The Independent Hospital Sector. Jill Watts, CEO, Ramsay Health Care, UK Investing in Healthcare Conference 29 October 2008

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1 The Independent Hospital Sector Jill Watts, CEO, Ramsay Health Care, UK Investing in Healthcare Conference 29 October

2 Agenda Overview of Ramsay Health Care The Independent Hospital Sector UK Market observations Opportunities and Risks for Investors Differences between the UK and Australian sector

3 Ramsay Health Care

4 Ramsay Health Care Established in 1964 by Paul Ramsay celebrating 44 years in the Australian Healthcare industry Listed on Australian Stock Exchange in 1997 Own and operate over 100 hospitals & day surgery facilities across Australia, UK & Indonesia Employs over 25,000 staff across three nations

Theatres 48 11 220 279 Admissions FY08 47,000 36,000 693,000

5 Ramsay Health Care Profile UK Indonesia Australia Total Hospital & Facilities* Beds 1, ,724 8,437 Operating Theatres Admissions FY08 47,000 36, , ,000 *Includes day surgery centres, rehabilitation and psychiatric units

6 Ramsay UK Ramsay acquired Capio UK, in late 2007 Portfolio includes: 23 hospitals 9 day surgery facilities 2 neuro-rehabilitation centres Diagnostic services 4th largest operator of private hospitals in the UK Private hospitals ISTCs Day treatment centre Neuro rehabilitation homes Cobalt Tees Valley Clifton Park Yorkshire Fulwood Park Hill Euxton Hall Renacres Gainsborough Oaklands Boston Rowley Woodland West Midlands Horton Winfield Blakelands Rivers Reading New Hall Ashtead Fitzwilliam Pinehill Oaks Springfield Bromley North Downs Bodmin Duchy Mount Stuart

7 Why the UK Market? Good potential for growth in UK Market and expansion of the independent sector s role in the NHS market was an attraction Private Medical Insurance (PMI) a stable market Capio was seen as a quality group of hospitals and the size of the portfolio a good strategic fit Ability to generate good returns from UK by sharing lessons from the Australian business model UK and Australian markets and culture are very similar

8 Ramsay 1 year on Ramsay s UK presence is growing strongly

9 Security of Funding Refinanced senior debt in November 2007 to accommodate the Capio UK acquisition and provide future growth funds Have committed debt funding to November 2012 Ramsay has a conservative approach to the management of interest rate & currency risk exposures Interest rate exposure on approx 75% of current drawn debt is hedged for periods of 1-4 years and a natural hedge achieved in the UK by financing assets with borrowings Well positioned to weather the impacts of the global credit crunch 9

A Growth Strategy Organic growth Investing in existing business Improving quality of our facilities and acuity of our hospitals Brownfield

10 A Growth Strategy Organic growth Investing in existing business Improving quality of our facilities and acuity of our hospitals Brownfield expansion programme Ramsay have committed to a 17% increase in theatre throughput capacity Capex of 28 million approved over FY09/10 Acquisitions hospitals

11 Independent Hospital Sector in the UK

12 UK Acute Hospital Sector 180 private hospitals and 359 public hospitals Acute Sector dominated by five key operators, GHG, Spire, Nuffield, Ramsay and HCA 13% of population covered by PMI 1.8 million covered by individual insurance 4.8 million covered by group polices Consolidated PMI market with top 10 providers accounting for 85% of market Increasing shift of NHS work to the private sector

13 UK Private Health Expenditure Source OECD Health Data 2008

14 Independent Sector and NHS Care Provision (ISTC wave 1 sites)

15 Independent Sector and NHS Care Provision (ISTC phase 2)

16 Independent Sector and NHS Care Provision (ECN sites) 139 sites approved to list services through the Extended Choice Network

17 UK Market Observations

growing NHS committed to pluralism and creating competition within

18 UK Market Observations Strong industry fundamentals with ageing population and increasing life expectancy Robust PMI market still growing NHS committed to pluralism and creating competition within the marketplace Growing distinction between PCT Commissioner and Provider roles

April Ramsay NHS activity has increased 237% in past year and is now nearly

19 Growth of Free Choice Irreversible shift in the landscape with the introduction of Free Choice Referrals to the independent sector up 60% since 1 April Ramsay NHS activity has increased 237% in past year and is now nearly one third of our UK activity Effective differentiation is critical for the Independent Sector

20 The Patient Perspective Satisfied patients are a critical part of our success ISTC Patient Satisfaction at 97% ISTC clinical outcomes same as or better than NHS for all procedures Independent Sector MRSA rates negligible The NHS partners network the taking a lead role in driving the Clinical Outcome agenda benchmarking data across the IS/NHS

21 Opportunities and Risks

22 The Next 3 Years- Opportunities Growth of the NHS and Patient choice Strengthening the PMI and self insurance product and introdcuing new products Investment in facilities and differentiation - giving consumers more reasons to use private healthcare facilities Marketing of the independent sector and education of consumers and GPs Introduction of new care delivery models - driving greater efficiencies and productivity Working with the NHS and key stakeholders to allay fears of the independent sector being seen as a threat Influencing policy eg Standard contracts, tariff, workforce mobility 22

23 The Next 3 Years - Risks Credit crunch and lack of investment back into the industry PMI and NHS Tariff Industry inability to implement new models of care or change cost structure The speed at which the NHS can drive change Local political agendas and transfer of NHS bureaucracy to the IS Continuity of ISTCs beyond their initial contract term? Ignoring patient satisfaction drivers and inability to effectively differentiation our products Over regulation of the private sector

24 The Ramsay outlook on the UK Independent Sector A commitment from the top Ramsay has not looked back since entering the UK market. Government reform of the UK health care system has opened the private hospital market to everyone and we are excited about the opportunities this presents. Our confidence in this market is driving expansion of Ramsay UK. We will continue to look for capacity expansion and bolt-on acquisition opportunities that will add value to our business. Paul Ramsay, Chairman Annual Report 2008

25 Thank You

Acquisition of Capio UK 7 September 2007 Managing Director, Pat Grier

Acquisition of Capio UK 7 September 2007 Managing Director, Pat Grier AGENDA 2 Executive Summary Why the UK Hospital Sector? Capio UK Business Overview Transaction Overview Financials Compelling Proposition