Disruption in Healthcare Food Chain 2019: Emerging Trends and Players

SOMA 2019 Mergers, Acquisitions and Delivery System Transformation Jacque J. Sokolov, MD 5665 North Scottsdale Road, Suite 110 Scottsdale, AZ 85250 Phone: (480) 427-3943 www.ssbsolutions.com V12 16:9 format January 2019

Disruption in the Healthcare Food Chain Who Will Be the Shark(s) in the Community Pool in 2019? CVS/Minute Clinics Safeway/Albertsons, etc. Walgreens, Others Kaiser Walmart HCA VA CCN, MDs Orgs, etc. Immunotherapy/Biologics Express Scripts Market Capitalization $ 250 B+ $ 50 Billion+ Apple Medical Clinics, etc. Google/Alphabet Oscar, etc. Microsoft Azure Blue, etc. Amazon Prescriptions, Cloud, etc. Facebook Hospital Data, etc. Uber Ambulances, Lyft Share, etc. Platform Companies Leidos/IBM Aetna Blue Cross Cigna Humana Anthem Government $ United Health/Optum Merck, Pfizer, J&J Cigna Market Capitalization $$- $ 250 Billion+ $100 Billion+ Market Capitalization $$$- $ 1 Trillion + $750 Billion + PROPRIETARY PROPRIETARY 2 Mergers, Acquisitions and Delivery System Transformation | JANUARY 2019 SOMA

Disruption in the Healthcare Food Chain Types of Healthcare Transactions Health Retailers New Vertical & Horizontal Integrators Healthcare Hybrid Entities Technology Invaders Employer Sponsored Initiatives PROPRIETARY PROPRIETARY 3 Mergers, Acquisitions and Delivery System Transformation | JANUARY 2019 SOMA

Disruption in the Healthcare Food Chain and Its Consequences Types of Healthcare Transactions 1. Vertical & Horizontal Integrators CVS Health and Aetna, Optum and DaVita Medical Group, and Cigna and Express Scripts. These hybrid organizations are trying to lower costs of the supply chain by owning more of it and extending those savings to consumers. The challenge? Execution risk is very high with poor history of success. 2. Employer Sponsored Initiatives JPMorgan/Berkshire Hathaway/Amazon, Blackstone, etc. Combinations such as this are setting out to limit the growth of their own healthcare costs. The challenge? Previous employer lead initiatives have had variable success and sustainability (e.g. SCE, Ford, Macy, Kaiser, etc.) and always require geographic and scope scale. 3. Technology Invaders Google, Apple, Amazon, Lyft and Uber live in this class. These deals will command more space in the healthcare industry, and they have an advantage in their understanding of modern consumer expectations and new currently non existent healthcare relevant technologic advances. The challenge? Technology invaders need technology that is applicable and actually provides real synergy in both the clinical and business facing applications. 4. Health Retailers Retailers including Walmart, CVS Health, Amazon and Rite Aid want to gain market share by functioning as healthcare providers directly or as referral conduits. The challenge? Scope of care, complexity of treatment, telehealth, tele monitoring, etc. complicate the patient/provider/payer relationships. Adapted from Becker s Hospital Review May 29, 2018 PROPRIETARY PROPRIETARY 4 Mergers, Acquisitions and Delivery System Transformation | JANUARY 2019 SOMA

Expenditures, Populations and Products VA Care Enabled by Advanced Platform Technology5 5 GlobalMed 5 PROPRIETARY PROPRIETARY 5 Mergers, Acquisitions and Delivery System Transformation | JANUARY 2019 SOMA

Conclusions and Critical Takeaways Multi-Layered and Indirect Effects of Big Tech Apple, Amazon, Google, Microsoft and Facebook pushing aggressively into healthcare and healthcare adjacencies delivery, insurance, distribution, pharma, device, platform development, etc. Birth of the Unicorn Physician Practice Management/Physician Group First Privately held $ 2- 3 Billion+ non-Mayo Clinic, non-Cleveland Clinic, PPM entities and their impact regionally and nationally. Optum/ Private Equity Organizations actively purchasing physician practices driving up prices repeatedly over the billion dollar mark. Destination Medical Center meets the Destination Super Consumer Experience The Destination Medical Centers similar to Mayo Rochester, Scottsdale and Florida development plans will become common with Medical Center, Medical School and Community Expenditures exceeding $ 10+ Billion over the next 10 years at certain institutions alone. Development of Directly Contracted Value Based Products The Federated Model BluePrime Health Plans, UnitedHealthcare NexusACO, AetnaCVS Whole Health Branded Products, etc. will drive an increasingly Federated Approach to Value Based Contracting with Providers on a continuum of reimbursement structures ranging from Shared Savings Upside Models to Percent of Premium/Capitation Models PROPRIETARY PROPRIETARY 6 Mergers, Acquisitions and Delivery System Transformation | JANUARY 2019 SOMA

Conclusions and Critical Takeaways Development of Adaptive Artificial Intelligence Adaptive artificial intelligence, expert systems and blockchain technology to enhance and support high performing, population-specific clinically integrated health plans/delivery systems. Early adopters already in the market largely for administrative function simplification registration, eligibility, payment, etc. VA Community Care Network Fourth largest transfer of public funds to the private sector in the history of US healthcare over the next 8 years through VA CCN program. Optum/United wins Regions 1, 2, & 3 with Region 4 still in play. Evolution of community healthcare resources now providing additional network capacity in response to VA programmatic and facility constraints. Increasing number of Veterans to be seen outside of traditional VA system. Next Generation Cancer Therapies RNA frame shift array technology enables a rich source of RNA Neo-epitopes that will enable diagnostic and prophylactic/therapeutic vaccines advances within the next 12-24 months. First, advances will be in dog studies. Over $ 5 Billion in Immunotherapy Oncologic Sector in 2018-2019. PROPRIETARY PROPRIETARY 7 Mergers, Acquisitions and Delivery System Transformation | JANUARY 2019 SOMA

5665 North Scottsdale Road, Suite 110 Scottsdale, AZ 85250 Phone: (480) 427-3943 www.ssbsolutions.com

SSB 2019 Umbrella SSB SSB Financial Services/HCDG SSB Governmental Services SSB Equity/Governance Participation SSB Solutions, Inc. Veterans Accountable Care Group (VACG) Veterans Accountable Care Organization (VACO) Intrepid Health Alliance Intrepid Clinical Care Payers Providers Pharmaceutical Companies Device Companies Biologics/Cancer Vaccines Large ERISA Employers VA, DOD, NSA Healthcare IT Companies/Platforms Block Chain Healthcare Applications NMTCs/CDE Partners in Care* Humana* MedCath* Hospira* Zoonie/Summit Med Group MyHealthDirect GlobalMed Calviri AKOS Universal Health Coin/Exchange Equality Health NeuLife Rehab Paraffin International Trill Project/Logical Non- Sense** Women Centered** Phoenix Children's Hospital Martin Luther King Medical Center Critical Access Hospital Cuyuna Mayo Clinic Destination Medical Center Rochester Area Foundation *Liquidated **AIKS/MRK Holdings PROPRIETARY PROPRIETARY 9 2019 The Next Generation of Health Care Innovation | JANUARY 2019