Significant Q3 Transactions

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September 3, 2012 - Valeant Pharmaceuticals International, Inc. (TSX:VRX) entered into a definitive agreement to acquire Medicis Pharmaceutical Corp. (NYSE:MRX), a specialty pharmaceutical company, for $2.5 billion.

August 22, 2012 - Health Care REIT, Inc.

(NYSE:HCN) entered into a definitive merger agreement to acquire Sunrise Senior Living, Inc. (NYSE:SRZ) for $860 million. Sunrise Senior Living, Inc. provides senior living services in the U.S., Canada, and the U.K.

August 22, 2012 - Roper Industries, Inc.

(NYSE:ROP) completed the acquisition of Sunquest Information Systems, Inc. for $1.4 billion. Sunquest Information Systems, Inc. provides healthcare information systems.

August 20, 2012 - Aetna Inc. (NYSE:AET)

entered into a definitive agreement to acquire Coventry Health Care, Inc. (NYSE:CVH) for $5.7 billion. Coventry Health Care, Inc. operates as a managed healthcare company.

August 17, 2012 - One Equity Partners entered

into a definitive purchase agreement to acquire MModal, Inc. (NasdaqGS:MODL) for $800 million. MModal, Inc. provides clinical documentation solutions.

August 17, 2012 - Church & Dwight Co., Inc.

(NYSE:CHD) entered into a stock purchase agreement to acquire Avid Health, Inc. for $650 million. The deal was subsequently completed on October 1, 2012. Avid Health, Inc. offers nutritional supplements.

August 13, 2012 - Vitalize Consulting

Solutions, Inc. completed the acquisition of maxIT Healthcare, LLC for $493 million. maxIT Healthcare, LLC provides clinical IT implementation services.

July 9, 2012 – WellPoint, Inc. (NYSE:WLP)

signed a definitive agreement to acquire AMERIGROUP Corp. (NYSE:AGP) for $4.5 billion. AMERIGROUP Corp. is a multi-state managed healthcare company.

For additional information, contact

the NCA Healthcare investment banking team:

Edward R. Casas, MD Senior Managing Director Head of Navigant Capital Advisors 847/583-1619

[email protected] Gregory Hagood Managing Director

Investment Banking Practice Area Leader 404/504-2017 [email protected] Michael Lane Managing Director 312/583-2132 [email protected] Matthew M. Caine, CFA Managing Director 404/504-2010 [email protected] Kim Brady Managing Director 847/583-1718 [email protected] Neil Luria Managing Director 216/321-5606 [email protected] Jerry Chang

Director, Valuation Services 404/602-3462

[email protected]

The NCA Healthcare Services Quarterly Dialogue contains news, statistics, and trends impacting select companies within the Healthcare Services sector. Analysis is further organized to include: (i) Alternate Site, (ii) Diagnostic Services, (iii) Distribution, (iv) Equipment & Supplies, (v) Information Technology, (vi) Hospital Providers, (vii) Long-Term Care & Senior Living, and (viii) Managed Care companies.

Significant Q3 Transactions

September 28, 2012 - TPG Capital, LP

completed the acquisition of Par

Pharmaceutical Companies, Inc. (NYSE:PRX) for $1.9 billion. Par Pharmaceutical

Companies, Inc. engages in developing, licensing, manufacturing, marketing, and distributing generic and branded products.

September 17, 2012 - Formation Capital, LLC

and SAFANAD Ltd. acquired a skilled nursing portfolio comprising 68 facilities located along the East Coast for $750 million. Formation Capital, LLC provides lending services to the senior housing industry.

September 13, 2012 - Thermo Fisher

Scientific, Inc. (NYSE:TMO) signed a

definitive agreement to acquire One Lambda, Inc. for $890 million. One Lambda, Inc. provides Human Leukocyte Antigens (HLA) products.

Healthcare Services

R ES T R U C T U R I N G • M E R G E R S , A C Q U I SI T I O N S & D I V E ST I T U R E S • P R I V A T E PL A C EM E N T S • VA L U A T I O N

Realizing Value … Delivering Results

Atlanta • Chicago• New York

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September 30, 2012

To The Friends and Clients of Navigant Capital Advisors (“NCA”):

We are pleased to share with compliments our Healthcare Services Quarterly Dialogue for Q3 2012.

The M&A market in the healthcare industry generated 152 transactions worth a combined total of $28.3 billion during the third quarter of 2012, according to preliminary figures from Irving Levin Associates, Inc. Third quarter deal totals and dollar volume were down from the prior quarter by 50 deals and approximately $12.2 billion, respectively. The drop from the prior quarter is primarily due to lower deal volume in the Behavior Health, Biotechnology, and Hospital sectors as compared to the robust deal activity in these sectors in the second quarter of 2012. Pharmaceuticals, Managed Care, and Home Healthcare were the most active sectors during the third quarter of 2012, accounting for almost 71% of the quarter’s volume.

For the trailing three months ended September 30, 2012, the S&P Healthcare Index (+5.6%) outperformed most major equity market indices. Within the NCA Healthcare Services Universe, Long-Term Care (+29.8%) and Hospital Providers (+9.4%) outperformed the other sectors in the industry, while the Information Technology (-2.9%) and Distributors (-0.2%) sectors lagged behind as the bottom performers.

A few of the more notable transactions in the overall healthcare sector announced during the quarter include:

• WellPoint Inc.'s (NYSE:WLP) agreement to acquire AMERIGROUP Corp. (NYSE:AGP) for $4.5 billion

• Valeant Pharmaceuticals International, Inc.'s (TSX:VRX) agreement to acquire Medicis Pharmaceutical Corp. (NYSE:MRX) for $2.5 billion

• TPG Capital, LP's acquisition of Par Pharmaceutical Companies, Inc. (NYSE:PRX) for $1.9 billion

• Roper Industries Inc.'s (NYSE:ROP) acquisition of Sunquest Information Systems, Inc. for $1.4 billion

• Thermo Fisher Scientific, Inc.'s (NYSE:TMO) agreement to acquire One Lambda, Inc. for $890 million

• Health Care REIT, Inc.'s (NYSE:HCN) agreement to acquire Sunrise Senior Living, Inc. (NYSE:SRZ) for $860 million With the Presidential election around the corner and an uncertain fate of the Affordable Care Act in whole or in parts, we do not anticipate a slowdown in near term M&A activity. Larger sized organizations, along with their ability to realize economies of scale, will be far better positioned to meet the demands of healthcare delivery in the future. We have witnessed healthcare systems continuing to evolve beyond facility based providers to include physician practices and managed care plans. We expect this trend to continue which will put further pressure on independent hospitals and small healthcare systems to consolidate or affiliate now or risk financial distress in the future.

We continue to work closely with our extensive Navigant National Healthcare Practice to provide investment banking services to a wide array of healthcare firms and investors. The industry leading Healthcare Practice provides a great resource for our clients. We welcome your comments and hope that you continue to find our Healthcare Services Quarterly Dialogue informative.

Matt Caine, CFA Michael Lane Edward R. Casas, MD

Managing Director Managing Director Senior Managing Director

Navigant Capital Advisors Navigant Capital Advisors Head of Navigant Capital Advisors

[email protected] [email protected] [email protected] (404) 504-2010 (312) 583-2132 (847) 583-1619

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and does not provide audit, attest, or public accounting services. See www.navigant.com/licensing for a complete listing of private investigator licenses.

I N V E S T M E N T B A N K I NG • R E S T R U C T U R I NG • V A L U A T I O N & F I N A N C I A L R I S K M A N A G E M E N T www.ncacf.com | 847.583.1618 | Atlanta • Chicago • New York • San Francisco

$32,000,000

has been acquired by

Sell Side Advisor Sell Side Advisor

$76,250,000

Sell Side Advisor

$83,800,000

St. David’s Healthcare Partnership, L.P.

