Healthcare Discussion: The Return to Electives

June 2020

John Soden: This is John Soden. I co-lead the Medical Technologies Practice at Cain Brothers. I am here with a few of my colleagues to discuss a topic that has dominated discussions both for medical products companies as well as for healthcare providers and practices: What is the likely level that elected procedures will return to, and how quickly? And what are some of the mitigating factors that may slow it down?

With me today are:

Dave Morlock. Dave focuses on health systems and was also a CEO and CFO at some major health systems. He has very unique insights into how operators think.

Jamie King, who primarily focuses on ambulatory surgery centers (ASCs). Jamie also has the benefit of working with health systems, multisite providers and physician groups.

Wyatt Ritchie. Wyatt focuses his work entirely on physician groups and multi-site providers.

So we have a real diversity of views that cover all sorts of providers. Gentlemen, thank you for joining. The key question that I think everyone has is what are you seeing out there with respect to your clients and prospective clients in terms of where we are today with the rebound in elective procedure activity, and where do you see it going to over the medium term and longer term? Wyatt, I'll start with you.

Wyatt Ritchie: There is optimism and it is wide ranging. For example, in talking to some of the dental practices, they're probably in the 40-to-50% of pre-COVID levels as those markets have opened, whereas other practice areas with a chronic care aspect are already operating at pre-COVID levels. A good example is ophthalmology, and in particular retina, which has a more chronic care aspect to it. So, it's a massive range. I would say 100% is more unusual. What we're typically seeing is folks in the 70-to-80% range as markets have opened, but there's more to come. But there's general optimism around where they thought they'd be as to where they are.

Jamie King: Generally, ASC volumes were down as much as 80-90% in April and May, with most being closed or only open one day a week. I think the scale and magnitude for how quickly they come back really depends on some of the specialties and some of the local dynamics with how quickly the governors are reopening things. Most ASCs are starting to ramp back up, some more quickly than others. I think that when you look at the ASC operators and their general expectations for volumes climbing back up to pre-COVID levels, they see that coming back in the next three-to-six months. And some of those specialties are going to come back faster than others. I think GI is one specialty that volume will probably return at a slower pace, especially with cases like routine colonoscopies and those types of things, which people aren't going to be rushing back to do quickly. With orthopedics, generally speaking, that's one where it's harder for folks to put those types of procedures off.

David Morlock: We've talked with dozens of hospitals and health systems, and also had the opportunity to read through a number of significant surveys in the hospital space conducted by the Commonwealth Fund, the Kaiser Family Foundation, and HFMA. These organizations have interviewed hundreds of hospitals and health systems . What we have seen is that at the trough, in mid-April or so, folks were off by 60% or more in their patient volumes. In the markets where folks have reopened the economy, they are seeing a rebound back to approximately 70% of pre COVID levels at this point. In most places, that's only been a few weeks or a month or so since the reopening. More than 80% of the executive surveys suggest that by the end of calendar 2020, they will still be below pre-COVID volumes on a weekly or monthly basis.

And half of those respondents suggest that it's going to be a year or more before they get all the way back to pre-pandemic patient levels. So, in the hospital space, it will be mid-2021 before they rebound. They're also seeing similar suggestions and numbers in the ambulatory space, but it does vary significantly by the type of specialty. For example, in the surgical specialties, other procedural specialties, pediatrics, et cetera, the relative decline remains the largest in those areas. And then the relative decline is smaller in specialties like behavioral health, adult primary care and things like that. It depends on the type of specialty, and a little bit by geography, although not significantly. The coasts and the Northeast have a different curve than the Midwest and the Southeast and the Southwest. But generally speaking, in the hospital and health system space, we are probably looking at a year before we get back to pre-pandemic levels.

John Soden: How does that compare to what occurred after the Financial Crisis?

