Difference between revisions of "Offshore Health Solutions"

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(Expansion: "Alliances" section)
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industry.  Some of the leading Asian shipyards include Korea's Samsung Heavy Industries,  
 
industry.  Some of the leading Asian shipyards include Korea's Samsung Heavy Industries,  
 
Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering.
 
Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering.
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====Return on Investment====
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At capacity, each dedicated cruise ship is projected to produce $95MM in profits annually. Current cruise lines and traditional medical tourist hospitals have a multiple of 9 for their stock price, and these are stable businesses. So a single ship would support a corporate valuation of more than $1B and have the added benefit of providing enough cash flow to purchase and launch more ships. The medical market is far larger than the travel and leisure market and should support a fleet of more than 25 vessels of the size of the original ship. This would allow Offshore Health Solutions to earn a valuation of more than $25B and would be in line with the current valuation of Carnival Cruise Lines.
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Overall the health care market is very large (over $2T) and Offshore Health Solutions will be well positioned to expand its offerings and fleet to take a large share of the elective procedure market and expand into additional health care markets.
  
 
==Financing Programs==
 
==Financing Programs==

Revision as of 14:16, 22 April 2012

Contents

Abstract

Business Summary

General Franchise Description

Offshore Health Solutions is a global franchise of medical and research facilities located aboard oceangoing vessels and seasteads. Medical procedures are conducted in international waters to avoid unnecessary red tape, and to allow increased availability of health alternatives at a lower cost in an environment of practical consumer-based accountability and service.

Mission Statement

To facilitate advanced and state-of-the-art health and medical services with the highest standards of quality at a significantly lower cost by capitalizing on offshore provision, international competition, and market-based regulation.

Franchise Goals

1) Providing access to alternative care that would otherwise be highly regulated - with an initial focus on less controversial treatments and procedures. Allow the marketplace to prove itself as the best regulator.

2) Lowering the cost and increasing the quality of provision of medical services by allowing greater competition among providers. Medical tourism is driven mostly by the lower cost of foreign medical care for comparable treatment.

3) Granting insurance companies a greater role in the evolution of offshore medical practices and in directing the finance of medicine. Any factor determined to be quantitative by actuarial science is the natural basis for pricing - including lifestyle, genetics, preexisting medical conditions, demand, &c.

Franchise Objectives:

1) Complete a pilot unit on an existing vessel and cruise line within the year.

2) Initiate the franchise with three vessels (one franchise unit per vessel), one Master Franchisee, and one Area Representative within a year after the pilot.

3) Allow Master Franchisees to expand the number and scope of sub-franchisees with a maximum of two each until three Master Franchisees, and then allow additional Master Franchisees. Each will be limited to forty nine percent of the number of patients served and to twenty one percent of the total cost of each type of procedure conducted within the franchise (including follow-up, recuperation, and other settlement) after the sub-franchisee is added.

4) Support franchisees in the purchase and operation of vessels or in establishing or expanding to stationary or floating SeaSteads.

Business Philosophy:

1) Offshore Health Solutions will offer the ultimate price-quality guarantee. The combined costs for any medical procedure and the entire trip will be less than one half that of a comparable unsubsidized procedure done in the United States, and meet or exceed quantifiable quality measures for a comparable procedure.

2) Offshore Health Solutions will provide an enjoyable and seamless experience with advanced logistics, a state-of-the-art international medical informatics infrastructure, and continued follow-up.

3) Offshore Health Solutions will achieve the highest safety standards possible by accepting full financial accountability for unanticipated outcomes.

4) Offshore Health Solutions will provide an environment for cutting edge and alternative medical care at a significantly reduced cost by capitalizing on the global marketplace for the provision of medical services.

5) Offshore Health Solutions will encourage a close relationship between medical professionals and insurers in order to meet the highest standard of quality possible at competitive rates.

6) Offshore Health Solutions will provide access to certification tools and rating services in order to ensure the highest level of competence among medics.

Franchise Overview

Products and Services

Offshore Health Solutions will offer a variety of health solutions and coordinate on-board activities and infrastructure with the various cruise lines:

  • Health food store with OHS approved products
  • On-board on-call pharmacist/nutritionist
  • Coordinated health and diet maintenance
  • Coordinated gym and physical activities/therapies

Elective Surgery

Offshore Health Solutions will begin offering medical procedures with the widest disparity of costs such as the following:

  • Heart valve replacement
  • Heart bypass
  • Hip and knee replacement
  • Spinal fusion
  • Angioplasty

The offerings will then expand into additional procedures that uphold its price/value guarantee.

Orthopedic Surgery

Offshore Health Solutions will provide orthopedic and cosmetic surgeries, specifically total hip replacement, total knee replacement and hip resurfacing. These treatments are characterized by substantial costs savings when compared to the U.S. equivalent, and are generally low risk. In addition, the procedures are not urgent, allowing potential patients ample time to plan and prepare for a medical tourism excursion.

There are 1.2 Million hip and knee replacement surgeries performed annually in the US. As the baby boomer generation ages these numbers will increase. See attached information.

Cosmetic Surgery Trends

According to a survey conducted by the American Society of Plastic Surgeons (ASPS), there has been an increase in the following trends - particularly in Southern California: couples/families having surgery together, patients seeking minimally invasive procedures in lieu of surgery, and massive weight loss patients seeking body contouring procedures. Another such trend is an increase in the number of male patients as well as younger patients.

