Accretive Health - Reputation - Accretive Health

2012 INVESTOR DAY

Driving Growth Through Measured Results
DECEMBER 3, 2012

Safe Harbor

Certain statements contained in this presentation may be considered forward-looking as
defined by the Private Securities Litigation Reform Act of 1995. In particular, any statements
made about Accretive Health’s expectations for future financial and operational performance,
expected growth, new services, profitability or business outlook are forward-looking
statements. Investors are cautioned not to place undue reliance on such forward-looking
statements. There is no assurance that the matters contained in such statements will occur
since these statements involve various risks and uncertainties that could cause actual
results to differ materially from those expressed in such forward-looking statements. These
risks and uncertainties include those listed under the heading Risk Factors in the company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which is available
on the SEC’s website as well as in the investor relations portion of Accretive Health’s website
at www.accretivehealth.com. The forward-looking statements made in this presentation are
based on the company’s beliefs and expectations as of December 3, 2012 only and should
not be relied upon as representing the company’s views as of any subsequent date. While the
company may elect to update these forward-looking statements at some point in the future,
Accretive Health specifically disclaims any obligation to do so, even if its views change.

Driving Growth Through Measured Results 2

Use of Non-GAAP Financial Measures

In order to provide stockholders with greater insight and to We believe adjusted EBITDA is useful to stockholders in evaluating our
allow for better understanding of how our management and operating performance for the following reasons:
board of directors analyze our financial performance and
• these and similar non-GAAP measures are widely used by investors to
make operational decisions, we supplement our condensed measure a company’s operating performance without regard to items that
consolidated financial statements presented on a GAAP can vary substantially from company to company depending upon financing
basis with the adjusted EB ITDA and adjusted net income and accounting methods, book values of assets, capital structures and the
measures *. methods by which assets were acquired;

Adjusted EBITDA measure has limitations, as noted below, • securities analysts often use adjusted EBITDA and similar non-GAAP
and should not be considered in isolation or in substitute for measures as supplemental measures to evaluate the o verall operating
analysis of our results as reported under GAAP. performance of companies; and

• by comparing our adjusted EBITDA in different historical periods, our
Our management uses adjusted EBITDA:
stockholders can evaluate our operating results without the additional
• as a measure of operating performance, because it does not variations of interest income (expense), income tax expense (benefit),
include the impact of items that we do not consider indicative depreciation and amortization expense and share-based compensation
of our core operating performance; expense.
• for planning purposes, including the preparation of our
We understand that, although measures similar to adjusted EBITDA are
annual operating budget;
frequently used by investors and securities analysts in their evaluation of
• to allocate resources to enhance the financial performance companies, these measures have limitations as analytical tools, and you
of our business;
should not consider it in isolation or as a substitute for analysis of our
• to evaluate the effectiveness of our business strategies; and results of operations as reported under GAAP. To properly and prudently
• in communications with our board of directors and investors evaluate our business, we encourage you to review the GAAP financial
concerning our financial performance. statements included elsewhere in our regulatory filings, including the
Preliminary Prospectus, Form 8-K, and Form 10-K, and not to rely on any
single financial measure to evaluate our business.

*Reconciliations of non-GAAP measures to their most directly comparable GAAP measures are presented, where possible in the Appendix, as well as in the
Company’s financial press releases and related Form 8-K filings with the Securities and Exchange Commission. This information can be accessed for free in
the Investor Relations section of the Company’s website at www.accretivehealth.com


Agenda

Accretive Health Overview Mary Tolan – Founder and Chief Executive Officer

Joe Bellini – Chief Revenue Officer, RCM
Revenue Cycle Management
Michael Rosenthal – Senior Vice President, RCM Operations

Tim Barry – President, Quality and Care Coordination
Quality and Care Services
Dr. Walter Ettinger – Chief Medical Officer

Physician Advisory Services Patrick Sinclair – General Manager, PAS

Client Panel Greg Kazarian – Chief Talent Officer (Moderator)

Financial Overview John Staton – Chief Financial Officer

Q&A Accretive Health Executive Team

Lunch Accretive Health Executive Team


MARY TOLAN
Founder and Chief Executive Officer


ACCRETIVE HEALTH OVERVIEW


Our Guiding Principles

• Our primary goal is to help our healthcare clients strengthen their financial
stability and deliver better care to the communities they serve

• We use technology to drive best practices and best outcomes

• We work collaboratively with clients to create solutions to existing challenges

• We promote an entrepreneurial culture to encourage innovation and
continuously upgrade our functionality with a focus on value creation


Accretive Health Snapshot

Founded in 2003, headquartered in Chicago

Win – Win Proposition with our Client Partners
• We are paid based on our results; no upfront costs for Quality or Revenue Cycle Services
• We have partnered with some of the most well-respected health systems in the U.S.