David Morlock: That's a great question. We saw there was definitely a significant dip driven by folks losing health insurance and the shift to higher deductible health plans that were pretty significant at that time. In those cases, it took several months to get back…up to a year. I don't think that the projections by these hospitals and health systems based on that experience 12 years ago is that far off the mark. It's very similar.

John Soden: There's a lot of optimism by Medtech companies that elective procedures are going to go to 120% of capacity due to pent-up demand. How realistic is this? And what are some of the mitigating factors influencing the return to normalcy?

Jamie King: I think that volumes are generally starting to come back slowly as there clearly is pent up demand there to deal with. And with respect to a longer-term outlook of 120%, I think there are several main factors that will influence the rate at which procedures come back and how much they come back. First, from the surgery center s ide, we're still seeing some shortages of the personal protective equipment, especially for ASCs and physician offices that made donations to the hospitals while back when they were a little bit slower. They are having a harder time getting the supplies back in compared to the larger health systems that may have a little bit more leverage with their supplier relationships. In addition, there's a reluctance from patients to return to a healthcare setting.

There's more reluctance to return to a hospital or a HOPD as compared to an ASC. For freestanding surgery centers, this reluctance may be a little less of an issue than for hospitals that, in the eyes of the patients, may be more directly exposed to COVID patients and risks. Furthermore, there's a reluctance for lower-wage earners to return from unemployment for those that were furloughed or unemployed, because the unemployment benefits are sometimes higher than what they were making before and the risk of COVID does not really outweigh going back to work in a healthcare setting. You're also seeing practice and operational efficiencies that are going to be a bit slower in the short term with increased regulations and appropriate safety measures that are being put in place, and other things that are kind of slowing that return of the volume.

I think even in a few cases, we've heard about issues getting necessary sedation drugs that are in short supply, given that some of those are the same drugs that are used for patients that are on ventilators. Lastly, one of the issues that we're seeing around the return of volume and getting to the 120% number is the broader economic issues. With pressures on volumes driven by the sharp increase in the number of unemployed and uninsured, which includes the ability to pay for elective procedures for even those that have insurance, there is going to be a problem and a mitigating factor for getting procedure volume back. So, I think that while there is a lot of demand there, there's a number of factors that are going to gradually bring that in a little bit more slowly.

We may see a shift for some in the settings for those procedures. For example, the shift to doing procedures in an ASC-based setting versus an HOPD or hospital-based setting, I think that general trend was there before COVID. And I think now that's going to be even more pronounced, especially with the patient safety issues and the perception of ASCs being safer from that perspective. So, you could see a higher volume return in settings like an ASC versus , say, a hospital or a quicker return to those volumes. I don't think there's a lot of expectation to be above where they were pre-COVID by the end of the year. So, it may take a while to get back up to those levels.

John Soden: How are providers facilitating safe operating conditions, both for staff and patients, in order to reinvigorate procedure volume?

Wyatt Ritchie: I think that one of the challenges is around safety. The procedures that a lot of the providers that we know are trying to implement are constraining capacity, whether it's dealing with safety precautions with staff, or it's ensuring that patients don't sit in waiting rooms but sit in parking lots. There are a lot of factors that people are implementing to create a safe environment for both employees and patients. I question the ability to get to 120% of capacity but I do Industry Insights | June 5, 2020 4 feel like based on what we've seen, people are getting closer to historical norms, albeit with some of these safety procedures.

The use of telemedicine is a way people have been creating capacity to deal with COVID. Certain practice areas are much more effective at using telemedicine where there are others that can't get around the in-person patient provider interaction.

John Soden: Dave, what are you seeing in terms of best practices amongst health systems?