Key findings in Southern California:
  • Breast augmentation ranked 1st
  • Tummy tuck ranked in the top three among women, but ranked 5th nationally.
  • Breast reduction in women ranked in the top two, but ranked higher nationally.
  • Among men, nose reshaping ranked either 3rd or 4th, but ranked 1st nationally.
  • Among men, liposuction ranked 1st, but ranked 3rd nationally.

Key Findings in Patient Demographics:

  • Los Angeles reported an increase in Hispanic patients in the last three years. Nationally,

ASPS reported a 1% decrease from 2005 to 2006.

  • Ethnic patients represented a significantly higher mean percentage in Los Angeles.
  • The average percentage breakdown of male patients in Los Angeles ranked higher than

the national average.

  • The number of males seeking cosmetic plastic surgery in the last three years has

increased notably.

  • On average the highest percentage of patients were 31 to 45 years old. Nationally, the

highest percentage of patients fell in the 40 to 54 age group.

Cosmetic Trends: National

The annual report released Monday by The American Society for Aesthetic Plastic Surgery indicates that 11.7 million cosmetic procedures were performed in the US in 2007 at a cost of roughly $13.2 billion.

Cosmetic Procedure Statistics More than 1.8 million surgical cosmetic procedures were performed in the United States in 2006, led by breast augmentation (329,000), rhinoplasty (307,000), liposuction (303,000), eyelid surgery (233,000) and tummy tuck (146,000), according to the American Society of Plastic Surgeons.

Among Women “Mommy makeover” procedures such as breast augmentation, tummy tuck, and breast lift are on the rise. More than 325,000 tummy tuck, breast augmentation, and breast lift surgeries were performed on women between the ages of 20 and 39 in 2006, according to the American Society of Plastic Surgeons. Breast augmentation was the most popular surgery for women in that age group while tummy tuck and breast lift ranked fourth and fifth, respectively. Overall, the statistics show an 11 percent increase from the number of surgeries performed in 2005. Studies also show that most women who choose to undergo plastic surgery are in their thirties and forties, educated, and coming from all income levels.

Among Men Although men still comprise only 12% of all cosmetic surgery patients, a growing number are seeking minimally invasive procedures to take the edge off aging. From 2000 to 2005, the number of men seeking these procedures increased 44% to 911,850, according to the American Society of Plastic Surgery.

Among Teens The number of teens who choose to get plastic surgery is on the rise. According to the ASPS, over 333,000 people 18 years and younger had plastic surgery in 2005, up from about 306,000 in 2000.

Bariatric Surgery Trends As the rate of obesity has steadily increased across all age groups in the U.S., so has Americans' willingness to turn to bariatric surgery to address the problem of severe obesity. The market for bariatric surgery is enormous; with only 1% to 2% of morbidly obese candidates having undergone weight loss surgery. Yet, despite the need, insurance companies (especially HMO plans) and self-insured employers in many parts of the nation are drastically curtailing or excluding coverage for bariatric surgery, as the market size of eligible candidates is too large. Candidates for bariatric procedures are often elderly, physically unable to travel long distances, or unable to obtain coverage by their medical providers. The affordable services of Offshore Health Solutions and close proximity offers tremendous advantages for people seeking bariatric treatment. Sample Services (initial)

Operations

  • Total Knee Replacement
  • Total Hip Replacement
  • Hip Resurfacing
  • Breast Augmentation
  • Face Lift
  • Rhinoplasty
  • Liposuction

Procedures

  • Botox
  • Lasik
  • Laser Hair Removal
  • Chemical Peel
  • Hyaluronic Acid
  • Micro Dermabrasion
  • Dermal Fillers
  • Porcelain Dental Veneer

Other On-board Activities and Services

Offshore Health Solutions will offer a variety of health solutions and coordinate on-board activities and infrastructure with the various cruise lines:

  • Health food store with OHS approved products
  • On-board on-call pharmacist/nutritionist
  • Coordinated health and diet maintenance
  • Coordinated gym and physical activities/therapies

Capitalizing on the tax benefits of foreign registry, cruise ships today can offer a world-class resort experience at a fraction of the cost of their land based counterparts. Today, these “floating resorts”, provide a plethora of onboard and onshore activities. From world-class spas to Vegas style casinos, cruise ships offer a truly unique experience.

In keeping with this trend, OHS will offer numerous onboard activities to keep passengers entertained from sunup to sundown. Whether seeking relaxation, entertainment or adventure, passengers are certain to disembark with a smile on their face. The ship’s core entertainment facilities for larger vessels and structures will include a gym, world-class spa, and outdoor pool.

Operational Framework

Executive Office

Training, operational support, overall vision and structure of franchise and all of its components.

CEO answerable to Las Portadas (actions and decisions may be vetoed by 40% of BOI, HLR, GCI, or CUALP)

Financial Office

Financial analyses, payment structures, marketing, pricing

Medical Informatics Office

Availability of medical records, procedures, outsourcing resources

Actuary

Advises underwriters regarding mathematical feasibility of coverages

Area Representation

Government and legal interface issues

Master Franchisee

Unit Franchisee

Each Unit Franchisee will be limited to one vessel or stead.

