Health Settings Network, Inc.

Hospitals and Private Physicians: The Challenge

Serving critically and chronically ill patients in facilities with centralized equipment and staff will always be a primary responsibility of the hospital. However, without compromising the level of provided care, medical and healthcare systems are increasingly challenged to seek new ways to provide early diagnosis and extended treatment management in less costly, often third-party owned alternative ambulatory healthcare settings within hospital campuses as well as in the surrounding community. In fact, nationally, hospitals are investigating ways to monetize bricks-and-mortar and other long-term assets from their balance sheets
in order to concentrate increasingly limited financial resources on critical patient care, teaching, research, staff and equipment.

To be sure, some of the challenges facing the private physician are consistent with the challenges facing the hospital. Private physicians, however, often encounter their own unique set of obstacles as well. For instance, the private physician attempting to develop his or her own facility may have difficulty gathering lease commitments from their colleagues, or navigating the time-consuming and complex process of juggling the efforts of an army of professionals including bankers, designers, architects, engineers, attorneys and practice management consultants. This process can easily take in excess of two years, and is especially challenging while trying to maintain a medical practice.

Conversely, turning the development of the project over to a traditional developer can be tantamount to a loss of control, and may all but guarantee relinquishing ownership of the project to someone with objectives radically different from those of the physician.

The Solution...

HealthSettings provides complete Healthcare Facility Development Services and Property Management solutions at the lowest possible cost:

1. We start with project planning that is synchronized with capital and funding plans. We believe it is critical to engage the client's own management in the key issues of this
   strategic planning.
2. We engage a development team consisting of members who specialize in the areas necessary to address the specific demands of each client's unique project.
3. We utilize professionals with expertise in the complex process of accessing the capital market.

Through all phases of a project, from initial concept to the completion of building construction, and then into on-going property management, HealthSettings Network provides its clients with a single-point-of-responsibility and a seamless project delivery team to serve as advocate for our client.

We recognize that participation in ownership helps create long-term project stability, and accordingly, we encourage our clients, tenants and qualified community members to join our institutional investors in facility ownership. HSN principals provide the conduit for private and institutional investments in any of our projects where equity is needed. In furtherance of a stable, on-going project, our principals also personally retain a nominal equity position in each of the Company’s projects. Thus, we align our objectives with those of the client, and in so doing we forge a virtual "partnership." Inasmuch as we are co-owners — we share a common mission with the client; and this common mission underscores our ongoing commitment to the project, and reassures the client that it will receive constant support and guidance in making sound business and financial decisions.

SINGLE-POINT-OF-RESPONSIBILITY

While HSN constantly strives to establish trusting relationships between our client and those professionals providing the necessary menu of services required to complete a development project, we nevertheless remain dedicated to our commitment to serve as the project's single-point-of-responsibility. As a result, our clients are cushioned from the process of initiating and managing the development of a complex medical facility project. For example, among its many responsibilities, HealthSettings designs and negotiates all ground and space leases, thereby relieving hospital staff of this responsibility. Accordingly, hospital management is removed from the unenviable position of having to "do business" with its own physicians. Throughout the development process we never loose sight of the impact of the rent on our tenant's budget.

Since our role is to remain firmly positioned as the focal point of the project, HSN is fully equipped to weave together in proper order the complex activities of business planning, funding, architectural design and engineering, practice management set up, design and implementation of data and image infrastructure, facility construction, and property management.

... AND, OUR NEWEST HEALTHCARE DEVELOPMENT PROGRAM:

Several years ago, HealthSettings Network responded to the national call for development of Wellness Centers, an emerging type of destination-scale ambulatory facility that blended conventional with complementary medicine, together with heart, rheumatology, cancer and other rehabilitation services, all blended with child and adult care, day spas, cafes, libraries and many other social services. In our Company's traditional "networking" method of affiliation with trusted, experienced strategic allies, we began working with Lynne Miller in 2003 to respond to our clients' requests for evaluation of their potential Wellness Center projects... Lynne, with a BS in Health Care Administration, an MS in Nursing and extensive experience in medical science and business, began collaborating with HealthSettings by guiding, evaluating and modeling potential Wellness Center projects being brought to our Company. Together, we began to develop a distinct line of Wellness facility planning, development, financing, recruitment, on-going operations and property management, all aimed at the national Wellness Center marketplace.