We Drive Measured Results for our Partners
• Since inception we have delivered $1.5 billion in cash benefits to clients

Innovation and Operational Excellence is at the Core of What We Do
• Success of our RCM offering is driven by applying technology and innovative process
improvements to drive measurable results
• Seeded Physician Advisory Services in 2009, now a $60 million run-rate business
• Developed unique offerings to improve care quality at lower costs – Intra-Stay Quality and
Population Health Management Infrastructure


Three Distinct Offerings

Revenue Quality and Physician
Cycle Management Care Coordination Advisory Services

Proven end-to-end Utilize physician-driven Compliance services
solution that lowers best practices to that maintain detailed
collection costs and improve care quality at audit trails for claims
reduces yield a lower cost
leakage


Multiple Growth Drivers in Each Business

Revenue Cycle Management
• Large market opportunity, low current penetration
• Proven end-to-end solution with a win-win proposition
• Margin expansion by driving further efficiency and reducing reimbursement leakage

Quality and Care Coordination
• Population Health Management is developing as the next frontier of healthcare
• Lack of provider infrastructure for population health management
• Intra-Stay Quality has broad appeal and could create beachhead into new hospitals

Physician Advisory Services
• Increasing frequency of audits
• Opportunity for continued market share gains
• Expansion into compliance and workflow advisory services


Providers are Getting Squeezed

• Value-based payment models
Health
Reform • Medicaid expansion/State
budget constraints
• Insurance exchanges
• Declining
reimbursement
• Rising bad debt Economic
• Rising costs • ICD-10
from medical Compliance
• RAC Audits
innovation

• Capital constraints • Patient satisfaction scores
Insufficient
• Significant variance Resources • Higher out-of-pocket costs
in provision and Patients
quality of care • Aging population
• Personalized medicine


Market Opportunity

RCM Quality PAS

Market Size $1.0 Trillion $1.6 Trillion $ 710 billion

% to AH 5.0% 6.25% 0.12%
Revenue

Revenue $50 $100 $850
Opportunity Billion Billion Million

Sources: CMS National Healthcare Expenditures, September 2011 and Definitive Healthcare
RCM market scope includes net patient revenue at all hospitals based on CMS 2014 projected expenditures
Quality market scope includes all hospital and physician expenditures
PAS market scope includes all hospitals with >$250 million in net patient revenue


Value Proposition

Revenue Cycle and Quality Require No Upfront Investment from Clients
• Accretive Health is compensated based on Measured Value delivered to clients

Our End-to-End Solution Delivers Superior Results by Combining People,
Process and Technology
• People: Well-trained professionals who work directly with the client
• Process: Market-leading best practices to allow seamless workflow at all stages of the
revenue collection process
• Technology: Comprehensive tools to measure and improve efficiency for clinical and financial
outcomes


A Differentiated Offering

Accretive Health
Operating Partnership

NOT
 Pay for measured results
a consulting firm
 Unparalleled form of
collaboration
NOT
 End-to-end scope
an outsourcing model
 AH makes significant
investment of resources
NOT  Pay for results not input
a software provider

We create operating partnerships that result in distinctly
different outcomes than other models


End-to-End RCM Solution Provides Competitive Advantages

Value
Patient Patient Lost Payor
Compliance Proposition
Advocacy Share Charges Follow-Up
(% revenue lift)

4-6%
(Measured)

SaaS /
Est. 0.5-1%
Technology- (Not Measured)
Supported RCM

Est. 0.5-1%
Consulting (Measured)

IT Outsourcing / Est. 0.5-1.5%
Non-HC BPO (Not Measured)

Note: Based on Accretive Health’s estimates


Partnering with Innovative Leaders


JOE BELLINI
Chief Revenue Officer, RCM

MICHAEL ROSENTHAL
Senior Vice President, RCM Operations


REVENUE CYCLE MANAGEMENT


Market Drivers for RCM Solutions

Financial Increasing Obsolete Investment
Pressures Complexity Technology Risk

• Declining • ICD-10 • Old-generation • No upfront
reimbursement financial systems investment
• Health
still in use with Accretive
• Increasing Reform
Health
patient • Fragmented
responsibility solutions