David Morlock: Wyatt touched on a few of them. From a best practice perspective, we are seeing check-ins happening on the phone and people waiting in the parking lot. Patients are met at the door for a temperature check and some other screening. They are marshaled through the system with fewer handoffs with a nurse or a medical assistant helping you all along the way. It’s like your guardian angel helping you through the whole process. I think those things are happening. Back to your question of 120%, other than very limited pockets, I just don't see that happening at all. If you just think about some of the procedures, for example imaging, whether it's an imaging center, ambulatory center or hospital, the procedure was scheduled every 10 minutes, that's six an hour. Now it is one every 15 minutes because you must do significant cleaning of the equipment. That's an automatic one third reduction in your capacity right there. So, you fully utilize capacity and you're still back at 67% of where you used to be pre-COVID. You're not coming back at 120%. It's just not going to happen.

Those are typically some of the things that we're seeing that operators are trying to do to figure out how to ultimately get people through the system safely. And all of this will probably ultimately be mitigated when we have a vaccine and maybe a much more significant sort of testing and contact tracing that goes along with that. But we're months away.

John Soden: Pre-vaccine, how's testing playing into facilitating patient flow?

David Morlock: The broad testing and contact tracing speaks to the psychology of the patient and whether they are going to feel safe coming back to certain settings, like the hospital. I think that's why Wyatt and Jamie are suggesting we'll likely see a bigger bounce back at places like multi-site ambulatory providers and ambulatory surgery centers rather than hospitals because a hospital is where sick people congregate. Patients are still nervous about going into an institutional setting like a hospital, which is why in a recent HFMA survey, literally more than half of the 170 hospital executives interviewed suggested that it will be more than a year before we get back to pre-COVID levels procedures, patient volumes and throughput.

Wyatt Ritchie: I also think that patients are probably more willing to see providers, but another constraint is whether providers are able to see patients. And a lot of those folks are parents that are trying to either deal with children at home or have been furloughed and are getting unemployment benefits or other constraints that are frankly also having a limit on capacity.

John Soden: So that's an interesting comment. From a medical product perspective, or medical product company CEO perspective, the biggest fear is that patients are not predisposed to seek care. And it sounds like, Wyatt, you at least believe that there's plenty of interest in patients seeking care; it's more of a provider issue at this point. How have you come to that conclusion? What are you seeing in dental and IVF centers and all the other different types of practices that you cover?

Wyatt Ritchie: As I mentioned previously, it varies across the array of healthcare. For example, if you have constant hip pain, at some point, you're going to want hip replacement surgery. If you're interested in fertility services, you could argue that those services are more discretionary. Having said that, there are limited windows upon which you can pursue those kinds of procedures. But I do think that for much of healthcare, if there's a need to get something fixed or something accomplished then I'm willing to do that. You could argue a back-to-school check-up or an annual check-up can probably be pushed off a little bit, six months; teeth cleaning can be pushed back.

But as I said, with businesses which provide more discretionary services, people have been pleasantly surprised with the demand. Maybe that is reflective of a general trust in the healthcare system by patients that it's overall a safe place to be and that providers are going to take appropriate measures to ensure patient safety.

Jamie King: I generally agree with Wyatt. In an ASC setting, some of those volumes are just being deferred and they will come back at some point. As Wyatt pointed out, if you need your hip replaced, that's not something you're going to indefinitely put off. You're going to get it done at some point, probably sooner, rather than later. There are some more routine procedures that may be pushed off long enough that takes the overall number of those cases down for a while, such as colonoscopies where you're not likely to see folks running back to get those types of screenings done. And they weren't really in a rush to get those done under normal circumstances. For some of those types of procedures, we expect to see a drop in volume for those for the time being. And that lag will play out over the next few years.

John Soden: Fantastic. You mentioned earlier that ASCs were benefiting from patient flow that would otherwise benefit hospitals. To what extent is that true and how long do you think that will continue to be with us?

Jamie King: Even before COVID, there was a general trend for more surgical procedures to be done in an outpatient setting. You have this shift from inpatient to outpatient that's generally occurring and it's expected to continue to occur with technology improvements. That trend is just going to continue. I think part of the issue here is whether it's done in a hospital out-patient department (HOPD) setting or an ASC setting. Some of the rate dynamics play into that decision-making process for health systems, because the rate differential between an HOPD and ASC rate for the same procedure is roughly two to one.

