UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 8, 2005
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-32085 | 36-4392754 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
222 Merchandise Mart, Suite 2024
Chicago, IL 60654
Registrant’s telephone number, including area code (312) 506-1200.
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 7.01. | Regulation FD Disclosure. |
Attached as Exhibits 99.1, 99.2, 99.3, 99.4 and 99.5 hereto are Investor Day Presentations dated September 8, 2005, which are incorporated herein by reference.
This information is being furnished pursuant to Item 9 of this Report and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and will not be incorporated by reference into any registration statement filed by Allscripts Healthcare Solutions, Inc. under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein by reference. This Report will not be deemed an admission as to the materiality of any information in this Report that is being disclosed pursuant to Regulation FD.
Please refer to page 3 of Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.
| ITEM 9.01. | Financial Statements, Pro Forma Financial Information and Exhibits. |
| (c) | Exhibits: |
| 99.1 | Investor Day Presentation 1 dated September 8, 2005 | |
| 99.2 | Investor Day Presentation 2 dated September 8, 2005 | |
| 99.3 | Investor Day Presentation 3 dated September 8, 2005 | |
| 99.4 | Investor Day Presentation 4 dated September 8, 2005 | |
| 99.5 | Investor Day Presentation 5 dated September 8, 2005 | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. | ||||||||
| Date: September 8, 2005 |
By: | /S/ WILLIAM J. DAVIS | ||||||
| William J. Davis Chief Financial Officer | ||||||||
3
EXHIBIT INDEX
The following exhibits are filed herewith:
| Exhibit No. |
||
| 99.1 | Investor Day Presentation 1 dated September 8, 2005. | |
| 99.2 | Investor Day Presentation 2 dated September 8, 2005. | |
| 99.3 | Investor Day Presentation 3 dated September 8, 2005. | |
| 99.4 | Investor Day Presentation 4 dated September 8, 2005. | |
| 99.5 | Investor Day Presentation 5 dated September 8, 2005. | |
Exhibit 99.1
[GRAPHIC]
Agenda
9:00 – 9:30am Allscripts Overview
9:30 – 10:15am Best Practices: Clinical Automation at George Washington University/Medical Faculty Associates
10:15 – 10:30am Break
10:30 – 11:15am A Day in the Life of the Electronic Physician
11:15 – 11:45am Financial Overview
11:45am – 12:00pm Sales Process Overview
12:00 – 1:30pm Lunch and Panel Discussion with Q&A
Page 2
Safe Harbor
This presentation may contain forward-looking statements about Allscripts Healthcare Solutions that involve risks and uncertainties. These statements are developed by combining currently available information with Allscripts’ beliefs and assumptions. Forward-looking statements do not guarantee future performance. Because Allscripts cannot predict all of the risks and uncertainties that may affect it, or control the ones it does predict, Allscripts’ actual results may be materially different from the results expressed in its forward-looking statements. Allscripts assumes no responsibility for updating any such forward looking statements. For a more complete discussion of the risks, uncertainties and assumptions that may affect Allscripts, see the Company’s 2004 Annual Report on Form 10-K, available at www.sec.gov or on our website.
Page 3
[graphic appears here]
Allscripts Overview
Glen Tullman
Chief Executive Officer
Key Takeaways
The Time is Now
1.
2.
3.
4.
Our Physician Focus = Key to Transforming Healthcare
We are the Leader in Growth Markets We Compete In
Competitive Advantage = Driving Utilization and Results
We’re Just Getting Started
Page 3
Trends
From Healthcare to Health
Moving Outside of 4 Walls of Hospital
Prevention, Education, Disease Management
Physicians Return to Leadership Role
Move From EMR to EHR
Page 4
Trends
Healthcare as a Business
Patients as Consumers Take Charge
ROI
The EHR is Becoming a “Standard of Care”
Decisions Driven by Business/Economics
Page 5
Trends
New Reality for Pharma
Take Two of These and Don’t Call Me in the Morning . . .
Changing Economics
First Decreases in Sales Force (Detail Reps)
Adherence/ Compliance
Pharma Required to Adopt After Market Surveillance
Page 6
Trends
Community” Versus “Silos”
Secretary Leavitt’s “Train Tracks” for Interconnectivity
CCR/CDA
The Bottom Line:
Healthcare is Coming Together
Page 7
A Different Perspective…
Traditional View
Healthcare Revolves Around the Hospital
Our View
Healthcare Revolves Around the Physician
Page 8
The Time is Now…
“If all we did was provide excellent patient care to sick patients who walked through our doors, I am convinced we would be out of business in five years.”