• Poor collection
rates

We compete with numerous vendors who approach the
market with incomplete solutions


Collection Yield: Uncovering Hidden Leakage

Opacity in the revenue cycle process hides leakage

Typical hospital Calculation after
calculation AH analysis

Gross charges $1,000 $1,000
Less: Accurate contractual adjustments - 500 - 500
Less: Hidden leakage disguised as - 35 0
contractual adjustments
Gross charges less contractuals (collectable cash) $465 $500
Less: Payor write-offs -5 -5
Less: Bad debt -25 -25
Less: Hidden leakage 0 -35
Areas for AH
Cash collected $435 $435 to drive
improvement
$435 $435
Yield (cash collected/collectable cash): $465 = 94% $500 = 87%

We uncover hidden leakage to derive a real picture of collection yield


How do we Uncover Hidden Leakage?

Our proprietary AHtoContract tool is vital in calculating Best Possible revenue

12-month period

All contracts

All patient visits and charge information

AHtoContract Tool

Best Possible Revenue


Understanding Leakage: Illustrative Example

Revenue Mix
100% 4.1%
7.7%
% of
Yield
Total
75%
Uninsured 5% 0.2% 4.1% x 5.0% = 0.2%
Insured patient
responsibility 30% 2.3% 7.7% x 30% = 2.3%
50%
88.2% Payors 95.8% 84.5% 88.2% x 95.8% = 84.5%

25% Overall Collection Rate: 87.0%
Uninsured patients

Insured patients residual responsibility

0% Payor reimbursement

In an industry where operating margins average ~2%,
13% revenue leakage is significant


RCM Win-Win Proposition I: Improved Revenue Lift

5% • Pre-registration
• Automated insurance verification
Payor yield: 2% • Automated plan code correction
• Prior authorizations
4% • Continuous denials review/fix
• Automated denial resolution
• Automated underpayment trolling
• Proper contractualization of receivables
3% • Specialized physicians to appeal denials

Insured • Real-time patient responsibility estimation
patient yield: 1% • Simplified billing statements
• Prior balance visibility
2% • Patient education
Patient self-pay • Alternate sources of coverage
conversion: 1% • Expeditious charity care application
• Manage secondary coverage as backup
1%
Increase to • Identification of missing or unbilled charges
• Pricing initiatives
“Best Possible”: 1% • Post-coding, pre-bill quality review
0%

We retain a portion of the revenue lift as our Incentive Fee


Reducing Collection Costs: Methodology

We help our clients reduce costs through:
• Process efficiency – eliminate • Vendor cost management
redundant effort • Demand-driven staffing and scheduling
• Technology-driven productivity • Use of Shared Service Centers to drive
improvements – automation economies of scale

What services are included?

Front-End Middle Back-End
Scheduling Transcription Billing
Pre–registration Coding Claim follow–up
Registration Case coordination Cash posting
Eligibility Records storage Pre-collect
Insurance verification Clinical documentation Underpayments
Pre–authorization Release of information Denial management
Financial counseling Medical records Contract compliance
Admitting Charge capture


RCM Win-Win Proposition II: Reducing Collection Costs

Cost Baseline: Hospitals spend about 4.0-4.5% of NPR on their collection effort
• This baseline serves as the initial basis of our Base Fee

$120

$100 Cost Baseline
15-30% expense
$80
reduction after
engaging with AH
$60

$40

$20

$0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Reducing collection costs:
• Accretive Health aims to reduce cost to collect by 15-20%, or 20-30% if services are migrated to Shared
Service Centers
• Cost savings are shared with clients, providing a mutual incentive


Shared Service Centers

We operate 10 Shared Service Centers domestically and offshore

89% of revenue cycle management customers utilize at least one shared
service; 55% of customers utilize at least three shared services

Shared services deliver enhanced benefits – more cost savings than
processing on-site

Services delivered via Shared Service Centers:
• Financial Clearance
• Customer Service
• Pre-collect
• Medicaid Eligibility
• Patient Financial Services
• Underpayments
• Transcription
• Coding


Why Our End-to-End Solution is Better

Superior results through complete oversight of the revenue cycle
• Fragmented solutions are sub-optimal, with no complete view of data
• Competitors with limited scope can only deliver limited value
• Root cause analysis shows significant problems are caused by poor inputs
• Garbage in…garbage out!