MedCath Corporation (Nasdaq: MDTH)

Sale of Assets on behalf of

$86,400,000

Sell Side Advisor $830,000,000

Steward Health Care System LLC

Sell Side Advisor

$25,000,000

Sell Side Advisor

MedCath Partners Division $5,000,000

Sell Side Advisor

$119,000,000

AR-MED, LLC Sell Side Advisor

Sell Side Advisor

Sell Side Advisor $31,000,000 $690,600,000

$38,100,000 $156,000,000

Sell Side Advisor

Sell Side Advisor Not Disclosed

Not Disclosed

$206,900,000

$62,600,000

To access and subscribe to Navigant’s proprietary Healthcare Services Quarterly Dialogue that tracks industry trends, metrics and news, go to: www.ncacf.com/dialogues

Steward Health Care System LLC

Steward Health Care System LLC $38,000,000

An equity interest in

has acquired MedCath’s equity interest and

secured loan in

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Navigant Healthcare

Navigant Healthcare assists health systems, physician practice groups and payers in designing, developing and implementing solutions that create high-performing healthcare organizations. Our experienced healthcare team of more than 500 healthcare consultants helps

organizations with strategic advisory, operational improvement, and outsourcing and technology solutions. Specific services include revenue cycle management, supply chain improvement, facilities planning, physician-hospital alignment, care innovation and clinical documentation improvement.

What We Do

Strategic Advisory

Navigant provides healthcare executives objective, practical, results-oriented assistance to set strategic directions that enable long term growth through the ever changing industry.

Our services include:

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Dispute, Investigation and Compliance Advisory

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Financial Advisory, including M&A, Business Valuation, Due Diligence and Restructuring and Bankruptcy Advisory

Operations Management & Implementation Navigant has extensive experience, and a successful record, helping healthcare organizations implement solutions to improve financial, operational and quality performance.

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Revenue Cycle: Capture, Collection Acceleration, Payer Contract Improvement

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Outsourcing and Technology Solutions Navigant provides outsourcing and technology solutions to improve efficiency and help clients make more informed decisions based on better information management.

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For additional information, please visit the Navigant Healthcare website at: http://www.navigant.com/healthcare

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HEALTHCARE SERVICES

QUARTERLY DIALOGUE

Third Quarter 2012

Navigant’s Perspective:

1 The Massachusetts Story:

How Change May Unfold in Other Markets

Market Summary

6 Healthcare Industry Stock Market Value Index

8 NCA Healthcare Services Universe –

9 Public Company Equity Market Value Analysis

Alternate Site

12 Diagnostic Services

15 Healthcare Distributors

18 Healthcare Equipment and Supplies

21 Healthcare Information Technology

24 Hospital Providers

27 Long-Term Care / Senior Living

30 Managed Care

33 Healthcare Industry Transactions

36 Distressed Market Indicators

40 Notes / Subscription Form

43

©2012 Navigant Capital Advisors, LLC. All rights reserved. Navigant Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned broker/dealer of Navigant Consulting, Inc. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See www.navigant.com/licensing for a complete listing of private investigator licenses.

NCA gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. NCA makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. (Officers, directors and employees of Navigant Consulting, Inc. and its subsidiaries may have positions in the securities of the companies discussed.) This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. NCA or its affiliates may from time to time provide investment banking or related services to these companies. Like all NCA employees, the authors of this publication receive compensation that is affected by overall firm profitability.

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Navigant’s Perspective

The Massachusetts Story:

How Change May Unfold in Other Markets

The multitude of complex regulatory, economic and care delivery factors that led to the Accountable Care Act (ACA) are largely the same factors that led to the sweeping healthcare reform implemented in the state of Massachusetts in 2006. Of course, in the last six years healthcare has become even more volatile with growing levels of uncompensated care, proliferation of new science and technology and the associated escalation of healthcare costs. Still, there is much to be learned from the Massachusetts experience that can serve as a predictive framework of how change might unfold throughout the country. Specifically, the conditions that led to the Massachusetts law, the most effective responses, surprises and other lessons learned can help inform other states, commercial payers, physician groups, health system providers and other industry players as they plan for the impact of reform on their core strategies.

So what were the conditions that led to the Massachusetts law in the first place? As a state that enjoys a tradition of direct engagement with healthcare, Massachusetts had considered many models over many years that could address the issues of:

Growing levels of uninsured and uncompensated care

Constrained access to primary care and preventive care services

A need to reduce overall state healthcare costs

Through the Commonwealth Health Insurance Connector and other reform initiatives, Massachusetts succeeded in providing coverage to more than 95 percent of state residents, and increased access to a broad range of healthcare services, including primary care and preventive services. These successes built upon the state’s long history of reform efforts across public and private sector groups. While much progress was made on the access front, Massachusetts was largely unsuccessful at containing costs through these initiatives. In fact, the Massachusetts experience showed that when access increases, costs go up. Healthcare spending in Massachusetts is 15 percent higher than the national average, although premium growth has slowed somewhat. This gap has continued to widen, an issue that the state ultimately will need to address under the ACA through provider payment reform and other significant cost reduction initiatives. (In August, Massachusetts Gov. Deval Patrick signed into law a bill that state lawmakers say could save Massachusetts as much as $200 billion over the next 15 years by pegging healthcare spending at or below the state’s overall rate of growth.)

LESSONS FROM MASSACHUSETTS

The state’s inability to deal with fundamental financial and cost of care issues in the early years of reform offers many important lessons for the healthcare industry under the ACA. These lessons fall into the following general categories:

Size is not the only predictor of contract quality. Through the early days of reform, Blue Cross Blue Shield of

Massachusetts plans sustained preferential rate structures with several “quality” providers in the Boston market. Some estimates put these payment differentials as high as 30 percent. The focus of payers and employers was to access “must-have” providers, not to enhance their value. It was not until large employers in the marketplace put pressure on the Blues that payment levels began to level out across the provider community, making cost reduction possible. The next step in achieving significant and lasting cost reductions is in the adoption of significantly different payment methodologies, including innovative cost-sharing and risk-bearing arrangements. Massachusetts’ Blue Cross’ Alternative Quality

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Product, implemented in 2009, has shown early signs of success in slowing cost-of-care increases while maintaining quality.

Proliferation of academic medicine entrenched in quaternary care may provide additional hurdles to meaningful progress toward cost containment. Massachusetts has a plethora of academic medical centers. This concentration brings significant barriers to cost reduction. While academic providers may have supported the concept of cost reduction, they had fundamental cultural and cost structure issues that limited their ability to make meaningful progress in the early days of the Massachusetts law. On one hand, these centers can accurately be described as job creators that generate economic development. On the other hand, a large percentage of care may be provided in a less-costly setting, leading to healthcare being too expensive and posing a barrier to economic development. It remains to be seen what role the academic medical center of the future can and will play in healthcare cost reduction. Successful academic medical centers will be those that embrace opportunities to increase efficiencies in the delivery of complex care, while also deploying their teaching, research and clinical missions toward population health management initiatives. These changes may require a fundamental shift in academic culture, faculty incentives and new models for approaching the marketplace (e.g., new roles for community-based providers affiliated with the academic medical center.)

Some level of provider consolidation must occur before real cost containment and value creation can be achieved. It is difficult, if not impossible, for freestanding community hospitals and physician practices to have the assets required to thrive under a reform scenario in a timely manner. Specifically, hospitals and physician groups need to be part of something bigger than a single, stand-alone structure to ensure access to capital, managed care contracting and

infrastructure, and fixed cost leverage across multiple sites. In addition, the leadership requirements for succeeding are quite different than the leadership requirements of the past. Future leaders should not be afraid to make the jump to “curve 2” care delivery and the corresponding reallocation of capital, physician incentives and operational priorities. In the future, this leadership will be concentrated in large, complex organizations that will be sufficiently capitalized to move nimbly in executing core strategies. Despite several recent hospital mergers, Boston still is ranked as one of the nation’s 19 least-concentrated health system markets, according to a Navigant estimate of the Herfindahl-Hirschman Index (HHI) used by the U.S. Department of Justice and Federal Trade Commission.

