for Life St. Anthony Hospital – Denver  1980 – 32 programs 39 Helicopters 17,000 transports  1982 – St. Mary’s Hospital Grand Junction, CO September 2013

Flight Plan History - Life Link III 1974: Bio Medical Research Associates (BMRA) provides intra aortic balloon pump (IABP) and hemodynamic monitoring services. 1985: Life Link III buys BMRA; opens first helicopter base 1988: Contracts with Air Methods (AIRM) to provide aircraft and aviation services. 2000 to 2008: Opens 4 new helicopter bases; adds 5 new members 2008 to 2011: Rapid growth results in an operational turnaround September 2013

Current Life Link III Helicopter Service Area September 2013

History – civilian evolution (US)  Mid-1980s to Early 1990s  Moderate growth of programs and aircraft  Mid-1990s to Mid-2000s  Rapid expansion, primarily # of aircraft  Late 2000s to date  Continued growth  Many structural changes Pre-2004: Harris J, US Hospital-based EMS Helicopter Accident Rate Declines Over the Most Recent Seven-year Period, Helicopter Safety, Vol. 20 No. 4, July-August 1994 2004-2012: Atlas and Database of Air Medical Services (ADAMS), 10th Edition, 2012. September 2013

2004 September 2013

September 2013

Air Medical Market – US/International Aircraft Mix Aircraft Mix US International Total 1,159 2,063 Single Engine 50.4% 30.4% Twin Engine 49.6% 69.6% Source - Ascend: A Flightglobal Advisory Service, August 7, 2013; compliments of American Eurocopter September 2013

Air Medical Market – Market Composition US Market Composition (based on revenue) Hospital AIRM and Other 31% 32% PHI AMGH 10% 24% Metro Aviation 3% Source: Air Methods Corporation: Corporate Presentation, August 2013 September 2013

Air Medical Services – statistics average per base* Rotor Wing Fixed Wing  Average 600 Transports/base Per Year  Average 300 Transports/base Per Year  70% Interfacility  90% Interfacility  30% Scene Response  10% Scene Response  Average 40 Loaded Miles Per Transport  Average 200 Loaded Miles Per Transport  Average Patient/Clinical Mix  Average Patient/Clinical Mix  Trauma  Trauma  Cardiac  Cardiac  Pediatric/Neonatal  Pediatric/Neonatal  Stroke  Other *Source: Association of Air Medical Services, 2013 Air Medical Services in the United States September 2013

Life Link III Fleet and Finance Strategy  Three key factors:  Aircraft and Mission Profile  Clinical/patient care  Financial Criteria September 2013

Life Link III Aircraft fit to Mission  Fitch Associates analysis  NICU isolette  Full patient access  IFR vs. VFR operations September 2013

Life Link III Clinical - CPR technology  Lucas2 Device  Life Link III observed increasing incidence of cardiac arrest during transport  Clinical challenges due to current aircraft configuration  Equipment storage  Physical space to perform manual CPR  Stabilization of patient  Cost ~$17,000 September 2013

Life Link III Clinical – video laryngoscopy  Video Laryngoscopy  Intubation is a high risk, low volume procedure  Provides optimal view for a clinician who does intubations less frequently than anesthesia providers.  Increases first attempt success and minimizes time of the first attempt  Allows for teaching  Has multiple blades to accommodate all ages and sizes, (neonate to adult)  Cost ~$25,000 for complete set of pocket monitor and four blades September 2013

Life Link III Clinical - balloon pump technology  The service that started Life Link III  Bridge therapy  Pioneered by Texas Heart Institute early ’70s  Portability allows for uninterrupted therapy for patient to definitive care: heart transplant, or permanent assist device  Cost ~$80,000 September 2013

Life Link III Financial Criteria – Operations  Deliver cost effective quality care  Consortium Model  No member subsidy  Life cycle ownership costs  Staffing  RN:EMT-P  Part 135 aviation services contracted September 2013

Life Link III Financial Criteria - Revenue  Payor mix Transport Volumes, Payor Mix (1) (2) (3) Payor Source EMS AIRM LL3 Medicare 55% 32% 36% Medicaid 15% 22% 22% Insurance 25% 33% 37% Uninsured 5% 13% 5% 100% 100% 100% September 2013

Life Link III Financial Criteria - Revenue  Payor mix and payment rates Payment rate Transport Volumes, Payor Mix % of charges (1) (2) (3) (2) (3) Payor Source EMS AIRM LL3 AIRM LL3 Medicare 55% 32% 36% 20% 16% Medicaid 15% 22% 22% 9% 26% Insurance 25% 33% 37% 76% 70% Uninsured 5% 13% 5% 2% 2% 100% 100% 100% September 2013

Life Link III Financial Criteria – Receivables and Cash  Receivables management  Seasonality of business  Target DSO = 65 days  Cash management – no subsidy  24-month rolling forecast  Target Days Cash range = between 60 and 90 days  Line of Credit September 2013

Life Link III Financial Criteria – Financing strategy Financing Comparison Debt Debt Lease Traditional Tax Exempt Credit Financing amount Interest rate Issuance costs  Timing is everything – cost of borrowing  Lease versus own  Financing  Tax Exempt process September 2013

Air Medical EMS and Life Link III Question time September 2013

Contact Information Robert Sannerud MBA, CPA CFO, Life Link III bobs@lifelinkiii.com 3010 Broadway Street NE, Minneapolis, MN 55413 612.638.4905 office 952.564.1528 cell September 2013

RESOURCES  Atlas and Database of Air Medical Services http://www.adamsairmed.org/public_site.html  Association of Air Medical Services http://www.aams.org  International Helicopter Safety Team http://www.ihst.org/Default.aspx?tbid=1507&language=en-US September 2013