• Effective revenue cycle must capture all inputs and outputs at the front, middle
and back end
Accretive Health Oversight

Patient Cash
Information FRONT MIDDLE BACK Collected
(input) (output)

Competitors with
limited scope


Our Technology is a Critical Piece of our Offering

Accretive Health technology integrates with client patient accounting,
scheduling, and electronic health record systems

• Existing patient accounting system remains
“System of Truth”
• Industry-standard protocols (HL7, EDI, etc)
• Seamless interfacing, NOT a system conversion
• Experienced implementation teams
• No local hardware or software installation
• Hosted in world-class SAS-70 compliant data center


Technology Model

Our technology…

Detects accounts that have financial risk

Streamlines the Execution of resolving the risk

Measures the efficiency and effectiveness of our process and outcomes


Core Revenue Cycle Technology

AHtoContract™
Best Possible calculation, contract modeling, insurance payer follow up
payment

AHtoAccess™
Patient pre-registration and registration, insurance eligibility checking

AHtoCharge™
Charge integrity and compliance

Yield-Based Follow Up™
Follow-Up™
Follow-up
Follow up for un-billed and billed claims with payors

AHtoAnalytics™
Operational reporting and analytics with drill-through to account level detail

Proprietary & Confidential

Eliminating Leakage Drives Returns

Potential Sources of Leakage Throughout End-to-End Process
Actual Leakage
FRONT-END MIDDLE BACK-END Realized
Registration and Health Information Uncompensated Care
Billing and Follow-up
Financial Clearance Management • Bad debt
• Charity care
• Denial write-offs
• Incomplete patient data • Insufficient or • Insufficient follow up
• Incomplete insurance incomplete with payer/patient
verification documentation • Failure to appeal Hidden Leakage in
• Coding errors denial • Contractuals
• Incorrect payor code (Underpayments,
• Failure to obtain • Missed charges • Billing errors misclassified denials)
pre-authorization • Discharge not final
• Incorrect residual billed (DNFB)
Hidden Leakage Due to
estimate • Cash posting errors
• Missing charges
• Failure to discuss patient • Failure to bill • Documentation and
share/ prior balance secondary coding errors
• Failure to find • Delays in timely filing
secondary insurance • Third-party take
• Coordination of benefits backs


AHtoCharge

Metrics Manual Internal Audit* AHtoCharge

Total Registered Visits 1,000,000 1,000,000

Reviewed Accounts 1,000 1,000,000

% Reviewed 0.1% 100%

Worked Accounts 1,000 30,000

Reconciled Revenue Leakage (# of accounts) 100 8,000

Gross $'s Reconciled $50,000 $4,000,000

*Based on Accretive Health’s estimates


Lifecycle of a Claim

Thorough analysis of claims
Balance (BAL) Compare to:

REI $4642.01 Aug.15,2012 – Nov 13, 2012 Charges
BAL $0 CHR $9423.75 PMT $4642.01 ADJ $4781.74
L Payments

Patient Payments

Discharged Insurance Payments

8000.00
8/22/2012 Adjustments

Exp Reimbursement

6000.00

Admitted Patient Payment
8/18/2012 11/7/2012

4000.00
Contractual
Allowance
Insurance 11/7/2012 Insurance
Payment adjustment
2000.00 S 10/11/2012 Insurance
R payment
P R

E C U Y

LL A U T B 2 8 C Z Y 8 2 8 $ B 2 8 $ $
0

Pre-Registration
Aug 20 Aug 27 Sep Sep 20 Sep 17 Sep 24 Oct Oct 8 Oct 15 Oct 22 Oct 29 Nov

8/15/2012 Insurance
plan info added


Yield-Based Follow-up

The Yield-Based Follow-up Tool utilizes proprietary algorithms and business
logic to assign accounts to appropriate risk categories.
Initial Prioritization based on factors including:
• Payor type and plan code • Days from discharge
• Current insurance balance • Days before filing appeals deadline
• Expected reimbursement • Most recent activity on the account
• Denial type (if any) • Recommended follow-up date

Advanced Prioritization Algorithms
• Customizable business rules engine utilizing 30+ • Insights from predictive models based on analysis of
variables for each account historical data

Workflow Management
• Grouping of accounts into risk levels • Campaigns focused on specific claim types

Prioritized claims for each follow-up representative


Factors that Contribute to Long-Term Client Partnerships

• Technology is integrated into all key steps in the revenue cycle process

• Industry knowledge, reporting, and analytics capabilities are integrated into
management of the operations

• Embedded management teams are integral to execution of revenue
cycle processes

• Utilization of Shared Service Centers delivers additional cost savings

• Operational excellence and a focus on continuous improvement, combined
with consistent financial results, generates loyalty