Franchisees of Offshore Health Solutions will provide patients with access to the same quality medical procedures as those available on the mainland at a fraction of the cost. To do this, the Franchisee will:

A. employ U.S. trained and certified foreign physicians/surgeons, and

B. operate in international waters.

In doing so, Offshore Health Solutions circumvents U.S. medical and legal constraints, reducing patient expenses and putting malpractice liability directly into the more practical hands of underwriters and management.

The franchisee's staffing requirements will include a medical staff, comprised of physicians, surgeons, nurses, orderlies and therapists. The medical staff oversees all medical activity onboard the vessel or structure. We intend to recruit foreign national individuals who are U.S. trained and practiced and/or certified by OHS. However, the staff will largely consist of professionals from foreign countries (i.e. India, Thailand, Philippines) due to the enormous savings in labor costs associated with employing foreign labor. Doctor salaries in India are a mere fraction of those in the U.S. In an expensive city like Bangalore, the average monthly salary of a specialist is $700. Even prestigious hospitals do not offer more than $1200 a month.

We estimate that the average monthly salary for a full-time doctor onboard a typical OHS vessel will be approximately US $750; $375 for part-time doctors; and $250 for nurses.

The Market

American consumers are the prime growth force behind medical tourism. As many as 750,000 sought offshore medical care in 2007, spending an estimated $2 B.

Current Healthcare System

US health care spending continues to rise at the fastest rate in history.

In 2007, total national health expenditures increased 6.9 percent — two times the rate of inflation. Total spending was $2.3 T in 2007, or $7600 per person. Total health care spending represented 16 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.2 T in 2016, or 20 percent of GDP.

In 2007, employer health insurance premiums increased 6.1 percent - two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. The annual premium for single coverage averaged over $4,400.

Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

Business Drivers

The number of Americans heading abroad for medical procedures is surging as domestic medical costs reach unaffordable levels. Mexico has long attracted American travelers looking for cutrate cosmetic surgery or dental work, and countries like India, Malaysia, Thailand and the Philippines continue to lure medical tourists as well. Last year, India attracted 150,000 medical tourists from the United States, Britain, Africa and elsewhere in South Asia, largely by offering an enticing trio of advantages: highly trained English-speaking doctors, quick appointments and bargain-basement prices.

The benefits of medical tourism are compelling.

  • Potential Savings - The driving force behind the medical tourism market is the potential

cost savings. For those without insurance or those needing operations that insurance won't cover, medical tourism can be an affordable alternative to the skyrocketing costs of health care. Costs for major surgeries in the United States can run into the hundreds of thousands of dollars while the same surgery in a country like India or Thailand can be as little as a tenth of that.

  • Shorter Waits - Even people who live in countries with public health care coverage (UK

and Canada) often choose to take their treatment abroad as overburdened hospitals and doctors can have long waiting periods for surgeries on conditions that are not lifethreatening.

  • Quality - Many of the countries where medical tourism has become popular have made

significant investments in the industry to ensure that patients are happy and healthy. Many doctors have been trained abroad, and some are leaders in their fields.

  • Relaxing Recovery - Traveling for medical treatment offers the added benefit of a

relaxing vacation while in recovery.

  • Growing Insurance Coverage - An increasing number of insurance providers are

offering coverage for foreign medical alternatives provided that it isn't an elective procedure.

  • Bring Friends and Family - Because of the significant cost savings on treatment abroad,

it is often possible to bring others along and still spend less.

  • World Class Facilities and Equipment - With medical tourism growing rapidly,

hospitals are making big investments in equipment and technology to help them draw more patients.

  • Package Deals – Several companies specialize in providing patients with not only their

treatment, but vacations afterwards, travel to and from the airport and all of the accommodations needed.

  • Surgical Options - While the most popular options with medical tourists are cosmetic

and dental surgeries, there is a growing market for a wide variety of procedures including heart surgery and orthopedic hip and knee replacements.

  • Luxury Accommodations - Many hospitals that cater to medical tourists are corporately

owned and therefore are in staunch competition with other hospitals to draw you in to their facilities.

  • Service - Patients can usually expect a high level of personal care and attention from

hospitals and clinics that are popular with medical tourists.

  • Travel is Affordable - While fuel costs have risen in the past few years, air travel is still

an affordable and relatively convenient way to travel.

Facts and Figures

In the United States, an estimated 49 MM people are without health insurance and 120 MM are without dental coverage - numbers that are both expected to grow. Countries like Britain and Canada have public health care systems plagued by long waiting lists for most major surgeries. This stimulates the need for foreign health care alternatives.

In addition, the high cost of the U.S. health care system has put many US businesses at a competitive disadvantage with foreign firms. The US automotive industry is the poster child for the dilemma posed by high employee medical costs: GM, Ford, and Chrysler's medical costs amount to $1,000 to $1,500 per sold car, which greatly exceeds the medical costs for Japanese, Korean, and European competitors. Simply put, countries such as India, Thailand, Mexico, and Costa Rica can provide equivalent healthcare treatment at much lower prices than in the United States.

The cost of surgery in India, Thailand or South Africa can be one-tenth of what it is in the United States or Western Europe, and sometimes even less. A heart-valve replacement that would cost $200,000 or more in the U.S., for example, can be had for $10,000 in India--and that includes round-trip airfare and a brief vacation package. Similarly, a metal-free dental bridge worth $5,500 in the U.S. costs $500 in India, a knee replacement in Thailand with six days of physical therapy costs about one-fourth of what it would in the States, and Lasik eye surgery worth $3,700 in the U.S. is available in many other countries for only $730. Cosmetic surgery savings are even greater: A full facelift that would cost $20,000 in the U.S. runs about $1,250 in South Africa.