Taxable/private equity participation in the provider market can instigate change. One only has to look at the entry of the private equity firm, Cerberus Capital Management, into the Boston market to see the impact a new, well-capitalized player can have on the pace and nature of market consolidation. In a market previously dominated by large academic players, Cerberus’ acquisition of Caritas Christi Health Care and the resulting formation of Steward Health Care System significantly changed the landscape of Boston healthcare. Cerberus’ desire for a “big platform” deal led it to invest more than $800 million in the formation of Steward Health Care System – $400 million in acquisition costs and another $400 million in committed capital for information technology investments, physician development and other strategic and operational initiatives. These investments raised the bar in the market for cost containment and other reform-friendly activities.

IS YOUR STATE THE NEXT MASSACHUSETTS?

So how do these lessons help predict the future for other states as providers and payers prepare for national healthcare reform? The following conditions suggest a predisposition and perhaps a predictor of where early stages of change may be implemented most successfully. Interestingly enough, many of these conditions are the very same criteria that taxable providers use when evaluating desirability of market entry – a market where they can have a fundamental positive financially accretive outcome.

A political climate “friendly” to taxable providers: Massachusetts is a good example of what can happen when taxable providers become a significant component of the healthcare landscape. With their focus on shareholder value, for-profits can reset the bar in terms of cost of care delivery.

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High unemployment: High statewide unemployment means more people will gain access/coverage in the future. This will encourage providers and payers to work together toward the common goal of providing the best possible care under the highest value delivery model.

Exchange progress/experience with Pioneer ACOs: National healthcare reform is likely to unfold most constructively in those states that already have made significant progress on commercial exchange initiatives. Specifically, progress in state exchanges increases the likelihood of people gaining commercial rather than Medicaid coverage, a desired outcome for key stakeholders. To become a Pioneer Accountable Care Organization, the Centers of Medicare & Medicaid Services must be convinced that the ACO has the infrastructure to successfully manage a medical expense budget. With this criteria, it is not surprising that Massachusetts, with the first phase of reform behind it, has six of the 32 Pioneer ACOs nationwide.

A moderately concentrated commercial payer market: A commercial payer market that is not overly concentrated may enhance the ability of employers and providers to negotiate innovative value or budget-based payment programs with multiple commercial payers.

A moderately consolidated provider market, particularly those with many small to mid-sized Integrated Delivery Networks (IDNs): Provider consolidation will be essential under reform, as the cost of building the infrastructure needed to succeed will most certainly need to be spread over a larger organizational base. Both individual hospitals and small to mid-size IDNs will be especially pressured to consolidate.

Market experience with capitation: States with an existing risk-based presence and, specifically, those with high Medicaid HMO enrollment or a high Medicare Advantage population, will be more likely to be early adopters of the types of risk contracting approaches required. Given this experience, it is likely that the infrastructure required to manage care is farther along in these markets.

High inpatient utilization rates: Markets with above-average utilization rates may have more upside potential to control costs/utilization through accountable care approaches. The exception to this may be in a state that derives these high utilization rates from a high concentration of academic and other quaternary providers.

An adequate supply of physician providers: Access to physician and other non-physician providers is essential as the number of insured increases. This need for sufficient providers is particularly acute in the primary and preventive care specialties.

Using these criteria and the lessons learned in the Massachusetts experience, Navigant completed a high level “ranking” of how states might be expected to perform under national healthcare reform. Navigant scored 140 MSAs in this analysis, with 49 markets scoring in the top quartile of “readiness for reform.” The top quartile markets are located in 20 states and the District of Columbia, with only 10 of these markets west of the Mississippi River. Examples of high, medium and low “readiness” scores from this analysis are as follows:

"HIGH" READINESS

Markets that scored the highest in their readiness for reform included large urban markets such as Philadelphia, Detroit and Atlanta. These three markets’ moderately concentrated provider communities, combined with the markets’

experience with capitation, are the two most consistent criteria that led to these states’ high scoring.

In the Philadelphia market, payers are proactively approaching the need to reduce costs. Examples include the growth of consumer-driven health plans that have enabled employers to shift rising healthcare costs to employees, and

Independence Blue Cross, the market’s largest insurer, which is implementing a number of coordination of care and payment reform initiatives. Additionally, a Philadelphia-area physician group is among 32 Pioneer ACOs selected by CMS to manage care under its new payment initiative. Philadelphia hospitals and health systems are responding to the need to reduce costs by shifting more care to the outpatient setting and forming new community-based partnerships.

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In Detroit, unemployment remains high, although the economy is beginning to rebound as the automotive industry stabilizes. The provider market is only moderately consolidated with pressure for greater consolidation, leading to new models for health system collaboration. In fact, many Detroit area health systems have formed ACOs and are negotiating alliances in specialty areas. Taxable dollars are present in the market with Vanguard Health Systems’ acquisition of Detroit Medical Center in 2011.

In Atlanta, both Emory Healthcare and Piedmont Healthcare have made key acquisitions that have provided them with critical mass to build infrastructure required. Additionally, three of the market’s top four health plans are forming patient-centered medical homes and multiple forms of ACOs. These are just a few examples of the types of market activities that might suggest a market’s “high readiness” for national healthcare reform.

“MEDIUM” READINESS

Markets as diverse as Albuquerque, N.M., and Louisville, Ky., scored in the middle of the pack in terms of readiness. In Albuquerque, the large and growing Medicaid market has led to significantly reduced payments to hospitals and physicians. As a result, providers are looking for new ways to attract insured patients, including service expansion into suburban areas. In 2011, New Mexico Gov. Susana Martinez vetoed a bill that would have created a state health insurance exchange initiative and pushed for repeal of Federal healthcare reform legislation. With national reform still moving forward, the Albuquerque market will be forced to explore new models for cost-effective care delivery for its diverse and challenging payer mix.

In the Louisville market, significant provider consolidation has proven difficult, with Kentucky Gov. Steve Beshear rejecting the three-way merger of University of Louisville Hospital, Jewish Hospital & St. Mary’s and Saint Joseph Health System in Lexington. That said, significant opportunities exist as the Louisville physician sector continues its alignment with these large area health systems, which are looking to tap into the infrastructure required to take on new payment methodologies.

“LOW” READINESS

Lastly, examples of markets that scored at the low end of the “readiness for reform” analytic include Raleigh, N.C., Baton Rouge, La., and Omaha, Neb. The Raleigh market has seen turmoil in the payer market, exemplified by Aetna’s contract termination with UNC Health Care in 2011. Employers were not willing to be without UNC and switched to other payers, leading to new product and network offerings. These changes have taken the focus off of true managed care cost savings, and, as a result, providers and payers have some catch-up to do to prepare.

Hospitals and health systems in the Omaha market, while highly consolidated, have not had the reputation of being early adopters of healthcare reform initiatives. Providers have only moderate use of disease management and utilization management programs, although that may be changing with the formation of a market-wide Accountable Care Alliance. That said, economic pressures for healthcare reform are not as strong as in other mid-sized markets, given the relative strength of the local economy.

The Baton Rouge healthcare market faces significant challenges, as the state closed Louisiana State University’s Earl K. Long Medical Center, the market’s safety-net provider, and transferred care to the market’s largest healthcare system, the Franciscan Missionaries of our Lady Health System and its Our Lady of the Lake Regional Medical Center. This has led to major hospital construction initiatives and the need to grow and reorganize the physician community away from small groups and solo practices into larger entities that can more proactively manage the health needs of the region.

These examples show that there will not be a “one-size fits all” strategy for a market to prepare for national healthcare reform.

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So what are the implications of the key learnings from Massachusetts and the predictors for which states will be next? The implications can be summarized as follows:

Some states and markets will move faster than Federal healthcare reform.

Increased access will increase total costs. Those organizations that focus intensely on lowering per-member cost early on will increase their likelihood of success.

The pace and level of market consolidation will escalate and new organizational models/legal structures for IDNs will emerge. Partners HealthCare and Steward Health Care System in Boston are good examples of this evolution. Both have developed a variety of wholly-owned and contractual participation models.