Q&A


QUALITY AND CARE COORDINATION


TIM BARRY
President, Quality and Care Coordination

DR. WALTER ETTINGER
Chief Medical Officer


Market Overview

Healthcare Spend in the U.S. is Unsustainable…

$9,000 20%
USA OECD $8,223
18%
Healthcare Spend per Capita (USD)

$8,000

Healthcare Spend as a % of GDP
17.6%
16%
$7,000
13.7%
14%
$6,000 12.4%
12%
$5,000 $4,791

9.0% 9.5% 10%
$4,000
7.1% 6.9% $3,265 8%
$2,851 7.8%
$3,000 5.1%
6.6% 6%
$1,888
$2,000 5.1% 4%
$1,102 $1,185
3.8%
$1,000 $628 2%
$356
$148 $78 $187
$- 0%
1960 1970 1980 1990 2000 2010
2009

Source: The Organization for Economic Cooperation and Development (OECD) Health Expenditure Data


Market Overview

...and Care Quality Outcomes are Sub-Optimal

85
JPN
SPA AUS AUT SWI
ISR ITA ICE SWE CAN
Life Expectancy in Years

NZL IRE FRN NOR
KOR GRC
80 GBR BLG GER LUX HOL
SLV FIN
CHL POR
DMK
USA
CZH
POL
MEX
75 EST SLR

TUR HUN

70
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000
Health Spending per Capita (USD)

Source: OECD Health Expenditure Data


“If home building were like healthcare,
carpenters, electricians, and plumbers each
would work with different blueprints, with very
little coordination.”
–Institute of Medicine 2012 Report on Best Care at Lower cost

41

Quality & Care Initiative

Market Drivers
• Shift away from fee-for-service model to population-based accountability
• Provider performance standards tied to total patient quality and cost
• Systems required to provide insight into total patient medical history
• Requires significant investment and expertise for population-based delivery

Accretive Health Solution
• Turn-key accountability-based model that improves quality of patient care
• Strengthens relationship between hospitals and physicians
• Creates aligned interest between payors, hospitals, physicians and Accretive Health
• Generates significant savings for the healthcare system


Quality and Care Initiative

Accretive
Health
Quality &
Care

Optimizing Intra-Stay Population Optimizing quality
Quality Health
quality and and financial
financial results results across all
within each episodes of care
episode of care Physician Engagement

Predictive Analytics

Workflow and Decision Support Technology

Optimal Skill Sets for Execution


End-to-end Infrastructure for Population Health Management

Starting point

Sickest
and most
responsive
patients Continuous care assessment
allows physicians to focus on the
sickest patients and coordinate
care to improve outcomes

Patient-
Real-time specific care
clinical plans and
pathway care
adjustment coordination
workflow


End-to-End Infrastructure for Population Health

Sophisticated Business and
Payor Contracting Model

Proprietary Data and
Technology Platform

Physician Performance and
Change Management

Patient Engagement and
Real-time Care Management

Continuous R&D and Predictive
Performance


Projected Cost and Savings Trend

Cost and Saving Trend Saving ($ in mm)

$290
$1,158

$1,103
$70 To Accretive Health
Market
Trend:
5% $1,050
$1,000 ACO
10% 18% Savings 25% To participating
Efficiency providers and
$945 $220
payors
$904
(splits may vary)
$868

Year 0 Year 1 Year 2 Year 3



Oncology Care: A Complex System for the Patient to Navigate

E/R Oncology
Visit Consult

Imaging
Genetic
Routine Visit/ Testing In-patient
Lab Genetic
Maintenance
stay
Counseling

PCP Imaging

Infusion
Lab
Therapy
Pharmacy Specialist

Psych
Counseling
Palliative
Other Care Counseling
Critical
Trial
Nutritional
Counseling Pharmacy

Radiation
Surgery Oncology

Cancer related Executed at Oncology Clinic
May or may not be executed at Oncology Clinic
Non-Cancer related
Usually not executed at Oncology Clinic


Oncology Care: Significant & Growing Costs

Cost of Care – Cancer v. Non-Cancer (PMPM) ($)* National Health Expenditures – Oncology (US) ($ in bn)**

$10,317.76 $60
2010A

$50 2020E

$40

$30

$2,708.16 $20

$10
$363.64
$0
Cancer Dx + Active Cancer Dx w/o Active All Non-Cancer
Chemo Tx Chemo Tx