Faced with surging global popularity, numerous countries are creating options for this lucrative market including: Argentina, Costa Rica, Cuba, Jamaica, South Africa, Jordan, Malaysia, Hungary, Latvia and Estonia.

Future Outlook

Employers make a push for 'medical tourism'

U.S. health care costs have gotten so outrageous that some small employers save money by flying workers to foreign countries for inexpensive medical procedures.

Until recently, medical tourists were mostly individuals seeking low-priced cosmetic and elective surgery not covered by insurance. But more than one million Americans will travel overseas for procedures this year, and a rising proportion are getting insurers or employers to pay part of the cost.

While global medical tourism has yet to make major inroads with U.S. employers, some small employers and benefit providers such as BlueShield and BlueCross are starting to take the idea seriously. Experts predict that the medical tourism industry will grow to $40 B by 2010.

Medical tourism will grow regardless of possible U.S. universal health plan.

While president Obama is calling for a universal healthcare system, experts predict the adoption of a universal health plan will not affect medical tourism. The industry will continue to grow for the same reasons it is growing in countries like UK and Canada.

The demand simply outstrips the supply. Medical tourists will continue to use foreign alternatives to avoid long waiting periods, and save on costly elective procedures that are not covered by any healthcare plan.

Insurance companies are beginning to embrace ‘Medical Tourism.’

According to David Boucher, an assistant vice-president of health-care services at Blue Cross & Blue Shield of South Carolina, Blue Cross and other insurers would like to see more policyholders traveling abroad for medical care. “As healthcare costs continue to rise in the U.S., medical travel is going to be part of the solution.”

Like manufacturing facilities and call centers, health care is moving offshore. According to Jonathan Edelheit, president of the Medical Tourism Assn., “All of the largest U.S. insurers are starting to educate themselves or are putting [offshore] programs in place.”

Insurance companies could waive all deductibles and co-pays, offer to cover travel costs for the patient and family members, even throw in a cash incentive, and still save tens of thousands of dollars.

Blue Cross took the lead in medical “offshoring” when its Companion Global Healthcare subsidiary formed its first partnership, with Bumrungrad Hospital (Bangkok, Thailand), in February 2008. Since then, Companion Global Healthcare has signed similar pacts with the Parkway Group Healthcare, owner of three hospitals in Singapore, and with hospitals in Turkey, Ireland, and Costa Rica. Three members of India's Apollo Hospitals Group are also joining the network. And another large Indian chain, Wockhardt Hospitals, is working with U.S. insurers as well.

Charles Cutler of Aetna notes that the savings for his firm are not as great as they may be for some others, since it gets volume discounts from American hospitals thanks to its size. Travel abroad for Aetna’s clients makes sense only for procedures costing $20,000 or more, which might include heart and orthopedic surgeries. He remains bullish, observing that quality at the best foreign facilities can be much better than at the average American hospital, thanks to greater transparency and better information technology. He thinks this is inspired by the Asian hospitals’ need to market to a skeptical foreign audience.

The Booming Cruise Ship Industry

The Cruise Industry is the fastest growing sector of the Travel Industry. Its economic benefit to the US economy was estimated at $35.7 B in 2006. An estimated 12.5 MM people took a cruise in 2007; up nearly half a million from 2006.

The number of new ships continues to grow, reflecting optimism about the future. Nearly 40 ships were built in the 1980s; nearly 80 in the 1990s, and roughly 100 new ships will have been introduced since 2000. Additionally, there are an increasing number of small niche operations, catering to more specific markets. Overall, the market is by no means exhausted; only about 17 percent of US adults have taken a cruise.

The average cruiser is now 49 years of age, down from the stereotype "older" market of the past. Average household income of cruisers is $104,000. Florida, California, and Texas are the big three states for cruise patrons.

Cruise Vacation as an Ideal Solution for Recuperation

Increasingly, medical tourism operators are emphasizing the vacation aspect of the medical tourism excursion to lure patients to their facilities. By way of example, some destinations in Africa offer safaris, a few in Thailand offer jungle excursions, and several in India provide daytrips to the Taj Mahal.

In recent years the cruise experience has become increasingly luxurious. Major cruise lines now offer larger rooms, bigger beds, and marble lined bathrooms. In addition, many staterooms now include butler services.

The newest addition in cruise line luxury is the spa-focused retreat. Carnival Cruises is introducing the line's first spa staterooms, with private access to a luxurious 6,400-square-meter spa. Cruises have become the ideal recuperation experience; with therapeutic spas, world-class entertainment, and 5-star dining, surrounded by the calm of the sea.

Cruising is considered to be one of the most comfortable holiday options. Compared with other types of vacations, cruising has the highest percentage of extremely satisfied customers (45%), outpacing all-inclusive resorts (42%) and visiting friends and relatives (40%). 82% of cruisers gave the industry high marks and ratings fell in the ‘very’ satisfied and ‘extremely’ satisfied categories. Moreover, the comfort level associated with cruising is also high as compared with other vacation alternatives. About 57% of respondents in a survey stated that cruises are superior to other types of vacations in terms of overall pampering, and about 52% of people rated it as the most luxurious vacation option.