- Jerry Miller, MD
Chief Executive Officer
Holston Medical Group
Page 9
Our Vision
To Become an Indispensable Part of the Way Physicians Practice Medicine
Page 10
How To Become Indispensable for Physicians?
…By Delivering Solutions That Inform, Connect and Transform Healthcare
Page 11
Delivering Value Through Our Solutions
Document Imaging
E-Prescribing
Personal Health Record
Electronic Health Record
Adherence/ Compliance
Medication Dispensing
E-Detailing
Page 12
What Our Products Actually Do . . .
Reach 20,000 MDs with Drug Recall Information
The Ability to Educate 10,000 MDs by Tomorrow Morning
Decisions Based on Real-Time Evidence-Based Data
Health vs. Healthcare With Physician Directed Information
Inform-Connect-Transform
Making the Impossible Possible
Page 13
An EMR Informs You
Document
Manage
Retrieve
Transact
Page 14
An EHR Connects You
Ancillaries
Document
Manage
Retrieve
Transact
Patient
Care Team
Research
iHealthRecord The Personal Health Record Standard
TouchWorks™ iHealth:
1. A Secure Online Personal Health Record (iHR)
2. Automated Patient Education Programs for Disease Management and Medication Adherence
3. Secure e-Mail and On-Line Consults
Page 16
Page 17
The Opportunity Physicians Interactive
MD/Patient Education Market
Pharma Industry Marketing Spend = $15 Billion/Year
Current Market for Online Product Education ~$250mm
43% of Pharma Detail Calls End at Receptionist
50% of Detail Calls Last < 2 Minutes
Page 18
The Opportunity EHR Market
Electronic Health Record Market
$6 Billion Market
Tools & Technology are Better, Less Expensive
Physicians Willingness to Adopt Technology
Proven, Measurable ROI
Page 19
Converting Opportunity into Results
Allscripts Wildly Important Goals (WIGs)
1. Capture Market Share
2. Increase Utilization
3. Meet Financial Commitments
Page 20
The Allscripts Advantage Physicians Interactive
Blue-Chip Client Base
Portfolio of Solutions
Leadership in Adherence/ Compliance
Proven Return-On-Investment
Page 21
Market Share Physicians Interactive
Blue-Chip Client Base
39 Pharmaceutical, Biotech & Medical Device Companies
8 of Top 10 Pharmaceutical Companies
More Programs Delivered
400 Programs for 100 Brands
59 International Programs in 8 Countries
Significant Traction with Physicians
60,000 Unique Physician Participants in U.S.
> 300,000 Educational Sessions Completed
Page 22
The Allscripts Advantage EHR Market
Blue-Chip Client Base
Modular Approach
Proven Process for Rapid Implementation
Leadership in National Initiatives
Top Rated in Every Industry Evaluation
With IDX Partnership, Preferred Access to 70% of Large Groups
Page 23
Market Share EHR Market - Segmentation
Market Segment
> 25 Physicians
10 to 24 Physicians
< 10 Physicians
Specialties
Status
Leader
Competitive
Evolving
Leader
12 Month Management Objective:
Profitable Leadership In Each Segment (Buy, Build or Partner)
Page 24
Market Share EHR Market - Client Base
Over 1,500 Leading Clinics Across the U.S.
Page 25
Market Share EHR Market - Client Base
Multi-Specialty Groups
Specialty Groups
Academic Medical Groups
Integrated Delivery Networks
Over 1,500 Leading Clinics Across the U.S.
Page 26
Utilization EHR Market
IDDUINEM
If Doctors Don’t Use It Nothing Else Matters
Page 27
Utilization EHR Market
IDDUINEM
If Doctors Don’t Use It Nothing Else Matters
Share of RxHub Rx Transactions
Allscripts
All Other Vendors
Page 28
Utilization EHR Market
“The EHR That Pays You Back”
Transcription/Documentation
- Central Utah Clinic: Independently Documents $1M in Savings in First Year ($20K/MD)
Medical Records
- George Washington Univ. Medical Faculty Assoc.: Reduction of 20 FTEs in Medical Records
Clinical Trials
- Holston Medical Group: Generates $3M/Yr. in Clinical Trial Revenue
Charges
- University of Tennessee Medical Group: Increases Avg. Gross Charges by > $30/Patient Visit
Pay for Performance
- Facey Medical: Receives $1.2M P4P Payout from Blue Cross
E-Prescribing
- Sierra Health: Achieves $5M in Savings via eRx
Page 29
Centers of Excellence: Sierra Health
Impact
$5,000,000/Yr.
Action
Increased Generic Use from 59% to 66%
Reduce Medical Records Staff by 40 FTEs
Reduced Transcription Costs Reduced Chart Pulls by 97%
$950,000/Yr.
