Employers are struggling with rising healthcare costs, which increase annually by 17%. Many are shifting to high deductible health plans to control costs, but this shifts more of the financial burden to employees. Better MRI proposes to help control outpatient MRI costs for self-insured employers and their employees by providing price transparency and negotiated rates. They will offer employer clients an initial package to cover a set number of MRI scans at a guaranteed savings of at least 10k, or they will refund 120% of the package cost. Ongoing fees will be a percentage of total savings from directing employees to low-cost in-network MRI providers. The company projects serving thousands of MRI scans annually and generating millions in savings and revenue over 11 years.

1. “BETTER MRI”
Finding The Best MRI ForYour Patients
Ming Yang, Kathleen Brennan-Beshara, Jon Herman, Alex Bagley, Charlie Maher
Healthcare Ventures
Dec 8, 2015

2. 58.4% self insured employers > 1000
employees
1

3. Healthcare cost climbs at 17% anuually
2

4. Solution/Cost sharing with employees
• High Deductible Plans
• Average deductible for employee from
• $2000 a year per individual
• $4000 a year for family*
• True out of pocket cost >$6000 a year
• HSA help with tax free savings, but not enough.
• Most financed with credit debt
3
*Kaiser family foundation

5. Benefits / Healthcare as key recruitment
tool
• Healthy employers, more productive employees, less
absenteeism
• Adobe system reports 100k’s in savings and higher
retention by investing in enterprise healthcare
management tool to support employees
• Management to Cadillac Tax: 40% tax on most
expensive private plans
4
PSU Professor of Economics Dan Goldstein

6. Employer contracts with Better MRI to
provide price transparency on costs
• Employees resent high deductible plans as they believe they
are bearing all the burden of rising healthcare costs.
• 44% of employers considering it the only option - 18% there
already*
• Better MRI helps avoid reaching the high deductible maximum,
which shifts all the burden to you once HD achieved.
• Competitors in the field do not offer price integrity, patients
frequently disappointed with charges double what appeared on
website.
• * pwc healthcare trends 2014
5

7. Competitive Analysis
Centralized
Control of
Cost
Variables
Dynamic
Change of
Healthcare
Plan
Discount
referrals &
bonuses
Gurantee
Price
Prepaid
services
with HSC
direct
Payment
Castlight,
CA
Y Y
Vitals
Smartshop
pers
MA, KY,
NH,PA
Y
SpeedWell,
WA/OR
Y
Better MRI Y Y
6

8. As deductibles rise consumers forego
medical care
7

9. John and Mary… & mgmt of healthcare
costs.
• In order to control healthcare cost, couple has chosen a
high deductible healthcare plan from their employer.
• John and Mary are responsible for first $2000 out of
pocket and need outpatient MRI.
8

10. Where do they cut costs?
9
28% avoid MD visits
24% skip Rx or take
less than prescribed
24% skip Specialists
referral
18% don’t do
reccdm f/u care ie
physical therapy
16% delayed or
cancelled
procedure,
screenings or
treatments
Health and wellness survey 2015

11. NPR One 11/30/15 radio show
Pricing Tools as ‘imperfect clue of costs’
Better MRI will offer ‘starter kit’ based on size / medical
history demographics of employee claims. For example,
upfront $10,000 package and if we don’t save at least $10k
in covered employee outpatient tests in 6 months…we will
refund 120% of the cost of starter package.
Ongoing cost will be a % of the total savings realized by the
employees for using Better MRI network
10

12. Employees need help
11

13. Shopping in the dark….
12

14. Value Proposition and Revenue
0
100
200
300
400
500
600
700
800
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr
10
Yr
11
Value Proposition
Unit of MRI Scans covered(in thousands)
Savings brought by using our service(in millions)
13
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr
10
Yr
11
Revenue
Revenue from self insured employer(in millions)
Operating Income(in millions)
Yr 1-5 Yr 6-10 Yr 11-
Savings per scan(in thousands) 5 3.5 3
Growth in Volume 100% 20% 5%
Charge 5% of cost savings

15. Validation on value proposition
• Companies offering self-insurance to their employees are
struggling to control costs of outpatient MRI for
employees & families.
𝟑𝟎 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐌𝐑𝐈𝐬 𝐩𝐞𝐫 𝐲𝐞𝐚𝐫
𝟑𝟎𝟎 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐩𝐨𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧
At least 1 in 10
Americans need MRI
scan each year
3,000
Private MRI facilities
$1k-7k at hospital
$500 at private
facility for scan of
extremity
$5.5B
per year
14
Better MRI helps to save the
self-insured employer
approximately 50% of the
total cost of scans
(extremities to outpatient /
more complex to hospital)

16. Risk Assessment
• Market Risk
• Geographic
distribution/scalability
• Rely on contracts with
imaging centers to limit
competitors
• Adoption by self-insured
companies
• Reimbursement for non-
MRI services
• Financial Risk
• Low initial capital will allow for
lower profits in early stages
• Technology Risk
• EMRs and payment models in
flux
Courtesy of Zen

17. Questions?