Short presentation on the current financial condition of hospitals, effects of healthcare reform, and long term implications of healthcare cost reduction. Includes many facts and a bit of shameless promotion of HPA.

1. U.S. Hospitals are in the Leading Edge of an Economic Storm

2. Overview Short term: Many hospitals are financially struggling now due to the economic downturn. Medium term: The impact of Healthcare Reform has not yet occurred. It will be significant. Long term: The U.S. will have to address its enormous healthcare cost problem. When it does, the impact on hospitals will be huge.

7. The Healthcare Reform Bill is not intended to bring down total spending. Planned cost reductions are intended to offset the $938B cost of insuring 32M more people. Best case: Healthcare Reform Bill is cost neutral. What happens when the U.S. gets serious about reducing healthcare spending?

10. Past Projects Annual Client P&L Impact Client Description Project Type P&L Impact (Revenue) P&L Impact (Oper Cost) 110-bed Community Hospital, Southeast Pricing Analytics +$2.2 million Large Health System, FL Pricing Analytics +$9.8 million 184-bed Community Hospital, Southeast Pricing Analytics +$5.0 million 80-bed Community Hospital, Rocky Mtns Pricing Analytics +1.2 million 400+ bed University Hospital, TX Pricing Analytics +2.0 million Large Univ. Hospital Broad Strategic Sourcing ($11 million) 31-hospital system Narrow focus on telecom, wireless, wide area networking ($3.5 million) Large Trauma Center Broad Strategic Sourcing ($6.5 million)

11. P&L Improvement through Innovation