Presentation to Vermont Pension Investment Committee
Case Study: Healthcare Receivables Facility - ESG Review
Applying the Ares Framework
Pre-Screen Criteria
Healthcare services / positive impact on society
>> Highlights
Innovative financing product that generates attractive returns
while providing consumers critical access to healthcare and
compelling value for healthcare providers
Consumer Benefits
Access to 0% non-recourse financing for medical care that
otherwise may have been avoided or delayed due to affordability
33% of Americans have chosen to delay medical treatment
due to out-of-pocket costs¹
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Healthcare Provider Benefits
Immediate capital solution and accretion to ROI on unpaid
accounts receivable
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62% of personal bankruptcies can be attributed to medical bills²
Delay of medical treatment due to cost has contributed to the
recent increase in U.S. deaths from treatable causes³
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Company's 83% purchase price represents approximately
6x the average collection rate achieved by Providers on their
self-collected unpaid accounts receivable
Uncompensated healthcare costs exceed $41 billion annually4
Key source of liquidity during COVID crisis
Increased patient satisfaction and retention of patient
relationship that would have otherwise been sold to a debt
collection agency
Helps ensure consumer payments are serviced and collected
with "best-in-class" compliance
1. Source: Gallup, December 2019.
2. Source: Himmelstein et al. American Journal of Public Health, November 2018.
3. Source: Tipirneni et al. Society for Medical Decision Making Annual Meeting, 2017.
4. Source: American Hospital Association, January 2021.
Confidential - Not for Publication or Distribution.
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Diligence
Detailed review of compliance infrastructure and
consumer engagement practices with specialty
third party regulatory counsel
Recommended certain updates to provider and
consumer contracts to align with current industry
best practices
Structure
Use of receivable and facility level covenants to
help ensure ongoing, continued compliance with
Ares ESG standards and latest regulations
Monitoring
At least quarterly reviews of ESG matters with third
party auditors
Automated ongoing monitoring for ESG related
incidents through RepRisk software
Environmental LOW
Social
Governance
LOW
LOW
HIGH
HIGH
HIGH
For illustrative purposes only. Representative of a subjective deal team assessment of
ESG risk categories based upon transaction and industry
specific diligence.
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