% of Membership <1% <1% 99+% Total Expenditures (2010A): $124.5
% of Total Spend 4% 4% 92% Total Expenditures (2020E adjusted): $157.7+

* Source: Milliman, 2010; study of costs for ~14mm commercially-insured lives; assumes 11 mm’s / member; all figures depicted in 2013 $’s
+ Adjusted for recent trends in dx incidence, survival, and cost
** Source: Yabroff, 2011; 2020 figures depicted in 2010 $’s


Simplifying a Complex Process

5 High Impact Interventions to:
• Improve the patient experience
• Manage complexity
• Enhance outcomes
Optimal lab and
• Reduce cost Evidence-based protocols
Development and consistent
Imaging utilization
Application of protocols to remove
application of
unneeded / redundant utilization
best practice treatment protocols

End of life/Palliative Care 24X7 symptom
Consistent approach to
EOL discussions to ensure management
patient fully understands On-call triage helps ensures
treatment / quality of life tradeoffs patient centric, cost effective
solutions to current
In clinic activities symptom(s)
(existing)

In clinic proposed
pilot activities

Outside clinic activities: cancer
Care coordination
related Care coordinator ‘connects
dots’ across full care spectrum
Outside clinic activities: non- to anticipate / respond to care
cancer related gaps to drive triple aim


The Need for Intra-Stay Quality

Many US hospitals do not recoup the cost of care provided for Medicare beneficiaries

Medical Center Potential Future
MedPar FY11 Medicare P/L per Patient Medicare P/L per Patient

$20,000

$16,533
$15,000 $16,533

$10,000
$10,255
Direct Care Cost $5,000
$6,255
$4,749
$0
• Reduced • Wage increases
-$6,278 -$5,000 payments • Investment in new -$6,278
• Readmission technologies
penalties • Aging population
-$10,000
• Penalties for
hospital acquired
-$15,000 conditions

Payment Cost Operating Payment Cost Operating
Income Income

Source: AHD, October 2012 Source: AHA, June 2012


Intra-Stay Quality Timeline

ISQ Solution Today Tomorrow

• Prepare for changes from Health Reform
Align Partners • Establish a shared vision • Administer payment model and disburse
payments

• Analyze DRG and service level
• Introduce real time DRG cost buildup tool
Analytics and performance
• Establish evidence-based plans of care to
Reporting • Establish system/hospital scorecard
reduce variation
and targets

• Establish post discharge relationships and
• Implement defined plan of care communication
Accountability model for high priority patients
Across the • Introduce pre-stay communication, education,
Continuum • Implement tools and technology to and decision support
support efficient through-put
• Integrate care plans with primary care providers

• Identify and implement next wave of enterprise-
Operational • Identify enterprise wide and DRG wide and DRG opportunities
Excellence and specific opportunities and implement
Innovation solutions • Embed CI behaviors and outcomes into
individual performance goals


Our database calculates “avoidable days” opportunity for each DRG

DRG X GMLOS

Facility Avg cases/yr GMLOS AMLOS Median Quartile
Top performer
Sit e 1 7 3. 44 5.04 4 1 3.44
Sit e 2 34 3. 96 4.79 4 1 (shortest LOS)
Sit e 3 27 4. 09 5.06 4 1
Sit e 4 14 4. 22 4.96 4 1
Sit e 5 31 4. 37 5.16 5 1
Sit e 6 35 4. 41 5.77 5 1
Sit e 7 14 4. 48 5.46 4 1
Sit e 8 12 4.49 5.58 4 1 Top quartile 4.49
Sit e 9 40 4.51 5.49 4 2 cut-off (target)
Sit e 10 18 4.56 5.87 5 2
Sit e 11 64 4.58 5.80 5 2
Sit e 12 54 4.63 5.50 5 2
Sit e 13 247 4. 66 5.77 5 2
Sit e 14 128 4. 70 5.61 5 2
“Avoidable days”
Sit e 15 83 4. 84 6.22 5 2
calculated as difference
1.11 days x 88 cases = 98 avoidable
Sit e 16 108 5. 09 6.45 5 2 per case
between client and bottom per year days per year
Sit e 17 35 5. 10 6.11 5 2
of top quartile for DRG (16%
Sit e 18 13 5. 29 6.63 5 3
Sit e 19 129 5. 31 6.34 6 3
reduction)
Sit e 20 64 5. 38 6.55 5 3
Sit e 21 210 5. 38 6.90 5 3
Sit e 22 51 5. 58 6.59 5 3
Sit e 23 43 5.60 6.44 6 3
Client 88 5.60 6.97 6 3 Client 5.60
Sit e 25 55 5.66 6.72 5 3
Sit e 26 32 5.73 6.75 6 3
Sit e 27 54 5. 75 7.16 6 4
Sit e 28 21 5. 86 7.00 6 4
Sit e 29 24 5. 94 7.43 6 4
Sit e 30 68 6. 21 7.85 6 4
Sit e 31 46 6. 50 8.32 7 4
Sit e 32 76 6. 62 8.26 7 4
Sit e 33 64 6. 63 8.60 6 4
Sit e 34 6 6. 79 8.96 9 4 Bottom performer 6.79
Tot al 2264 5. 04 6.33 Database mean 5.04
CM S ( 2011) 5.22 6.61 CMS 5.22
Based on Accretive Health data