I think hospitals are put in a tough spot right now to try to capture that outpatient volume that's going to ASCs, and they're losing it out of their HOPD, which is hurting them economically. We are seeing a lot more partnerships and interest from health systems trying to capture that volume going to the outpatient setting and trying to provide it in the HOPD. Payers are trying to push that volume even further away from the hospital into an ASC reimbursement setting.

John Soden: Regardless of provider involved or where the procedure is happening, how do you see reimbursement, particularly the higher deductible plans, playing into patients’ predispositions to seek care, particularly now that the economy has been hit pretty hard?

David Morlock: I think it's going to have an impact. I think it will depress volumes some, whether you have either lost your job and you don't have coverage, your coverage isn't as good as it used to be, or it just takes that much longer to hit your high deductible before you then seek coverage. It also contributes to the issue of care venue. Last week I spoke to the CEO of one of the largest home care and hospice companies in the country. And his business, as well as many of the other home care businesses, are already back to pre-COVID levels in home care. And they're doing that without taking care of any of the patients that have foregone or delayed certain types of surgical procedures.

They actually believe post-pandemic that they're going to see a volume uptick because folks that used to go to a nursing home or spend a day in the hospital are now just going straight to the home setting. And the home care companies are taking care of them there. Patients get better convenience, and lower costs, whether you're paying out of your pocket or whether your employer's paying or whether the government is paying. And it's arguably a safer setting from a care perspective because you're not in an institutional setting where the fear of something like coronavirus is still there.

John Soden: So, for those providers who are not seeing a return – whether it's immediately or within the foreseeable future – to pre-COVID levels, how are they going improve patient flow?

David Morlock: Providers are implementing a variety of strategies. They're trying to manage the costs because a significant chunk of the costs are variable. To stimulate patient flow, providers are advertising, including billboards, broadcast media and social media. They are reminding folks that you should not be putting off necessary healthcare. People still need their cholesterol and heart checked, diabetic eye exams and foot checks. So, we're seeing that type of advertising. We're also seeing a fair amount of direct outreach by providers who are mining their patient logs, trying to track down folks to bring them in for care.

Jamie King: One of the things that we're also seeing is at the beginning of COVID in March, everybody got a slew of emails from every vendor or provider they've ever been in contact with letting them know what they were doing about COVID. We're starting to see a second wave of those, letting folks know what they're doing to address safety concerns and that they're open for business. Like Dave said, they’re ready to schedule routine procedures to try to get folks back in the door and let them know that they're available and ready to go.

It's definitely more of a proactive outreach that we've seen by providers than we've seen in the past. For folks that have actually gone in for procedures, what you're finding right now is in this environment, you can get an appointment done within a matter of days and not the weeks or months that it sometimes takes. Those kinds of pleasant surprises for folks spread quickly and people are starting to understand that things are opened back up; and it is a good time to go back in and take care of healthcare needs that don't go away.

Wyatt Ritchie: It's going to be interesting, back to Dave's original point about costs and focusing on costs. A lot of costs in healthcare are variable and labor related. It's been pretty easy for providers to manage costs when things shut down, it's going to be a lot trickier to manage those costs as we ramp back up because it's going to be in fits and starts. It's not going to be five days a week that you’ll be able to staff offices. I think that another challenge is going to be matching supply, capacity and hours of operation to demand. In certain cases, urgent care for example, you just open the doors and hope patients come; it's going to be a particular challenge. Other areas that are highly scheduled may be a bit easier. But I do think that managing costs on the way back up is probably going to be more challenging than managing costs on the way down. Industry Insights | June 5, 2020 7

Wyatt Ritchie: If there are ways to use technology to either improve efficiencies or the experience, I'm hopeful that those things become more readily used going forward. Telehealth is an obvious one. The notion about scheduling and notifications when you're ready. If there are ways that we can use technology to mitigate frustrations like sitting in a room waiting to be called, it's going to improve operations, and two, it's going to improve the patient experience as well.