Economics

Product

Customers

Competition

Basis of Competition

As noted above, numerous countries are entering into the lucrative medical tourism industry. Each country seems to specialize in a given area of medicine, with one or more reputable establishments catering to medical tourists. However, despite the size of the competitive landscape, the number of prominent facilities remains small.

Competitive Landscape - Hospitals

Direct Competitors

  • Anadolu Medical Center - Istanbul, Turkey
  • Blackrock Clinic - Dublin, Ireland
  • Bumrungrad International Medical Center - Bangkok, Thailand
  • Hospital Clínica Bíblica - San José, Costa Rica
  • Parkway Group Healthcare - Singapore

Indirect Competitors

  • Apollo Hospitals Group – Major player throughout Asia
  • Wockhardt Hospitals – Major player in India

Competitive Landscape - Cruise Lines (Indirect)

The operators listed below are the Who’s Who of the cruise line business but since none in the Medical Tourism space, these are, at most, indirect competitors.

Royal Caribbean

Also operates:

  • Celebrity Cruises
  • Pullmantur Cruises
  • Azamara Cruises
  • Partial ownership of Island Cruises

Carnival Cruise Line

Affiliates include:

  • Holland America Line
  • Princess Cruises
  • Cunard Line
  • Costa Cruises
  • Yachts of Seabourn

Star Cruises

50% stake in:

  • Norwegian Cruise Line
  • NCL America

Direct Competitor Profiles

While there are countless players in the medical tourism industry, there are several that have distinguished themselves as leaders in the field. These hospitals serve international patients and have received accreditation by the Joint Commission International, demonstrating a commitment to meeting the highest standards of care. These hospitals have also established partnerships with the overseas hospital network of Companion Global Healthcare Inc.

Bumrungrad International Medical Center - Bangkok, Thailand

Bumrungrad Hospital Public Company Limited, through its subsidiaries, operates hospitals and health care centers primarily in Thailand. It offers various medical services, which include treatments and procedures, such as cosmetic surgery, reconstructive surgery, skin treatment, and hair transplantation. The company operates various health care centers for allergy, children, dental care, diabetes, diagnostic and therapeutics, dialysis, digestive disease, emergency, eye and eye laser refraction, health screening, heart, orthopedics, plastic surgery, rehabilitation, skin and skin laser, sleep disorders, and women’s health centers. It also operates medical clinics and surgical clinics. In addition, the company invests in other companies, as well as engages in the rental of properties service. Bumrungrad Hospital was founded in 1980 and is based in Bangkok, Thailand.

Bumrungrad Hospital Public Co. Ltd. is preparing to invest THB 3.3 billion (US$103.14 million) over the next three to five years to expand and renovate the country's largest private hospital complex. The goal is to provide a balance of services between inpatients and outpatients, as the company is also expanding outpatient service capacity from 3,500 to 6,000 patients per day over the next five years.

Parkway Group Healthcare Pte Ltd. – The United Kingdom, Singapore, Malaysia, India, and Brunei

Parkway Group Healthcare Pte Ltd. operates a network of private hospitals across South East Asia and the United Kingdom. The Company provides laboratory services, health plan services and primary healthcare such as screening, maternity, diagnostics and various surgery operations. The group has established a website to provide users with information, online appointment booking and a direct link to the group’s hospitals network. The company is based in Singapore, Singapore.

Parkway's other healthcare networks include Parkway Shenton Medical Group, one of Singapore's biggest providers of general practice services; Medi-Rad Associates, a leading radiology services provider; and Parkway Laboratory Services, a major provider of laboratory services.

Parkway Group Healthcare Pte Ltd is looking to invest in Khubchandani Hospitals and pick up its 50% stake for INR 1.55 billion (≈US$37 MM). Koncentric Investments will hold the remaining 50% stake in the firm which plans to set up chain of hospitals and healthcare facilities in India.

Anadolu Medical Center - Istanbul, Turkey

Anadolu Medical Center is a not-for-profit multi-specialty medical service provider based in Istanbul, Turkey. The hospital has been operating since 2005. It offers treatments in oncology, cardiology, ophthalmology, endocrinology, gastroenterology, rheumatology, nephrology, dermatology, and neurology among others. Patients can expect savings of up to 50%-80% from typical US prices.

AMC is a JCI-accredited hospital affiliated with Johns Hopkins Medicine. AMC serves patients from over 40 countries. 35% of its physicians are board certified in the United States.

With 209 beds and nearly 100 physicians, Anadolu has been recognized as a Designated Center of Integrated Oncology and Palliative Care by the European Society for Medical Oncology.

Anadolu Medical Center has joined with Healthbase Online Inc., a Boston-based medical tourism facilitator.

Blackrock Clinic - Dublin, Ireland

Blackrock Clinic came into operation in 1984 with the opening of an out patient complex. The hospital has both private rooms and a small number of semi-private rooms. It also includes a Coronary Care Unit and Intensive Care Unit, a Day Care Facility and an Oncology Day Ward. The services of the hospital involve the treatment and care of the acute medical, surgical and dental patient.

Blackrock Clinic Limited reported earnings results for the year 2006. For the year, the company reported profit rose 34% to €10.3 million on turnover of €77.4 million. The company attributes the rise in turnover to significant investment in new and existing services. The company paid dividends of €4.2 million, up from €3.64 million in 2006.