Continued growth is expected in physician employment, with compensation programs that include risk pools and mirror the value and budget-based payment systems adopted under reform.

Antitrust and state attorney general activities will evolve as they wrestle with the conflict inherent in balancing pro-competitive behavior with the need for market consolidation to access capital required for infrastructure.

There will be a premium on management’s ability to manage through the conversion from fee-for-service to value and budget-based compensation.

Providers and other market participants can and should use these Massachusetts lessons and market-specific predictors to refine

organizational strategy and operational

priorities. At a minimum, organizations should evaluate the readiness of their current structures (e.g., simpler, less complex corporate structures will be preferred) and incentives (e.g., are we incentivizing the “right” behaviors?) under their predicted reform scenario. Additionally,

organizations should prepare to collaborate, both horizontally and vertically, with a variety of other market participants that can align around common goals. Whether a market is earlier or later in its stage of reform impact, reform is coming and proactive planning will heighten the probability of organizational success.

― David Burik, Managing Director, Navigant Healthcare

― Lisa Rolfe, Managing Director, Navigant Healthcare

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Market Summary

Major Equity Market Indices

Index 9/30/2012 3 Months Ago 1 Year Ago 2 Years Ago 3 Months Ago 1 Year Ago 2 Years Ago

Dow Jones Industrial 13,437.13 12,880.09 10,913.38 10,788.05 4.3% 23.1% 24.6% NASDAQ Composite 3,116.23 2,935.05 2,415.40 2,368.62 6.2% 29.0% 31.6% Russell 2000 837.45 798.49 644.16 676.14 4.9% 30.0% 23.9% S&P 500 1,440.67 1,362.16 1,131.42 1,141.20 5.8% 27.3% 26.2% Wilshire 5000 14,997.78 14,208.64 11,771.86 11,947.14 5.6% 27.4% 25.5%

S&P Healthcare Index 465.29 440.76 367.73 353.75 5.6% 26.5% 31.5% % Change From

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Market Summary (cont.)

Benchmark Interest Rates

Average Bid Prices

Interest Rate 9/30/2012 1-Year Ago

Prime Rate 3.25% 3.25% 1-Month Libor 0.21% 0.24% 3-Month Libor 0.36% 0.37% 6-Month Libor 0.64% 0.56% 12-Month Libor 0.97% 0.86% 2-Year Treasury 0.23% 0.25% 10-Year Treasury 1.64% 1.93% 30-Year Treasury 2.83% 2.92%

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Healthcare Industry Stock Market Value Index

S&P Healthcare Index vs. the Dow Jones Industrial Average during the last 12 months

S&P Healthcare Index vs. the Nasdaq Composite during the last 12 months

S&P Healthcare Index vs. the S&P 500 during the last 12 months

70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 180.0 190.0 Relative Performance (%)

Dow Jones Industrial Average (^DJI) S&P Healthcare Index (^HCX)

NASDAQ Composite (^COMP) S&P Healthcare Index (^HCX)

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NCA Healthcare Services Universe –

Public Company Equity Market Value Analysis

Market Capitalizations % Change

Segments/Companies Ticker as of 9/30/2012 ($mm) 3-Month 6-Month 12-Month

Alternate Site:

Ame disys Inc. AMED 423.4 12.9% -2.4% -2.4% AmSurg Corp. AMSG 896.2 -5.5% 1.7% 27.3% DaVita Inc. DVA 9,801.5 6.1% 16.0% 67.5% Fre senius Medical Care AG & Co. KGAA DB:FME 17,462.4 3.0% 8.1% 13.3% Ge ntiva He alth Se rvice s Inc. NasdaqGS:GTIV 346.0 64.0% 28.1% 104.8% IPC The Hospitalist Company, Inc. IPCM 760.6 1.3% 24.7% 29.8%

Diagnostic Services:

Alliance He althcare Se rvices, Inc. AIQ 72.5 41.3% -5.9% 24.3% Bio-Re fe re nce Laboratorie s Inc. BRLI 791.6 8.8% 21.2% 53.8% Laboratory Corp. of Ame rica Holdings LH 8,867.9 -1.1% -0.3% 10.8% Que st Diagnostics Inc. DGX 10,069.6 6.0% 3.6% 28.9% RadNe t, Inc. RDNT 106.6 4.8% -10.4% 16.7%

Healthcare Distributors:

Ame risourceBe rge n Corporation ABC 9,740.9 -1.3% -4.7% -2.9% Cardinal He alth, Inc. CAH 13,270.1 -8.7% -11.0% -8.2% He nry Sche in, Inc. HSIC 7,013.3 -0.6% 2.7% 22.4% McKesson Corporation MCK 20,303.9 -8.3% -6.0% 13.4% Omnicare Inc. OCR 3,789.3 7.4% -6.2% 28.7% Owe ns & Minor Inc. OMI 1,897.5 -2.5% -1.8% 4.5% PSS World Me dical Inc. PSSI 1,145.4 8.2% -11.9% 9.1% Ste ricycle, Inc. SRCL 7,750.1 -0.6% 9.3% 11.5% The rmo Fishe r Scie ntific, Inc. TMO 21,505.4 12.8% 4.3% 11.2%

Healthcare Equipment and Supplies:

Abbott Laboratorie s ABT 107,593.5 6.1% 11.6% 35.2% Baxter Inte rnational Inc. BAX 32,981.6 11.5% -0.8% 3.4% Becton, Dickinson and Company BDX 15,677.0 3.5% -3.9% -1.7% Boston Scie ntific Corporation BSX 8,145.0 0.5% -5.0% -10.0% CardioNet, Inc. BEAT 62.8 24.0% -16.2% -14.2% Johnson & Johnson JNJ 189,987.7 2.4% 4.9% 8.9% Me dtronic, Inc. MDT 43,988.4 10.8% 7.9% 25.3% Sie mens AG SIE 68,647.5 15.5% 3.5% 15.6% St. Jude Me dical Inc. STJ 13,227.6 5.7% -4.8% 10.9%

(15)

NCA Healthcare Services Universe –

Public Company Equity Market Value Analysis

(cont.)

Market Capitalizations % Change

Segments/Companies Ticker as of 9/30/2012 ($mm) 3-Month 6-Month 12-Month

Healthcare Information Technology:

Allscripts He althcare Solutions, Inc. MDRX 2,127.4 2.0% -32.7% -37.2% athe nahealth, Inc. ATHN 3,303.6 16.4% 25.7% 58.6% Cerne r Corporation CERN 13,247.2 -6.0% 2.5% 14.4% Compute r Programs & Syste ms Inc. CPSI 614.7 -2.9% -1.7% -16.0% HMS Holdings Corp. HMSY 2,882.8 0.7% 7.4% 39.5% icad Inc. ICAD 23.2 -6.4% -12.1% -9.6% Me dAssets, Inc. MDAS 1,041.1 32.7% 36.8% 84.0% Omnice ll Inc. OMCL 462.9 -5.8% -9.1% 1.4% Quality Systems Inc. QSII 1,099.6 -32.6% -57.4% -61.3% We bMD He alth Corp. WBMD 688.7 -39.9% -51.7% -60.8%

Hospital Providers:

Community Health Syste ms, Inc. CYH 2,598.2 4.0% 32.2% 73.5% HCA Holdings, Inc. HCA 14,651.7 9.7% 35.1% 66.5% Health Manageme nt Associate s Inc. HMA 2,150.8 6.9% 25.8% 22.3% Life point Hospitals Inc. LPNT 2,091.3 4.6% 10.1% 9.8% Te net He althcare Corp. THC 2,613.0 20.5% 20.0% 37.6% Universal He alth Se rvices Inc. UHS 4,429.7 6.0% 9.3% 33.2% Vanguard Health Syste ms Inc. VHS 952.7 39.2% 25.6% 21.8%

Long-Term Care / Senior Living:

Advocat Inc. AVCA 34.6 -10.2% 14.7% -1.3% Brookdale Se nior Living Inc. BKD 2,843.8 32.3% 25.4% 85.9% Capital Se nior Living Corp. CSU 396.2 36.8% 58.4% 137.7% Eme ritus Corp. ESC 943.6 24.5% 18.7% 51.1% The Ensign Group, Inc. ENSG 656.8 8.9% 14.0% 35.5% Kindred He althcare Inc. KND 602.7 15.9% 33.9% 34.2% Skille d He althcare Group, Inc. SKH 247.8 2.5% -14.9% 80.5% Sun He althcare Group, Inc. SUNH 216.2 1.1% 25.6% 218.5% Sunrise Senior Living Inc. SRZ 812.8 95.7% 125.8% 204.6%

Managed Care:

Aetna Inc. AET 13,237.2 -1.7% -24.7% -2.3% Cigna Corp. CI 13,602.1 7.2% -3.9% 20.0% Cove ntry He alth Care Inc. CVH 5,580.2 22.9% 10.5% 30.4% Express Scripts Holding Company ESRX 50,777.3 12.9% 93.3% 180.6% Health Ne t, Inc. HNT 1,834.3 -9.3% -44.3% -13.2% Humana Inc. HUM 11,344.1 -10.2% -25.2% -6.5% Unite dHealth Group Incorporate d UNH 57,222.2 -5.7% -7.1% 15.3% We llPoint Inc. WLP 18,864.1 -10.6% -23.6% -19.9%

(16)

NCA Healthcare Services Universe –

Public Company Equity Market Value Analysis

(cont.)

70.0 90.0 110.0 130.0 150.0 170.0 190.0 Relative Performance (%) Alternate Site Diagnostic Services Distributors Equipment & Supplies Information Technology Hospital Providers Long-Term Care / Senior Living Managed Care S&P 500 Index (^SPX) -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

3-Month Return 6-Month Return 12-Month Return

NCA Healthcare Services Universe - Index Returns

Alternate Site

Diagnostic Services

Distributors

Equipment & Supplies

Information Technology

Hospital Providers

Long-Term Care / Senior Living Managed Care

(17)

Alternate Site

Valuation Metrics 70 90 110 130 150 170 190

Relative Price Chart

Alternate Site NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Recent Shares Market Enterprise Last Twelve Months

Stock Price Outstanding 52-Week 52-Week Capitalization Value EV/ EV/ EV/

Company Ticker (9/28/2012) (mm) High Low ($mm) ($mm) Revenue EBITDA EBIT

Alternate Site

Amedisys Inc. AMED $13.82 30.6 $15.95 $9.12 $423.4 $516.0 0.35x 4.7x 7.4x

AmSurg Corp. AMSG 28.38 31.6 32.17 21.31 896.2 1,585.9 1.80x 5.3x 5.9x

DaVita Inc. DVA 103.61 94.6 103.97 59.14 9,801.5 14,692.7 1.94x 9.2x 11.2x

Fresenius Medical Care AG & Co. KGAA DB:FME 57.23 306.0 60.24 48.02 17,462.4 24,477.5 1.83x 9.0x 11.4x Gentiva Health Services Inc. GTIV 11.32 30.6 12.85 2.81 346.0 1,130.4 0.64x 6.3x 7.6x IPC The Hospitalist Company, Inc. IPCM 45.70 16.6 48.42 29.70 760.6 751.9 1.53x 14.2x 15.2x

High 1.94x 14.2x 15.2x

Low 0.35x 4.7x 5.9x

Mean 1.35x 8.1x 9.8x

(18)

Alternate Site (cont.)

Third Quarter 2012 News

September 7, 2012 - HealthCare Partners, LLC acquired ABQ Health Partners, LLC for

approximately $140 million. ABQ Health Partners, LLC operates as a multi-specialty medical group in New Mexico.

August 31, 2012 - TK Behavioral, LLC completed the acquisition of Timberline Knolls for

approximately $68 million. Timberline Knolls, LLC operates as a residential treatment center to treat women and adolescent girls with eating disorders, substance abuse, trauma, mood and co-occurring disorders.

July 16, 2012 - Correct Care Solutions, LLC completed the acquisition of Conmed Healthcare

Management, Inc. (AMEX:CONM) for approximately $60 million. Conmed Healthcare Management, Inc. provides correctional healthcare services to county and municipal detention centers.

(19)

Alternate Site (cont.)

Benchmarking

Fresenius Medical Care AG & Co. KGAA $13,074.3 IPC The Hospitalist Company, Inc. 21.8%

DaVita Inc. 7,298.5 AmSurg Corp. 17.7%

Gentiva Health Services Inc. 1,783.3 Gentiva Health Services Inc. 13.7%

Amedisys Inc. 1,481.9 DaVita Inc. 12.6%

AmSurg Corp. 839.4 Fresenius Medical Care AG & Co. KGAA 7.1%

IPC The Hospitalist Company, Inc. 473.9 Amedisys Inc. -4.4%

AmSurg Corp. 31.0% AmSurg Corp. 34.3%

DaVita Inc. 17.2% DaVita Inc. 21.0%

Fresenius Medical Care AG & Co. KGAA 16.0% Fresenius Medical Care AG & Co. KGAA 20.3% IPC The Hospitalist Company, Inc. 9.9% IPC The Hospitalist Company, Inc. 10.6% Gentiva Health Services Inc. 8.5% Gentiva Health Services Inc. 10.2%

Amedisys Inc. 6.3% Amedisys Inc. 9.0%

IPC The Hospitalist Company, Inc. 6.3% IPC The Hospitalist Company, Inc. 0.3x

Amedisys Inc. 20.5% Amedisys Inc. 1.0x

AmSurg Corp. 32.2% AmSurg Corp. 1.6x

Fresenius Medical Care AG & Co. KGAA 49.1% DaVita Inc. 2.9x

DaVita Inc. 60.8% Fresenius Medical Care AG & Co. KGAA 3.3x

Gentiva Health Services Inc. 81.7% Gentiva Health Services Inc. 5.2x

(Debt/Capitalization) (Total Debt/EBITDA)

PROFITABILITY PROFITABILITY

(EBIT Margin %) (EBITDA Margin %)

SIZE HISTORICAL GROWTH

(Revenue in $mm) (Annual Revenue)

(20)

Diagnostic Services

Diagnostic Services NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Diagnostic Services

Alliance Healthcare Services, Inc. AIQ $1.41 51.4 $2.19 $0.72 $72.5 $698.2 1.43x 4.7x 17.2x Bio-Reference Laboratories Inc. BRLI 28.58 27.7 30.15 11.41 791.6 795.5 1.25x 9.0x 11.0x Laboratory Corp. of America Holdings LH 92.47 95.9 95.30 74.57 8,867.9 10,873.3 1.94x 8.5x 10.0x

Quest Diagnostics Inc. DGX 63.43 158.8 63.98 45.13 10,069.6 13,744.5 1.80x 8.3x 10.1x

RadNet, Inc. RDNT 2.78 38.3 3.64 1.87 106.6 663.4 1.00x 6.0x 12.9x

High 1.94x 9.0x 17.2x

Low 1.00x 4.7x 10.0x

Mean 1.48x 7.3x 12.2x

(21)

Diagnostic Services (cont.)

Third Quarter 2012 News

September 17, 2012 - Beckman Coulter, Inc. entered into a definitive merger agreement to acquire

IRIS International, Inc. (NasdaqGS:IRIS) for approximately $350 million. IRIS International, Inc. manufactures in vitro diagnostic products.

September 13, 2012 - Vystar Corporation (OTCPK:VYST) completed the acquisition of an

undisclosed membership interest of SleepHealth, LLC. SleepHealth, LLC provides diagnostic sleep management services to physicians and multi-specialty clinics, hospitals, and wellness centers that offer executive health and well-being programs.

July 9, 2012 - Luminex Corporation (NasdaqGS:LMNX) completed the acquisition of

GenturaDx-USA, Inc. for approximately $95 million. GenturaDx-GenturaDx-USA, Inc., a molecular diagnostics company, develops and manufactures automated instruments for hospitals and patients.

