The document discusses the strategic evaluation of retail health clinics, focusing on their business philosophy, market assessment, and partnership opportunities. It highlights the importance of addressing primary care shortages, regulatory environments, and consumer needs for cost-effective healthcare solutions. Additionally, it covers investment considerations, marketing strategies, and measures for consumer satisfaction and return on investment.

1. Health System Operated Retail Health Clinics Elements to Consider for Alternative Treatment Centers Work Shop Facilitator John A. Corpus, FastCare, Bellin Health Work Shop Presenters Ken Berndt, FastCare, Bellin Health Bruce Shepard, Walmart December 7, 2009

2. Objectives Business philosophy and strategic fit Strategic assessment of the market Evaluate partnership, franchise, and co-branding opportunities Investment costs and timeframe Marketing strategies, brand recognition, and patient education Price transparency and insurance reimbursement Consumer satisfaction Measuring ROI

3. Business Philosophy/Strategic Fit Health System Perspective Access point in the access platform Two-way referral model Maintain continuity-of-care Maintain the medical home Retail Host Perspective Customer’s concern over cost of and access to the primary care health services – retail clinic low cost of care Convenience / one stop shop for customers Healthcare spend projected to surpass retail at >$4 billion in about 2017

4. Spending on healthcare in the US is going to surpass spending in retail in the US within the next decade! CAGR Healthcare = 6.7% CAGR Retail = 4.6% Why Play In Healthcare?

5. Strategic Assessment of the Market: PCP Shortage Health System Perspective Most markets are impacted by the PCP shortage Closed PCP practices PCPs retiring More graduates are specializing Rural practices are dwindling Increased utilization of mid-levels Retail Host Perspective Drives up cost of care – creates additional demand for higher costs of care such as ED which decreases consumer’s discretionary income Before moving forward with retails clinics, health systems should ensure buy-in of medical staff

6. Strategic Assessment of the Market: Competitive Environment Health System Perspective Independent, no health system connection Health System-based Retail Host Perspective Quicker time to market. Effectiveness and continuity of an integrated care system with electronic connectivity

7. Strategic Assessment of the Market: Regulatory Environment Health System Perspective Nurse practitioners Limitations by state Physician oversight Physicians Assistants Limitations by state Physician oversight Physicians No limitations Retail Host Perspective Tobacco and alcohol sold on premises Federal Anti-Kickback statutes / Steerage to pharmacy State requirements for licensing of retail clinics Some state level medical societies seeking increased supervision levels for mid-level practitioners

8. Evaluating a Partnership Model Health System Perspective Contract Length of term Ease of termination Pros Speed/turnkey Success factors Costs Visibility / Exposure of brand Cons Limitations Costs Retail Host Perspective Pros Sharing of financial risk – could be good or bad Cons Time to market if host does not partner with a national provider Complicates regulatory issues (license, physician supervision)

9. Evaluating a Franchise Model Health System Perspective Contract Length of term Ease of termination Pros Speed/turnkey Success factors Costs Cons Limitations Costs Retail Host Perspective Pros Brand control / consistency Centrality of patient data for convenience of patient and analysis Economies of scale / sharing successes Cons Lack of electronic integration into current healthcare system electronically Depending on Franchisor, possible no brand strength locally

10. Evaluating a Co-Branding Model Health System Perspective Contract Length of term Ease of termination Pros Image Brand awareness Cons Share marketing space Co-dependent Retail Host Perspective Pros Leverages brand of healthcare provider and host Allows for consistent look and feel while maintaining integration into local healthcare system Cons May not require electronic integration from provider to provider Host maintains brand risk if care is not top quality

11. Evaluating an Employer Clinic Health System Perspective Contract Length of term Ease of termination Pros Convenience Integration Cons Access Menu of services Retail Host Perspective Improve access and lower cost ERISA considerations – (Employee Retirement Income Security Act of 1974)

12. Investment – Partnership Health System Perspective $$$$$s Break-even Return on investment Risk Retail Host Perspective $$$$$s Capital Variance in rental rate Break-even Return on investment Risk

13. Investment – Franchise Health System Perspective $$$$$s Break-even Return on investment Risk Retail Host Perspective $$$$$s Break-even Return on investment Risk

14. Investment – Co-Branding Health System Perspective $$$$$s Break-even Return on investment Risk Retail Host Perspective $$$$$s Break-even Return on investment Risk

15. Investment – Employer Clinic Health System Perspective $$$$$s Break-even Return on investment Risk Retail Host Perspective $$$$$s Break-even Return on investment Risk

16. Timeline – Partnership Health System Perspective Contracting Construction Recruiting Marketing Operations Retail Host Perspective Same timeline for both parties Identifying space in store for clinic Time up front to vet potential partner Start up would be longer due to internal approval – higher risk than other models

17. Timeline – Franchise Health System Perspective Contracting Construction Recruiting Marketing Operations

18. Timeline – Co-Branding Health System Perspective Contracting Construction Recruiting Marketing Operations

19. Marketing Strategies Health System Perspective Leverage retailer and health system brands Mass market Physician referrals Employers Grassroots Overmarket vs undermarket Retail Host Perspective Must consider hosts solicitation policy Depending on model, anti-kickback may regulate what parties can/can not do Leverage relationship with store and regional management Market, market, market – do not assume location will provide success!

20. Brand Recognition Health System Perspective Building the brand Leverage the health system brand Retail Host Perspective Co-Branding leverages both brands Brand recognition is important to credibility of clinic Consistency of brand / look and feel important among numerous operators

21. Patient Education Health System Perspective Consumers are thirsty for health information Leverage health system resources Dietician Nutritionist Retail Host Perspective Key component of the model / convenient location for patient Could utilize products in store to make education visual Key component to decreasing cost of healthcare

22. Price Transparency Health System Perspective Transparency is important to the consumer Obama administration supports transparency Retail Host Perspective Very important to host – key to retail industry and expected by retail consumers! Improves credibility of host and provider – most healthcare consumers not use to transparency in price for health services

23. Insurance Reimbursement Health System Perspective Billing vs. not billing Billing with cash upfront Co-pays Deductibles Self-insured direct contracting Retail Host Perspective Accepting insurance upon opening seems to impact consumer adoption and satisfaction Host specific / model specific for requirements

24. Consumer Satisfaction Health System Perspective Satisfaction at 95-98% Usually better than primary care Must keep promise of Convenience Access No appointment Retail Host Perspective Provision of quality care / collection of data varies Convenience – provider maintain model integrity for quick visits Broad base of services

25. Measuring ROI Health System Perspective Break-even Downstream revenue New patients Primary care Health system Retail Host Perspective Variance between market rate rent and fair market value Consumer response Desire for increased sales and consumer traffic One stop shop for basic health services / products (channel agnostic)

26. Objectives Revisited Business philosophy and strategic fit Strategic assessment of the market Evaluate partnership, franchise, and co-branding opportunities Investment costs and timeframe Marketing strategies, brand recognition, and patient education Price transparency and insurance reimbursement Consumer satisfaction Measuring ROI

27. QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS QUESTIONS

28. THANK YOU Ken Berndt (920) 621-1615 [email_address] John A. Corpus (920) 217-0366 [email_address] Bruce Shepard (479) 204-6857 [email_address]