ISQ Objectives

Lower Cost of Care
Reduce costs per inpatient encounter due to optimized resource utilization,
correct care setting, and reduced practice variation

Improve Quality
Improve quality metrics (readmissions, core measures, falls, hospital-acquired
infections, pressure ulcers, adverse drug events, serious safety events,
medication management)

Improve Patient Satisfaction
Improve communication with patients about their condition, their care plan, and
expectations for their stay and discharge plan, resulting in higher HCAHPS
scores

Improve Reimbursement
Improve value-based purchasing and affordable care metrics resulting in reduced
hold-backs and increased pay for above-average performance


Maximizing Value in Episodic Care

• Current episodic care environment offers tremendous opportunity to improve
resource utilization, reduce variation in treatment practices and ensure care is
provided in the optimal setting

• Competitors have not driven successful or sustainable results

• Accretive believes it can favorably impact length of stay and improve quality
through:
• Patient care coordination
• Physician engagement
• Optimal care setting
• Proprietary tools and technology

• Quick deployment upon contract execution


PATRICK SINCLAIR
General Manager, AccretivePAS


PHYSICIAN ADVISORY SERVICES


PAS Overview

PAS provides a range of compliance services to help hospitals with billing
classification
• Concurrent or Preemptive Reviews: Proactively manage cases at the point of entry to provide
proper classification
• Retrospective or Appeals Management Services
• Fixed-fee pricing model (per case)
• Rapid implementation process

$850 million market opportunity
• We estimate PAS has ~7% market share
• Growth drivers include:
• Changing audit criteria and regulations
• Increased frequency of formal audits


PAS Value Proposition

Our priority is to identify misclassified patients, and to protect compliant revenue

High

OVER CLASSIFYING ACCRETIVE PAS® OBJECTIVE

Revenue integrity
• Low Compliance • High Compliance
• Revenue At Risk • High Revenue Integrity

Low Compliance

PROBLEMATIC UNDER CLASSIFYING
• Low Compliance • Perception of High Compliance
• Low Revenue Integrity • Lost Revenue
Low


Process - The Classification Decision

The decision to classify a patient as inpatient versus
observation for billing purposes is based on complex medical judgment

Accretive’s licensed physicians consider a number of factors when making their
billing classification recommendations to our clients’ medical staff:
• Patient’s medical history and current medical needs
• Types of facilities available to outpatients and inpatients
• Relative appropriateness of treatment in each setting
• Severity of signs and symptoms
• Medical predictability of adverse events


PAS Value Proposition

Similar to our other businesses, PAS provides superior people, process and
technology to deliver value

People Process Technology

• Only licensed • Workflow focused on • Automated referral management
physicians service levels by • Integration with hospital EMR and/or Case
patient location Management suites
• Thorough training on
CMS rules and • On-site process • Operational reports
regulations improvement • Monthly reports highlighting risk areas
discussions with • Real-time analytics – key stats and metrics
hospital staff • Case level detail with drill down capabilities
• End-of-quarter reconciliation report


CLIENT PANEL


GREG KAZARIAN
Chief Talent Officer – Accretive Health (Moderator)

CYNTHIA FRY, Ph.D
Corporate Vice President, Revenue – Catholic Health East

RICH FELBINGER
Chief Financial Officer – Borgess Health

IKE NICOLL
Chief Executive Officer – Cancer Clinics of Excellence


JOHN STATON
Chief Financial Officer


FINANCIAL OVERVIEW


Business Model Highlights

• Large market opportunity

• Highly recurring revenue and earnings through long-term contracts

• Strong balance sheet with minimal capital requirements

• Expanding contract margins

• Limited exposure to macroeconomic headwinds

Win-Win Value Proposition with Clients


Large Market Opportunity

RCM Quality PAS

Revenue
$50 Billion $100 Billion $850 Million
Opportunity

2% 0% 7%

AH Share


Solid Growth in NPR Under Management

34% CAGR in Net Patient Revenue since 2005 for contracts
under management in our core revenue cycle offering