July 1, 2012 - Fairfield Medical Center completed the acquisition of an undisclosed stake in River

View Imaging Center. Fairfield Medical Diagnostic Services at River View is an outpatient laboratory and offers laboratory and radiology services such as magnetic resonance imaging, CT scans, and routine x-rays.

(22)

Diagnostic Services (cont.)

Benchmarking

Quest Diagnostics Inc. $7,625.4 Bio-Reference Laboratories Inc. 20.7% Laboratory Corp. of America Holdings 5,597.2 RadNet, Inc. 12.7% RadNet, Inc. 644.2 Laboratory Corp. of America Holdings 8.1% Bio-Reference Laboratories Inc. 612.6 Alliance Healthcare Services, Inc. 3.6% Alliance Healthcare Services, Inc. 496.0 Quest Diagnostics Inc. 3.3%

Laboratory Corp. of America Holdings 19.3% Alliance Healthcare Services, Inc. 29.4% Quest Diagnostics Inc. 17.6% Laboratory Corp. of America Holdings 22.8% Bio-Reference Laboratories Inc. 11.1% Quest Diagnostics Inc. 21.4% RadNet, Inc. 8.1% RadNet, Inc. 17.1% Alliance Healthcare Services, Inc. 7.1% Bio-Reference Laboratories Inc. 13.6%

Bio-Reference Laboratories Inc. 13.7% Bio-Reference Laboratories Inc. 0.4x Laboratory Corp. of America Holdings 44.8% Laboratory Corp. of America Holdings 1.7x Quest Diagnostics Inc. 50.2% Quest Diagnostics Inc. 2.4x RadNet, Inc. 113.9% Alliance Healthcare Services, Inc. 4.4x Alliance Healthcare Services, Inc. 120.1% RadNet, Inc. 5.1x

(23)

Healthcare Distributors

Distributors NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Healthcare Distributors

AmerisourceBergen Corporation ABC $38.71 251.6 $42.32 $34.74 $9,740.9 $9,961.1 0.12x 7.1x 7.9x

Cardinal Health, Inc. CAH 38.97 340.5 46.23 36.91 13,270.1 13,769.1 0.13x 6.3x 7.4x

Henry Schein, Inc. HSIC 79.22 88.5 80.75 58.56 7,013.3 7,820.9 0.89x 10.7x 12.8x

McKesson Corporation MCK 86.03 236.0 97.23 66.61 20,303.9 21,870.9 0.18x 7.5x 9.3x

Omnicare Inc. OCR 33.97 111.5 36.48 20.36 3,789.3 5,276.3 0.85x 7.7x 9.6x

Owens & Minor Inc. OMI 29.88 63.5 32.00 25.87 1,897.5 1,885.7 0.21x 7.5x 8.7x

PSS World Medical Inc. PSSI 22.78 50.3 25.99 18.51 1,145.4 1,498.8 0.70x 8.7x 11.1x

Stericycle, Inc. SRCL 90.48 85.7 94.71 75.75 7,750.1 9,081.4 5.06x 16.8x 19.4x

Thermo Fisher Scientific, Inc. TMO 58.83 365.6 61.00 43.06 21,505.4 27,300.9 2.21x 10.7x 17.3x

High 5.06x 16.8x 19.4x

Low 0.12x 6.3x 7.4x

Mean 1.15x 9.2x 11.5x

(24)

Healthcare Distributors (cont.)

Third Quarter 2012 News

September 18, 2012 - Medi-Dyne Healthcare Products, LTD completed the acquisition of Cho-Pat,

Inc. Cho-Pat, Inc. designs, manufactures, and distributes preventive and pain-reducing sports/medical devices. Terms of the deal were not disclosed.

September 12, 2012 - Silvermine Opportunity Funding, LLC agreed to acquire Physicians Total

Care, Inc. Physicians Total Care, Inc. repackages and distributes prescription medications and pharmaceuticals. Terms of the deal were not disclosed.

July 19, 2012 - Ellman International, Inc. completed the acquisition of the assets of Sandstone

Medical Technologies, LLC. Sandstone Medical Technologies, LLC manufactures and distributes aesthetic laser systems to physicians and healthcare practitioners. Terms of the deal were not disclosed.

July 17, 2012 - H. Whitney & Co., LLC completed the acquisition of TIDI Products, LLC. TIDI

Products, LLC manufactures and supplies single-use infection prevention products for medical, dental, and foodservice markets. Terms of the deal were not disclosed.

July 17, 2012 - Henry Schein, Inc. (NasdaqGS:HSIC) completed the acquisition of Ortho

Technology, Inc., Modern Laboratory Services, Inc. and 75% of Accord Corporation Co., Ltd. The three companies distribute dental products, disposable medical equipment, and orthodontic supplies, respectively. Terms of the deal were not disclosed.

(25)

Healthcare Distributors (cont.)

Benchmarking

McKesson Corporation $122,734.0 Stericycle, Inc. 15.7%

Cardinal Health, Inc. 107,551.0 Thermo Fisher Scientific, Inc. 13.9% AmerisourceBergen Corporation 81,000.6 Henry Schein, Inc. 12.5% Thermo Fisher Scientific, Inc. 12,100.1 PSS World Medical Inc. 10.0%

Owens & Minor Inc. 8,722.0 McKesson Corporation 9.5%

Henry Schein, Inc. 8,681.5 Cardinal Health, Inc. 7.2%

Omnicare Inc. 6,250.4 Owens & Minor Inc. 5.4%

PSS World Medical Inc. 2,130.9 Omnicare Inc. 3.1%

Stericycle, Inc. 1,738.0 AmerisourceBergen Corporation 2.6%

Stericycle, Inc. 26.3% Stericycle, Inc. 30.2%

Thermo Fisher Scientific, Inc. 12.6% Thermo Fisher Scientific, Inc. 20.2%

Omnicare Inc. 8.4% Omnicare Inc. 10.6%

Henry Schein, Inc. 6.9% Henry Schein, Inc. 8.3%

PSS World Medical Inc. 6.3% PSS World Medical Inc. 8.0%

Owens & Minor Inc. 2.5% Owens & Minor Inc. 2.8%

McKesson Corporation 1.9% McKesson Corporation 2.3%

Cardinal Health, Inc. 1.6% Cardinal Health, Inc. 1.9%

AmerisourceBergen Corporation 1.5% AmerisourceBergen Corporation 1.7%

Henry Schein, Inc. 14.2% Henry Schein, Inc. 0.7x

Owens & Minor Inc. 18.5% Owens & Minor Inc. 0.9x

Cardinal Health, Inc. 29.0% Cardinal Health, Inc. 1.2x

Thermo Fisher Scientific, Inc. 30.4% AmerisourceBergen Corporation 1.4x

Omnicare Inc. 34.2% McKesson Corporation 1.4x

McKesson Corporation 36.8% Stericycle, Inc. 2.6x

AmerisourceBergen Corporation 39.0% PSS World Medical Inc. 2.7x Stericycle, Inc. 50.3% Thermo Fisher Scientific, Inc. 2.7x

PSS World Medical Inc. 53.6% Omnicare Inc. 3.0x

(26)

Healthcare Equipment and Supplies

Equipment & Supplies NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Healthcare Equipment and Supplies

Abbott Laboratories ABT $68.56 1,569.3 $70.41 $48.96 $107,593.5 $114,763.9 2.91x 9.9x 13.4x Baxter International Inc. BAX 60.27 547.2 61.67 47.55 32,981.6 36,023.6 2.57x 9.5x 11.6x Becton, Dickinson and Company BDX 78.56 199.6 80.56 69.59 15,677.0 17,656.7 2.21x 8.0x 10.5x Boston Scientific Corporation BSX 5.74 1,419.0 6.41 4.79 8,145.0 12,031.0 1.62x 7.4x 12.7x

CardioNet, Inc. BEAT 2.52 24.9 3.44 1.84 62.8 28.7 0.27x NM NM

Johnson & Johnson JNJ 68.91 2,757.0 69.75 60.83 189,987.7 175,589.7 2.71x 8.9x 10.7x

Medtronic, Inc. MDT 43.12 1,020.1 44.04 31.06 43,988.4 52,368.4 3.22x 9.6x 11.3x

Siemens AG SIE 77.92 881.0 80.28 62.16 68,647.5 76,945.5 1.00x 8.0x 11.0x

St. Jude Medical Inc. STJ 42.13 314.0 44.80 32.13 13,227.6 14,933.6 2.67x 9.0x 11.0x

High 3.22x 9.9x 13.4x

Low 0.27x 7.4x 10.5x

Mean 2.13x 8.8x 11.5x

(27)

Healthcare Equipment and Supplies (cont.)