We've seen the historical frictions around telehealth erode relatively quickly. I think the frictions had been payers and a willingness to pay at equivalent levels for a telehealth visit versus an inpatient visit. There was skepticism about the efficacy between the two and payers were reluctant to pay the same rates. Obviously, the government mandated that those rates be the same to ensure that there was access.

I think the other barrier was on the provider side. There was some skepticism. We saw that with a behavioral health business where the bigger barrier was not with patients but with providers. The emergency and the needs created by COVID validated that you can have highly effective visits via telehealth. I'm sure telehealth won't fully replace inpatient visits, but we're going to see a greater utilization of it. That creates all sorts of opportunities to maintain profitable operations as we go through COVID.

John Soden: Telehealth, in particular, has gotten a huge, huge boost from this environment. But there's still a raging debate on whether is more or less costly.

David Morlock: At least part of the payers' reluctance has been not around efficacy necessarily, but around are we simply creating one more avenue for charging folks? You have a telehealth visit with a dermatologist. The dermatologist looks through the camera and says, "Yep, you need to come into the office." So, you charge for the telehealth visit, then you charge for the office visit, when before, you would have just made an appointment and gone for the office visit. So, payers have expressed reluctance around telehealth from that perspective and suggesting that it's duplicative.

I think it may ultimately push American healthcare to accelerate the move toward value-based care. If you think about health insurers for a moment, in this reduction in patient volume and revenue, the health insurers are sitting on all the money, because they're not paying it out to doctors and hospitals. So, folks are still paying their insurance premiums and then the insurance company doesn't need to pay it to the providers. In a fee-for-service environment, the insurance company wins and the healthcare provider loses. In a value-based environment, developing technologies like telehealth to enhance both the patient experience and even do some pre-screening in advance could be a way for the entire system to save money, but you've got to have the providers and the insurance companies working together in a value-based environment, as opposed to working on the other side of the fence from each other, which is what fee-for-service is.

John Soden: In terms of overall ways to operate more efficiently in this environment, what have you seen the best providers doing outside of what we've already discussed?

David Morlock: We are starting to see the implementation of new technologies in areas around infection control, which could help address both the timeliness it takes to turn rooms around, as well as the ability to make up for the fact that it may be difficult to recruit some lower paid staff back into the care setting. You can do it technologically with robots and infrared lights We're starting to see some of that happening in the marketplace. Industry Insights | June 5, 2020 8

John Soden: As you look at all these different effects and influences, what's the impact on M&A?

David Morlock: In the hospital and the health system space, I saw a recent survey where about 30% of health systems CEOs said this pandemic is going to alter their view and plans and significantly ramp up their efforts to seek M&A activity in partners. That includes folks on the smaller end of the spectrum who need to be taken over and merged into a larger system, and it includes larger systems who are looking at this as an opportunity to shake M&A activity loose. We're also starting to see a number of midsize-to-larger health systems engage in heavy discussions with other midsize and larger health systems. It’s not just the strong acquiring the weak, or the big acquiring the small, but the large and strong coming together to get even stronger and create a bigger boat to deal with the choppy seas.

Jamie King: The M&A activity that we're seeing on the hospital and health system side is not just looking at other hospitals and health systems. There’s a lot of other partnership activity just with urgent care providers, surgery centers, physician groups, to look at addressing some trends right now that are struggling with volumes in the ERs going down and going elsewhere for the time being. I think we're definitely going to see many more health systems looking at other strategies beyond bricks and mortar to address providing care for the populations that they serve.

The other big piece that ties into the M&A activity and the financial activity that we see with companies right now is when you look at the timing and impact of COVID, you had the volume decline starting to hit towards the end of March, which really meant that the first quarter earnings and financials for most folks was the tip of the iceberg.