$22
$19
($ in billions)

$15

$12

$9.2

$6.7

$4.1
$2.4

2005 2006 2007 2008 2009 2010 2011 2012E


Highly Visible Revenue

36% revenue CAGR since 2005

High Visibility: <6% of current contracted revenue
up for renewal in the next twelve months*

~$948
($ in millions)
$826

$606
$510
$398
$241
$161
$111

2005 2006 2007 2008 2009 2010 2011 2012E

*$53m of PCARR due for renewal in the next twelve months as of 9/30/12, compared to $889 million to $906 million PCARR as of 9/30/12


RCM Contract Economics – Putting it Together

Accretive Health shares cost savings with the client, and retains a portion
of the revenue lift

15-30% Lower Cost to Collect 4% - 6% Revenue Yield Lift

Cost Takeout Trajectory Revenue Lift Trajectory

100% 15% - 20% Cost Takeout
4% - 6%

20% - 30% Cost
Takeout
with Shared Services

0%
0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

>$30 million in additional value annually for a typical hospital with $1billion in NPR


Improved Efficiency Drives EBITDA Margin

Non-GAAP Adj. EBITDA and EBITDA Margin
($ in millions) 8.4% -9.3%
9.9%
$80

$30-
$33
$60
5.3% -5.8%
7.4%
$40 $81.6
6.5%
$50-
$45.0 $55
$20
3.1% $32.9
2.8%
$12.2
$6.8
$0
2007 2008 2009 2010 2011 2012E

Adjusted EBITDA adds back stock-based compensation expense to EBITDA. See discussion on the use of Non GAAP measures


5-Year Outlook

Year Ended
Target
Dec. 31, 2011
($ in millions)

20% - 25%
Net Revenue $826.3 CAGR

Adj. EBITDA Margin 9.9% 14% - 18%

Adjusted EBITDA adds back stock-based compensation expense to EBITDA. See discussion on the use of Non GAAP measures


Strong Balance Sheet and Cash Flows

($ in millions)

December 31, 2011 September 30, 2012

Cash and Cash Equivalents $196.7 $196.4

Capital Lease Obligations (Including Short-term) 0.0 0.0

Other Indebtedness (Including Short-term) 0.0 0.0

Total Stockholders' Equity $238.1 $258.0

Operating Cash Flow $32.0
($ in millions) $21.8
$15.1 $16.4

2009 2010 2011 YTD 2012


2012 Outlook

PCARR $930M - $960M
(Projected contracted annual revenue run rate)

Net Revenue $948M - $980M
(low end of range)

Adjusted EBITDA $50M - $55M

Includes negative impact of $30 to $33 million of non-recurring items

Adjusted EPS $0.23 - $0.27

As provided on November 7, 2012

Appendix - Reconciliation of Non-GAAP Financial Measures

The following table presents a reconciliation of adjusted EBITDA to
net income, the most comparable GAAP measure
($ in millions)

2007 2008 2009 2010 2011

Net Income $0.8 $1.2 $14.6 $12.6 $29.2

Net Interest Expense (Income) (1.7) (0.7) 0.0 (0.0) (0.0)

Provision for Taxes 0.5 2.3 3.0 9.7 18.9

Depreciation & Amortization Expense 1.3 2.5 3.9 6.2 8.3

EBITDA $0.8 $5.3 $21.5 $28.5 $56.4

Stock Compensation Expense 6.0 6.9 11.4 16.5 25.2

Adjusted EBITDA* $6.8 $12.2 $32.9 $45.0 $81.6

*Adjusted EBITDA adds back stock-based compensation to EBITDA


MARY TOLAN
Founder and Chief Executive Officer


LOOKING AHEAD


In Summary

• The opportunities for our business are promising given the challenges facing
healthcare providers

• There are numerous growth avenues within each of our businesses

• Revenue Cycle Management
• Large market opportunity, low current penetration
• Margin expansion opportunities

• Quality and Total Cost of Care
• Market is ripe for solutions geared to population health management

• Physician Advisory Services
• Increasing complexity and frequency of audits

• Expand relationships with existing clients by driving growth through measured results

• Strong balance sheet and cash flows to execute on our objectives


Accretive Health - Reputation - Accretive Health

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