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
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