As we get closer to the second quarter numbers that are going to be reported, which will show the full second quarter impact, what we anticipate seeing is a lot more activity around folks that are going to have issues making covenants.

There are two broader categories of folks who will drive those discussions. One is those who may have foot fault issues but are still making payments, which is going to be a much easier discussion with lenders. The other are those who are struggling to make payments, and it's going to be a much more difficult dynamic. That dynamic is going to lead to increased M&A activity, and additional financing activity to drive some of the transaction volume over the next few months.

John Soden: We talked about restructurings or potential restructurings. Can you characterize how important elective procedures are to the P&L of the hospital?

David Morlock: In the fee-for-service environment, they're huge. All the profit sits in the procedural business. Doing procedures on folks is far more profitable than taking care of cognitive types of care issues like pneumonia, flu, COVID-19 and those types of things. When we shut down the system to prepare for the surges of COVID-19 patients and stopped doing elective procedures, both for safety reasons, as well as trying to stay on top of personal protective equipment, that's the reason that hospitals and health systems saw their profitability plunge. That's where all the profit is.

John Soden: And as you look at different types of hospitals, who is most susceptible to running into a financial problem with respect to their lender?

David Morlock: It’s a reasonably decent analogy to describe it like a boat. If the water is really choppy, and you are in a huge barge, you're going to be able to manage the water much better than somebody floating around in a dinghy, or a rowboat. So, the smaller hospitals, the smaller health systems, including many of the rural hospitals, are just not in a position Industry Insights | June 5, 2020 9 to deal with the shockwave that they've experienced here. They've often said, "Come hell or high water, we want to remain independent." Well, now hell and high water showed up at the back door, and it's created a big problem for folks. I think we're going to get a significant increase in hospital bankruptcies over the next 18 months. It has been an issue for the last 18 months, even before the pandemic, and it's going to get much worse. It’s really difficult in rural settings. There's lots of places in the Heartland of America and in the Southeast part of America where many counties have one hospital and that's it. There are many counties that have absolutely no hospitals. Ultimately, it creates a public health crisis in those areas.

Wyatt Ritchie: I would say that size certainly is helpful, but it's got to come with a good balance sheet, or one that can weather these storms. I do think that those operators, those companies that had difficult balance sheets going into this for a wide variety of reasons, are going to be primary catalysts for consolidation, and are going to be the companies that are most vulnerable.

John Soden: Wyatt, in your universe, which is dominated by private equity, where's the pendulum in terms of swinging back to pursuing consolidations very proactively, and taking advantage of perhaps some opportunistic situations?

Wyatt Ritchie: It’s all over the board. There are some private equity-backed practice consolidators that have given the keys over to lenders because they were over-levered and felt that rather than putting more equity into a business to save it, it was easier to give it to the lenders. To the opposite side, which is very bullish about the opportunity to consolidate, whether it's weaker competitors or independent physicians now having lived through this and personally funding to keep their practices open. The notion that there's actually someone that would be willing to let me take some chips off the table, be a partner to navigate through other unforeseen circumstances, could be a catalyst for further consolidation in some of these practice areas.

Jamie King: The challenge we're having right now is the buyer and seller valuation expectations and opinions, and how they handicap risk, and outlook, and recovery. What we're seeing in the incredibly short term with all this uncertainty is that the valuation gap between what a buyer and seller is expecting to transact on is a bit wider today than we may have seen in the past and what we expect to see as more certainty and clarity comes into the picture here over the coming months. I think it'll be easier to get transactions done as things play out, but in the short term, one of the challenges we're seeing is, how do you value a company in the middle of a pandemic when there's a strong impact? What does the recovery and impact look like on valuation and using historical versus projected? It's a complicated discussion that we're having with a lot of clients, but something that will continue to drive healthcare activity in the transaction world here going forward.

John Soden: I want to wrap up and ask you each for one comment, one major prediction about how COVID will change the healthcare system long term for each one of your segments.