Third Quarter 2012 News

September 5, 2012 - Sunovion Pharmaceuticals, Inc. completed the acquisition of Elevation

Pharmaceuticals, Inc. for $430 million. Sunovion Respiratory Development, Inc. develops aerosol/inhaled therapies for patients with respiratory diseases.

August 31, 2012 – ConvaTec, Inc. completed the acquisition of 180 Medical, Inc. for $320 million.

180 Medical, Inc. supplies sterile use catheters, and urologic and disposable medical supplies.

August 30, 2012 - Chart Inc. completed the acquisition of AirSep Corp. for approximately $180

million. AirSep Corp. manufactures and sells air separation equipment in the U.S. and internationally.

August 15, 2012 - ArjoHuntleigh AB signed a definitive agreement to acquire Kinetic Concepts,

Inc.'s Therapeutic Support Systems business for approximately $275 million. Kinetic Concepts, Inc.'s Therapeutic Support Systems business includes specialty therapeutic beds, mattress replacement systems and other support surfaces and patient mobility devices for therapeutic wound care, bariatric and critical care settings.

August 15, 2012 - Steris Corp. (NYSE:STE) completed the acquisition of U.S. Endoscopy, Inc. for

$270 million. U.S. Endoscopy, Inc. designs and manufactures endoscopy devices for the gastrointestinal endoscopy markets in the U.S. and internationally.

August 7, 2012 - Covidien plc (NYSE:COV) acquired MindFrame, Inc. for $75 million.

MindFrame, Inc. develops solutions for treating patients suffering from ischemic stroke.

July 23, 2012 - Hill-Rom, Inc. completed the acquisition of Aspen Surgical Products, Inc. for $400

million. Aspen Surgical Products, Inc. provides specialty medical products.

July 13, 2012 - Zebra Technologies Corp. (NasdaqGS:ZBRA) completed the acquisition of

LaserBand, LLC. LaserBand, LLC manufactures patient identification wristbands, labels, tags, and related products to identify adults and PED/babies in hospitals.

(28)

Healthcare Equipment and Supplies (cont.)

Benchmarking

Siemens AG $75,394.0 Becton, Dickinson and Company 8.1%

Johnson & Johnson 64,996.0 Abbott Laboratories 7.6%

Abbott Laboratories 39,267.0 St. Jude Medical Inc. 6.7%

Medtronic, Inc. 16,184.0 Baxter International Inc. 6.0%

Baxter International Inc. 13,997.0 Johnson & Johnson 4.6%

Becton, Dickinson and Company 7,945.6 Siemens AG 4.5%

Boston Scientific Corporation 7,563.0 Medtronic, Inc. 4.4% St. Jude Medical Inc. 5,630.7 Boston Scientific Corporation -2.7%

CardioNet, Inc. 112.1 CardioNet, Inc. -8.2%

Medtronic, Inc. 28.7% Medtronic, Inc. 33.8%

Johnson & Johnson 24.9% Johnson & Johnson 29.8%

St. Jude Medical Inc. 24.4% St. Jude Medical Inc. 29.6%

Baxter International Inc. 22.6% Abbott Laboratories 28.9%

Becton, Dickinson and Company 21.2% Becton, Dickinson and Company 27.8%

Abbott Laboratories 21.2% Baxter International Inc. 27.5%

Boston Scientific Corporation 12.4% Boston Scientific Corporation 21.4%

Siemens AG 9.3% Siemens AG 12.6%

CardioNet, Inc. -11.3% CardioNet, Inc. -1.8%

CardioNet, Inc. 0.0% CardioNet, Inc. 0.0x

Johnson & Johnson 24.1% Johnson & Johnson 1.0x

Boston Scientific Corporation 27.2% Baxter International Inc. 1.4x

Siemens AG 37.8% Abbott Laboratories 1.5x

Medtronic, Inc. 38.4% St. Jude Medical Inc. 1.8x

Abbott Laboratories 39.5% Becton, Dickinson and Company 1.9x

St. Jude Medical Inc. 40.3% Medtronic, Inc. 2.0x

Baxter International Inc. 42.8% Siemens AG 2.1x

Becton, Dickinson and Company 48.2% Boston Scientific Corporation 2.6x

(29)

Healthcare Information Technology

Information Technology NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Healthcare Information Technology

Allscripts Healthcare Solutions, Inc. MDRX $12.42 171.3 $21.66 $8.84 $2,127.4 $2,498.0 1.68x 10.5x 17.0x

athenahealth, Inc. ATHN 91.77 36.0 97.37 40.79 3,303.6 3,148.3 8.37x NM NM

Cerner Corporation CERN 77.39 171.2 88.32 55.69 13,247.2 12,443.4 5.15x 18.9x 23.9x

Computer Programs & Systems Inc. CPSI 55.55 11.1 74.62 41.80 614.7 591.9 3.39x 14.1x 15.1x

HMS Holdings Corp. HMSY 33.39 86.3 37.19 22.45 2,882.8 3,118.7 7.44x NM NM

icad Inc. ICAD 2.15 10.8 4.00 1.75 23.2 23.4 0.87x NM NM

MedAssets, Inc. MDAS 17.80 58.5 17.89 8.52 1,041.1 1,983.3 3.23x 10.9x NM

Omnicell Inc. OMCL 13.90 33.3 17.94 12.33 462.9 408.8 1.53x 13.3x 17.8x

Quality Systems Inc. QSII 18.53 59.3 49.42 15.04 1,099.6 964.7 2.15x 7.9x 8.7x

WebMD Health Corp. WBMD 14.03 49.1 40.24 13.52 688.7 524.5 1.04x 8.0x 10.6x

High 8.37x 18.9x 23.9x

Low 0.87x 7.9x 8.7x

Mean 3.49x 11.9x 15.5x

(30)

Healthcare Information Technology (cont.)

Third Quarter 2012 News

September 28, 2012 - Nuance Communications, Inc. (NasdaqGS:NUAN) completed the

acquisition of_QuadraM_{ed Quantim Corp}. _{for $230 million. Quadra}M_{ed Quantim Corp}.

comprises a computer-assisted coding solution which offers hospitals and healthcare

organizations with software and services that maximize healthcare information management professionals’ productivity.

September 11, 2012 - Thoma Bravo, LLC agreed to acquire Mediware Information Systems Inc.

(NasdaqCM:MEDW) for approximately $190 million. Mediware Information Systems, Inc. designs, develops, markets, licenses, implements, and supports clinical and performance management information software systems used by hospitals, long-term and alternative care facilities, behavioral health facilities, and blood and blood plasma centers.

July 17, 2012 - Vitalize Consulting Solutions, Inc. completed the acquisition of maxIT Healthcare

for $493 million. maxIT Healthcare provides clinical IT implementation services to healthcare providers.

July 3, 2012 - eResearchTechnology, Inc. entered into an agreement to acquire I_nvivodata,I_{nc. for}

$65 million. I_nvivodata,I_{nc. provides electronic patient reported outcomes (ePRO) solutions and}

services that help worldwide clinical trial sponsors to determine the effectiveness of new medical products.

(31)

Healthcare Information Technology (cont.)