Blackrock Clinic Limited in Dublin revealed plans for a EUR 100 million expansion that will see a 42% increase in the number of beds. The private hospital's expansion will include a threestorey extension to the existing facility and a multi-storey car park. When completed, the total 18 number of beds at the clinic will be 160 and all patients will be accommodated in single rooms. Under the plans, there will also be two new operating theatres and a daycare floor. The expansion is expected to create 100 clinical and administration jobs in the hospital, bringing total employment to 650 people.

Hospital Clínica Bíblica - San José, Costa Rica

Hospital Clínica Bíblica is the largest private hospital in Costa Rica. Founded in 1929, is leading private medical center in the Central American region; offering world-class medical services. Around 50% of the staff has undergone training in the US. The hospital boasts a 50 million dollar infrastructure, including a new 35 million dollar hospital building. Its offering covers orthopedic and bariatric surgeries, to reparative and restorative treatments like LASIK, cosmetic/plastic and dental surgeries.

HCB is in the process of obtaining the Joint Commission International Accreditation (JCI). The hospital is affiliated with the Ochsner Medical Institute & Tulane University School of Medicine in the United States.

Hospital Clínica Bíblica has partnered with Healthbase Online Inc.


Competitive Advantages

For Patients, Guests, Investors, and Offshore Health Solutions

Offshore Health Solutions has numerous advantages for patients and their families, investors and the Company.

Patients are provided with a domestic medical tourism opportunity with pricing competitive to foreign alternatives. The close proximity to the U.S. and U.K. mainland significantly reduces flight times and costs, making it easily accessible for individuals who are unable to travel long distances. In addition, Offshore Health Solutions will blend a first-world feel with luxury, provided a familiar and comfortable experience for those who are wary of third-world travel.

As a luxury cruise ship franchise, Offshore Health Solutions is much more than a hospital. SC will provide patients and their families with an exciting vacation experience. Activities will keep guests entertained around the clock.

Both the investor and the Company will profit from the ingenuity of the Offshore Health Solutions business model. By design, OHS minimizes labor costs, tax obligations, and legal liability, creating a highly lucrative opportunity.

Legal Advantages

Lower taxes

Because countries actively compete for Cruise Ship registration they provide amazing tax benefits on foreign derived income. Panama, the largest and most respected registry, charges no taxes on foreign income.

Less Regulation

Offshore Health Solutions can deliver any medical care approved in the country of registry. Regulation is nearly nonexistent in Panama and Liberia.

Favorable Tort Law

International Maritime law requires that lawsuits be brought in the country of registry. This is a legal nightmare for U.S. lawyers. Additionally, the tort law system in Panama and Liberia provide significant protection to ship owners.

Lower cost labor with no immigration hassles

Thailand, India, and the Philippines all provide medical professionals with training and expertise comparable to their US counterparts.

Provide cutting edge treatments

The FDA does not govern treatments delivered in international waters.

Advantages of Business Structure and Operational Location

  • Access to onshore medical facilities: Close proximity to the coastline puts the services offered by Offshore Health Solutions within minutes of major hospitals.
  • Clean Slate: Offshore Health Solutions is a new concept and has the opportunity to set a reputation for high quality care at a reasonable price.
  • Avoids the Third World Stigma: As a service provided on luxury cruise liners, near to the coast of first world countries, Offshore Health Solutions will attract patients that are skeptical of third world services.
  • Convenience: For many individuals with health problems, travel overseas is simply not an option. With a home base just a few miles off the Coast, Offshore Health Solutions can distinguish itself as the only domestic alternative in the medical tourism market.
  • Comfort: Eradicates culture shock and language barriers.

Ability to Counter Disadvantages

While the popularity of medical tourism is clearly on the rise, there are still disadvantages that dissuade would-be patients from traveling abroad. Offshore Health Solutions is an optimal solution to each.

Disadvantage 1

A large percentage of medical tourists travel to save on elective surgeries and procedures that public and private healthcare systems typically refuse to cover. Additionally, while showing increasing interest, healthcare providers have been hesitant to cover medical services rendered overseas. As a result, many medical tourists are forced to pay out of pocket.

OHS Solution:

  • OHS domestic location, significantly reduces travel expenses
  • There are no currency conversion hassles
  • Avoids the third world altogether, reducing the likelihood of being mugged, robbed or

kidnapped.

  • Low travel expenses and reduced medical costs may entice insurance providers to cover

patient expenses more willingly than with overseas alternatives.

Disadvantage 2

There is little follow-up care. Complications, side-effects and post-operative care become the responsibility of the health care system in the patient’s home country. OHS Solution:

  • In the event that it is required, OHS domestic location allows for affordable follow-up

care

Disadvantage 3

Patients may struggle to find U.S. doctors willing to take on after-surgery care once they return home.

OHS Solution:

  • By avoiding the third world stigma, patients are more likely to find a U.S. doctor willing

to provide after-surgery care.

  • OHS will pursue partnerships with major US and Mexican hospitals to provide emergency

and after-surgery care.

Disadvantage 4

There are growing accusations that private-sector medical tourism is drawing medical resources and personnel away from the local population.

OHS Solution:

  • Offshore Health Solutions serves the U.S. population and has no medical obligations to any other

country.