David Morlock: I'll give you a three-for-one. I think we're going to see a significant increase in hospital bankruptcies. That'll change the system, but arguably perhaps not benefit the system. I think you're going to see a significant increase in hospital and health system merger and acquisition activity. I think that is a benefit to the system. And ultimately, I think this will be a catalyst to move us toward value-based care – even faster than we were going before – and I think that's a good thing for American healthcare. Industry Insights | June 5, 2020 10

Jamie King: I would agree with Dave that my major prediction is that we're going to see an acceleration of the shift to out patient-based care and that ties in with the focus on shifting to a value-based care system.

Wyatt Ritchie: I'm not sure it fundamentally changes some of these broader themes that we've been talking about. I think the one area that we haven't talked about is if we see payers also fuel more provider consolidation than we've historically seen. They have been able to stockpile cash due to less use of healthcare services. There are certainly some payers that have been catalysts for consolidation on the provider side, and maybe that's the means to get to value-based care. I could see payers becoming more instrumental in overall provider consolidation.

Join Managing Directors from Cain Brothers, as they discuss the return of elective procedures as the economy re-opens from the COVID-19 pandemic.

David Morlock Cain Brothers Experience

David Morlock is a senior banker in the Firm’s Health Systems M&A Group. Mr. Morlock joined Cain Brothers in 2016 with 30 years of experience as a health system executive. His track record includes strategy development, mergers and acquisitions, affiliation agreements, joint ventures, major capital investments, and other unique arrangements tailored to meet the needs of healthcare organizations’ specific circumstances. Notable and innovative transactions and advisory engagements include the divestiture of MDwise health plan by Indiana University Health, acquisition of Ohio Valley Health by Alecto, affiliation between Fairview Health and the University of Minnesota, healthcare strategic advisory work for the University of North Carolina, affiliation between ProMedica and the University of Toledo College of Medicine, the University of Michigan Health System sale of M-Care to Blue Cross Blue Shield of Michigan, and the University of Michigan’s acquisition of a major research campus from Pfizer. Mr. Morlock is a frequent author of articles and speaker on health care industry mergers and acquisitions and strategic capital insights.

Prior Experience

Prior to joining Cain Brothers, Mr. Morlock was the CEO of the University of Toledo Medical Center, where he had executive responsibility for all aspects of the medical center’s strategy and operations. In addition, Mr. Morlock was CFO of the University of Michigan Health System, with executive responsibility for the financial affairs of the hospitals, clinics, physician group, and medical school. Mr. Morlock was also a Senior Vice President of Accretive Health, where he was responsible for major client executive relationships and business development.


Mr. Morlock earned an MBA from Eastern Michigan University’s Owen School of Business and is an honors graduate of Slippery Rock University.

Wyatt Ritchie Cain Brothers Experience

Wyatt Ritchie is a senior banker focusing on Post-Acute Care and Outsourced Services.  Mr. Ritchie joined Cain Brothers in 2010 with 23 years’ experience advising both public and private companies in a variety of merger and acquisition, capital raising, and strategic advisory transactions.  Mr. Ritchie’s recent transactions include the refinancing of senior and subordinated debt for American Surgical Professionals, the sale of Centerre Healthcare to Kindred Healthcare, the sale of Specialty Hospitals of Washington, the recapitalization of Results Physiotherapy by Sterling Partners, and Erickson Living’s acquisition of Devonshire at PGA. He is a member of the Firm’s President’s Advisory Council.

Prior Experience

Prior to joining Cain Brothers, Mr. Ritchie was at Jefferies & Company, responsible for that firm’s healthcare services practice. Prior to joining Jefferies, Mr. Ritchie was at CIBC Oppenheimer for eight years where he was responsible for that firm’s West Coast healthcare services investment banking practice and at Bank of America, where he was responsible for Bank of America’s healthcare leverage finance business.