Benchmarking

Cerner Corporation $2,306.8 MedAssets, Inc. 39.5%

Allscripts Healthcare Solutions, Inc. 1,473.5 Allscripts Healthcare Solutions, Inc. 37.1%

MedAssets, Inc. 597.6 athenahealth, Inc. 34.4%

WebMD Health Corp. 534.1 Cerner Corporation 23.0%

Quality Systems Inc. 429.8 Quality Systems Inc. 21.6%

HMS Holdings Corp. 388.7 HMS Holdings Corp. 21.3%

athenahealth, Inc. 350.7 Omnicell Inc. 12.0%

Omnicell Inc. 252.5 Computer Programs & Systems Inc. 9.6%

Computer Programs & Systems Inc. 177.6 icad Inc. 8.9%

icad Inc. 27.7 WebMD Health Corp. -4.3%

Quality Systems Inc. 27.0% MedAssets, Inc. 30.5%

Computer Programs & Systems Inc. 23.5% HMS Holdings Corp. 30.1%

HMS Holdings Corp. 22.1% Quality Systems Inc. 29.3%

Cerner Corporation 21.4% Cerner Corporation 27.3%

WebMD Health Corp. 15.1% Computer Programs & Systems Inc. 25.1%

MedAssets, Inc. 13.2% WebMD Health Corp. 18.0%

Allscripts Healthcare Solutions, Inc. 10.9% Allscripts Healthcare Solutions, Inc. 16.7%

athenahealth, Inc. 10.2% athenahealth, Inc. 15.1%

Omnicell Inc. 7.3% Omnicell Inc. 10.0%

icad Inc. -44.8% icad Inc. -33.6%

Computer Programs & Systems Inc. 0.0% Computer Programs & Systems Inc. 0.0x

Omnicell Inc. 0.0% Omnicell Inc. 0.0x

Quality Systems Inc. 0.0% Quality Systems Inc. 0.0x

athenahealth, Inc. 0.0% athenahealth, Inc. 0.0x

Cerner Corporation 5.9% Cerner Corporation 0.2x

Allscripts Healthcare Solutions, Inc. 18.8% Allscripts Healthcare Solutions, Inc. 1.4x

icad Inc. 29.4% HMS Holdings Corp. 3.0x

HMS Holdings Corp. 45.6% MedAssets, Inc. 5.3x

WebMD Health Corp. 54.2% WebMD Health Corp. 8.3x

MedAssets, Inc. 69.8% icad Inc. NM

LEVERAGE LEVERAGE

(32)

Hospital Providers

Valuation Metrics 70 80 90 100 110 120 130 140 150 160 170 180 190

Hospital Providers NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Hospital Providers

Community Health Systems, Inc. CYH $29.14 89.2 $29.59 $14.61 $2,598.2 $12,463.2 0.87x 6.6x 10.4x

HCA Holdings, Inc. HCA 33.25 440.7 33.55 17.43 14,651.7 42,788.7 1.23x 6.7x 8.9x

Health Management Associates Inc. HMA 8.39 256.4 9.26 4.81 2,150.8 5,734.0 0.90x 6.4x 9.8x

Lifepoint Hospitals Inc. LPNT 42.78 48.9 43.87 32.61 2,091.3 3,579.9 0.95x 6.4x 10.0x

Tenet Healthcare Corp. THC 6.27 416.7 6.44 3.46 2,613.0 7,393.0 0.75x 6.7x 10.9x

Universal Health Services Inc. UHS 45.73 96.9 46.03 31.35 4,431.0 8,183.4 1.07x 6.8x 9.1x

Vanguard Health Systems Inc. VHS 12.37 77.0 12.52 6.92 952.7 3,263.3 0.50x 6.0x 10.6x

High 1.23x 6.8x 10.9x

Low 0.50x 6.0x 8.9x

Mean 0.90x 6.5x 9.9x

(33)

Hospital Providers (cont.)

Third Quarter 2012 News

September 27, 2012 - Prime Healthcare Services, Inc. reached an agreement to acquire Landmark

Medical Center, Inc. for approximately $43 million. Landmark Medical Center, Inc., a non-profit acute care hospital, provides healthcare services in Woonsocket, Rhode Island.

September 27, 2012 - Dignity Health signed a memorandum of understanding to acquire Ashland

Community Hospital. Ashland Community Hospital provides healthcare services in Ashland, Oregon. Terms of the deal were not disclosed.

September 26, 2012 - Prime Healthcare Services, Inc. completed the acquisition of Dallas Medical

Center, a 155-bed acute care hospital that provides inpatient and outpatient healthcare services. Terms of the deal were not disclosed.

September 19, 2012 -Sinai Health System, Inc. entered into a letter of intent to acquire Holy Cross

Hospital. Holy Cross Hospital operates as a not-for-profit healthcare facility serving the

residents of Chicago. It offers emergency care, inpatient, outpatient, and surgical services, as well as primary care services at affiliate locations. Terms of the deal were not disclosed.

September 17, 2012 - MEDNAX, Inc. (NYSE:MD) completed the acquisition of Pediatric

Cardiology of Austin. Pediatric Cardiology of Austin provides care services for the needs of children and adults with heart disease in Austin and Central Texas. Terms of the deal were not disclosed.

September 11, 2012 - Marion General Hospital, Inc. entered into an agreement to acquire Marion

Area Health Center and Marion Ancillary Services, LLC. Based in Marion, Ohio, the companies operate as an outpatient center which offers diagnostic and therapeutic services. Terms of the deal were not disclosed.

September 10, 2012 - Care New England Health System signed a letter of intent to acquire The

Memorial Hospital of Rhode Island, a community hospital serving Rhode Island and southeastern Massachusetts. Terms of the deal were not disclosed.

August 20, 2012 - Steward Health Care System, LLC enter into a non-binding letter of intent to

acquire Mercy Hospital, Portland, Maine. Mercy Hospital, Portland, Maine offers healthcare services in the field of addiction medicine, cancer care, diagnostics, eating disorder, outpatient programs, radiology, and surgical services. Terms of the deal were not disclosed.

July 30, 2012 - The Sanders Trust completed the acquisition of Floyd Memorial Hospital and

Health Services. Floyd Memorial Hospital and Health Services provides healthcare services to communities of southern Indiana.

(34)

Hospital Providers (cont.)

Benchmarking

HCA Holdings, Inc. $33,650.0 Vanguard Health Systems Inc. 50.4% Community Health Systems, Inc. 14,055.6 Universal Health Services Inc. 24.2% Tenet Healthcare Corp. 9,646.0 Health Management Associates Inc. 15.4% Universal Health Services Inc. 7,571.0 Community Health Systems, Inc. 8.9% Vanguard Health Systems Inc. 6,397.5 Lifepoint Hospitals Inc. 8.6% Health Management Associates Inc. 6,064.1 HCA Holdings, Inc. 7.9%

Lifepoint Hospitals Inc. 3,654.1 Tenet Healthcare Corp. 3.8%

HCA Holdings, Inc. 13.7% HCA Holdings, Inc. 18.3%

Universal Health Services Inc. 12.0% Universal Health Services Inc. 15.9%

Lifepoint Hospitals Inc. 9.8% Lifepoint Hospitals Inc. 15.0%

Health Management Associates Inc. 9.5% Health Management Associates Inc. 14.3% Community Health Systems, Inc. 8.6% Community Health Systems, Inc. 13.3%

Tenet Healthcare Corp. 7.0% Tenet Healthcare Corp. 11.3%

Vanguard Health Systems Inc. 4.8% Vanguard Health Systems Inc. 8.6%

Lifepoint Hospitals Inc. 43.9% Lifepoint Hospitals Inc. 2.9x

Universal Health Services Inc. 57.3% Universal Health Services Inc. 3.0x

Tenet Healthcare Corp. 74.8% Tenet Healthcare Corp. 4.2x

Community Health Systems, Inc. 76.6% Health Management Associates Inc. 4.3x Health Management Associates Inc. 81.7% HCA Holdings, Inc. 4.6x Vanguard Health Systems Inc. 87.0% Vanguard Health Systems Inc. 5.0x

HCA Holdings, Inc. 134.9% Community Health Systems, Inc. 5.1x