  • A foreign physician or surgeon working upon a vessel or structure through Offshore Health Solutions is no different than one

working in a U.S. based hospital.

Niche

Strategy

Given the numerous competitive advantages of the Offshore Health Solutions venture, and the enormity of the booming medical tourism market, Management believes demand will be enormous. As such, the Company will devise a marketing strategy that fosters demand at a rate that can be supplied. It is believed that an initial online/offline regional marketing approach will provide the needed traction and acceleration to situate Offshore Health Solutions as a dominant player in the industry.

The initial campaign will target the medical tourism market in Southern Florida; incorporating, T.V., Radio, Direct Mail, and Print (magazines, journals, flyers and billboards) all at the regional level.

Management will also evaluate and engage national online/offline marketing tactics if deemed necessary.

Management may contract a marketing firm to handle and oversee its marketing campaign. Additionally, OHS may employ an in-house CMO (Chief Marketing Officer) to work in conjunction with an outside marketing firm to define messaging, and increase exposure and brand recognition.

See attached preliminary marketing plans.

Promotion

Promotional Budget

Pricing

lease valuation procedure

Medical

The model projects revenues from the operating rooms and procedure rooms based on appropriate procedures, the time needed for those procedures and the US pricing of those procedures.

To determine the cost structure of the operation, we examined publicly traded companies in medical tourism.

Medical Tourism costs include medical staff, consumables, etc. The model eliminates the building costs of land-based hospitals.

Alliances

With Medical Travel Agencies

Healthbase - Boston, Massachusetts

Healthbase, a Boston-based medical tourism facilitator, connects patients to leading hospitals around the world, through a secure web portal. Healthbase’s partner hospitals are located in India, Singapore, Thailand, Mexico, Panama and Turkey, and its network is expanding to Costa Rica, Argentina, Brazil, Belgium and Malaysia. Healthbase only works with hospitals that have international accreditations like JCI, JCAHO, and ISO.

Med Retreat - Odenton, Maryland

Partnered with cosmetic surgery facilities in Brazil, Thailand, and Turkey

Global Choice Healthcare - Albuquerque, New Mexico

Partnered with facilities in Costa Rica, India, Panama, and Singapore

Planet Hospital - Los Angeles

Specializing in negotiations with US employers and health insurers

With Insurance Companies

Companion Global Healthcare

Companion Global Healthcare provides streamlined access to top-rated medical facilities for those who elect to travel abroad for health care. The company provides a single launch point for appointments, information, travel services, case management and follow-up care in the United States. Companion Global Healthcare also serves the uninsured, and is available to contract with insurance companies and employer groups that wish to include an overseas option in their health benefit plans. Companion Global Healthcare's network includes: Bumrungrad International Hospital in Bangkok, Thailand; Anadolu Medical Center in Istanbul, Turkey; Parkway Group Healthcare Pte Ltd. in South East Asia and the United Kingdom; Hospital Clínica Bíblica in San José, Costa Rica; and the Blackrock Clinic of Dublin, Ireland. Companion Global Healthcare is also considering a partnership with Apollo Hospitals Group, operating throughout Asia.

Global Protective Solutions

Available from Custom Assurance Placements, LTD, Global Protective Solutions provides benefits for participating medical tourists or medical travelers from almost any country for accidents and complications. In addition GPS has the first liability insurance coverage related to medical tourism for either the facilitator or the employer.

Expansion

Purchase of Cruise Ships

In recent years the Cruise Ship Industry has undergone vast changes in a shift to reinvigorate the market and increase profitability. Today’s cruise lines are defined by the constant introduction of mega-tonnage vessels exceeding 150,000 GT and over 1,000 feet in length.

This trend has sparked the rapid removal of older ships from the fleets of the major operators. In short order, Princess removed the original Fair and Dawn Princesses from its fleet; Carnival removed the Mardi Gras, Carnivale, and Festivale; and Celebrity removed the Meridian. These veteran vessels have either been laid-up, or purchased by operators in Europe and Asia.

These trends have spelled the end for smaller cruise operators who have failed to transform and establish niche operations. However, for operators like Offshore Health Solutions, offering unique or customized experiences, the transition of the industry is a blessing. There are currently 230 retired cruise ships and an additional 49 laid-up ships available for purchase.

With respect to Offshore Health Solutions, we will be seeking smaller tonnage vessels capable of providing services to approximately 700 passengers.

The vessels will sail to a foreign shipping yard where the ship will be repurposed to function as a hospital/cruise ship.

For this type of expanded franchisee, the staff will be dramatically increased to allow cruise operations.

We will contract a shipyard to refit the vessel into a medical cruise ship. This process will likely take 3 to 6 months; during which time, the ship will have the operating suite installed.

See Appendices for financial data regarding ship purchase and refitting.

Management will evaluate the many factors that go into choosing a shipyard. These factors include: reputation, availability, price and delivery terms.

Quality assurance is provided by the use of classification societies. These include: Lloyd’s Register (UK), Germanischer Lloyd (Germany), Det Norske Veritas (Norway), NKK (Japan), and American Bureau of Shipping (U.S.). The classification society approves the design and inspects and reports on the building process, ensuring that it meets minimum standards.

The cruise ship construction industry is currently dominated by four shipyards in Europe that have maintained an 84% market share since 2002. Fincantieri of Italy is the market leader with 34% of the market, followed by Kvaerner Masa-Yards of Finland with 20%, and Meyer Werft of Germany and Atlantic Container Line of France, both with 15%.