Mr. Ritchie earned BA in Economics from St. Olaf College and an MBA in Finance from the University of Chicago.

John Soden Cain Brothers Experience

John Soden co-leads Cain Brothers’ Medical Technologies Advisory practice based in San Francisco. His practice has focused on medical devices, diagnostics and life science tools/reagents since 2001, prior to which he specialized in M&A and worked across multiple industries.

Mr. Soden joined Cain Brothers in early 2016 with over 20 years of investment banking experience, primarily focused on private and public company M&A.  Recent advisory transactions include the sale of SeraCare Life Sciences (owned by Linden) to LGC (owned by KKR), California Cryobank’s sale to GI Partners and its simultaneous merger with Cord Blood Registry, Patricia Industries’ acquisition of Sarnova from Water Street, 3i Group’s acquisition of Cirtec Medical, Frazier’s merger of PREZIO and Northfield, and the sale of Clinical Innovations by The Pritzker Group to EQT Partners. Recent leveraged finance experience includes serving as left lead arranger/joint bookrunner/administrative agent for Linden’s $325mm acquisition financing of Avalign Technologies and as joint bookrunner/joint lead arranger for THL’s SPAC’s $810mm acquisition financing of UHS (renamed Agiliti Health).

Prior Experience

Previously, Mr. Soden was a Managing Director & Head of Medical Technologies at Houlihan Lokey for approximately seven years.  Mr. Soden’s transactions immediately prior to joining Cain Brothers included the sale of Hygiena to Warburg Pincus, Galil Medical to BTG Plc, CORPAK MedSystems (owned by Linden) to Halyard Health, Cord Blood Registry (owned by GTCR) to AMAG Pharmaceuticals, Ivera Medical to 3M, Integrated Medical Systems (IMS) to Steris, and Angiotech’s Interventional business to Argon Medical Devices (then owned by RoundTable Healthcare Partners). Notable restructuring experience included creditor representations with respect to Ameritox and Angiotech Pharmaceuticals.

Before Houlihan Lokey, Mr. Soden worked for over six years in the Healthcare Group at Thomas Weisel Partners, most recently as a Managing Director, and for five years at UBS (and its predecessor Dillion, Read & Co.), eventually serving as a Director in both the M&A and Healthcare groups. He began his investment banking career as a financial analyst at CS First Boston in 1994.


Mr. Soden received a B.A. in Economics (with Honors) from Northwestern University.

Jamie King Cain Brothers Experience

Jamie King is a senior banker in the Firm’s Health Systems M&A Group and leads Cain Brothers’ Ambulatory Surgery Centers Advisory practice. Mr. King joined Cain Brothers in 2005 and has over 19 years’ experience advising on an array of transactions including sales, acquisitions, mergers, joint ventures, nonprofit conversions, valuations, restructurings, divestitures, recapitalizations, and private placements of debt and equity. Mr. King’s notable transactions include the financing and acquisition of HCA’s interest in OU Medical System by OU Medicine, the divestiture of Saltzer Medical Group from St. Luke’s Health System, the sale of Blue Chip Surgical Center Partners, the sale of Health Inventures to Surgical Care Affiliates, the investment by Irving Place Capital in National Surgical Healthcare, the sale of the American Institute of Gastric Banding to USPI, the merger of Sun Health into Banner Health, and the recapitalization and acquisition by HealthCare Partners of JSA Healthcare Corporation.

Prior Experience

Prior to joining Cain Brothers, Mr. King was at Sorenson Capital, a middle market private equity firm focused on leveraged buyouts and growth equity investments in small and middle market companies across various industries, including healthcare, distribution, and services. Prior to Sorenson Capital, Mr. King was at Lehman Brothers in that firm’s Global Healthcare Group, where he focused on supporting M&A advisory and public equity and debt capital transactions for clients in the healthcare services and medical technology sectors.


Mr. King earned a BS in Finance from Brigham Young University.

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