China, Japan, and South Korea are the leading Asian players in the commercial ship building industry. Some of the leading Asian shipyards include Korea's Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering.

Seasteads

Sales Forecast

Operational Plan

Legal Environment

Management and Organization

Professional and Advisory Support

  • Management advisory board
  • Legal counsel
  • Financial strategist
  • Insurance agencies
  • Banker
  • Consultants
  • Mentors and key advisors

Financial Model

Start up costs and capital projection

Break even

Cash flow

Return on investment

Unit economics

Franchisor economics

Projected rate of growth for the franchise system

Projected rate of growth for company-owned system

“Cost out" of each material operational, training, legal and marketing obligation included in legal documents

Define what needs to be measured and reported

Assess and determine exit strategies

Threshold Analysis

Gap Analysis

Competitive Analysis

Assessment of each available route to market

Fees

  • Franchise fee (minimal: cost of materials and services provided times two)
  • Royalty (regressive payment structure)
  • A la carte charges (components available for purchase)
  • Fee structure per unit
  • Multi-unit fee structure( for master franchisee?)
  • Advertising (appropriate venues and costs per venue)
  • Etc.

Description of the financial risks and advantages of the expansion models selected

Short term

  • Orthoscopic -> Heart valve replacement, &c
  • On-board Health store/ Pharmacy
  • Lease -> purchase of cabins/zone of ship -> ships

Long term

  • Charter -> purchase of vessel -> vessels
  • Acquisition of cruise line -> lines
  • Participation in construction of fixed ClubStead and/or MedStead on SeaLand
  • Biotech research facility

Acquisition of vessels

In recent years the Cruise Ship Industry has undergone vast changes in a shift to reinvigorate the market and increase profitability. Today’s cruise lines are defined by the constant introduction of mega-tonnage vessels exceeding 150,000 GT and over 1,000 feet in length.

This trend has sparked the rapid removal of older ships from the fleets of the major operators. In short order, Princess removed the original Fair and Dawn Princesses from its fleet; Carnival removed the Mardi Gras, Carnivale, and Festivale; and Celebrity removed the Meridian. These veteran vessels have either been laid-up, or purchased by operators in Europe and Asia.

These trends have spelled the end for smaller cruise operators who have failed to transform and establish niche operations. However, for operators like Offshore Health Solutions, offering unique or customized experiences, the transition of the industry is a blessing. There are currently 230 retired cruise ships and an additional 49 laid-up ships available for purchase.

With respect to purchase of vessels by Offshore Health Solutions franchisees, we will initially be seeking smaller tonnage vessels capable of providing services to approximately 700 passengers.

Following the purchase or lease, the franchisee vessel will sail to a foreign shipping yard and retrofit the ship to function as a hospital/cruise ship.

Refitting

We will contract a shipyard to refit the vessel into a medical cruise ship. This process will likely take 3 to 6 months; during which time, the ship will have the operating suite installed.

See Appendices for financial data regarding ship purchase and refitting.

Choice of Ship Yard

Management will evaluate the many factors that go into choosing a shipyard. These factors include: reputation, availability, price and delivery terms

Quality assurance is provided by the use of classification societies. These include: Lloyd’s Register (UK), Germanischer Lloyd (Germany), Det Norske Veritas (Norway), NKK (Japan), and American Bureau of Shipping (U.S.). The classification society approves the design and inspects and reports on the building process, ensuring that it meets minimum standards.

Leading shipyards

The cruise ship construction industry is currently dominated by four shipyards in Europe that have maintained an 84% market share since 2002. Fincantieri of Italy is the market leader with 34% of the market, followed by Kvaerner Masa-Yards of Finland with 20%, and Meyer Werft of Germany and Atlantic Container Line of France, both with 15%.

Asian shipyards

China, Japan, and South Korea are the leading Asian players in the commercial ship building industry. Some of the leading Asian shipyards include Korea's Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering.

Return on Investment

At capacity, each dedicated cruise ship is projected to produce $95MM in profits annually. Current cruise lines and traditional medical tourist hospitals have a multiple of 9 for their stock price, and these are stable businesses. So a single ship would support a corporate valuation of more than $1B and have the added benefit of providing enough cash flow to purchase and launch more ships. The medical market is far larger than the travel and leisure market and should support a fleet of more than 25 vessels of the size of the original ship. This would allow Offshore Health Solutions to earn a valuation of more than $25B and would be in line with the current valuation of Carnival Cruise Lines.

Overall the health care market is very large (over $2T) and Offshore Health Solutions will be well positioned to expand its offerings and fleet to take a large share of the elective procedure market and expand into additional health care markets.

Financing Programs

Unit Financial Plan Format

Personal Financial Statement

Startup Expenses and Capitalization

12-Month Profit and Loss Projection

Four-Year Profit Projection

Projected Cash Flow

Opening Day Balance Sheet

Break-Even Analysis

Exhibits

Brochures and advertising materials

Industry studies

Blueprints of vessels

Stock

Renovated

Wave maps of location

Magazine or other articles

Detailed lists of equipment owned or to be purchased

Copies of leases and contracts

Letters of support from future customers

Any other materials needed to support the assumptions in this plan

Market research studies

List of assets available as collateral for a loan

See also

Guiding principles