$842,000/Yr.
Page 30
Leadership
“There are three ways to handle change. You can fight it and die; accept it and survive; or, lead it and prosper.”
- Mike Leavitt
Secretary of HHS
June 2005
Page 31
Leadership
Page 32
Leadership
We “Wrote the Book”
Page 33
Summary
Physician-Centric
Well Positioned for Growth and Sustained Profitability
Continued Increase In Gross Margin
Competitive Advantage in All Markets
Leadership Position in All Businesses
Strong Sales Momentum in Growing Markets
People
Strong Financial Position
Page 34
Exhibit 99.2
Best Practices:
Clinical Automation at George Washington University Medical Faculty Associates
Steve Badger Chief Executive Officer September 8, 2005
Overview
Background on George Washington University Medical Faculty Associates
What Do Senate Majority Leader Bill Frist and Senator Hillary Clinton Have in Common?
From 0 to 100 in 28
Results, Results, Results
2
Background
Medical Faculty Associates
Largest Multi-Subspecialty Physician Practice in Washington, DC
Affiliated with George Washington University
Over 1,500 Patients/Day
41 Specialties
Over 300 Healthcare Providers Over 400 Residents/Fellows Over 700 Support Staff
4
Background
Key Points
Healthcare is Behind in IT
Call to Action
Implementation Can be Fast
Impact on Patient Care is Significant
Significant Opportunity for Patients/Providers/Staff
State of the Union Address Led to Acceleration
100 Physicians in only 30 Days
The EHR is a Medical Instrument
5
Background
EHR Strategic Objectives
Provide Information Access (Reliable, Fast, Easy, Remote) Improve Efficiencies (Resulting in Cost Savings) Allow for Enhanced Risk Management and Compliance Facilitate Research Mission of MFA
Approach Incrementally
Centralize Information Technology
Maximize current investments Security control Reduce long-term support and training
7
Background
Selecting an EHR
Why Allscripts?
An EHR is a Journey, Not a Destination – Needed a Trusted Long-Term Partner
Ability to deliver enhancements Responsiveness Innovation
Modular
Ability to integrate/interface (IDX)
8
9
10
Formulary Identification in e-Rx
PA =Prior Auth.
Non Formulary
TouchWorks looks at the patient’s pharmacy benefit Preferred Formulary information to determine the appropriate formulary.
2nd Tiered Formulary
13
Formulary Alternatives
Prior Adverse Reaction Warnings
TouchWorks looks at the patient’s reported allergies and compares it to the requested medication.
A medication allergy will trigger warnings for the entire class of medications.
Drug Utilization Review
TouchWorks looks at the Active Medication list to determine potential drug interactions within the list, as well as with new medications.
TouchWorks also provides Duplicate Therapy warnings.
Medication Reporting
Patients using recalled medications can be identified immediately
SnapShot
19
Accelerated Implementation
Full EHR for Department of Medicine
Intense Team Environment Moving Towards Common Goal
Removed obstacles as they arose
Functionality Deployed
Implemented Charge, ePrescribing, Note, Results
Enabled Multiple Note Entry Types (Structured
Templates, Text Templates, Dictation, Voice Recognition)
Deployed Patient Online
20
Accelerated Implementation
Full EHR for Department of Medicine
Training Approach
“Command Center”
Physicians benefit from one on one training
Staff training based on roles and workflows
Plan schedule well in advance – expect changes
21
Accelerated Implementation
Full EHR for Department of Medicine
Challenge: Multiple Specialties, Short Time Period, Drive Utilization
100+ Physicians: Robust Users of TouchWorks EHR
Full Roll Out to Department of Medicine
Internal Medicine 36 MDs (Hospitalists – 4 MDs)
Infectious Disease 7 MDs
Endocrinology 9 MDs
Cardiology 16 MDs
Rheumatology 7 MDs
Pulmonary 5 MDs
Renal 8 MDs
Gastroenterology 8 MDs
Podiatry 3 MDs
22
Impact of EHR
Process/Economic Efficiencies
Areas of Impact:
Figure 3. Five Year Impact of EHR
$12,000,000
$10,000,000 Higher Coding Levels Due to Improved Documentation
$8,000,000 Transcription Expenses
$6,000,000 Chart Related Staffing Expenses
$4,000,000
$2,000,000
FTEs = Reduction of 25 FTEs in Medical Records Coding = $2,000,000 Transcription = $1,800,000 Chart Related Expenses = $6,000,000 DSO = Reduction from 71 to 56
23
Impact of EHR
Quality of Care
Recalls: MFA was able to query all patients on Vioxx and automically send a letter
Error Avoidance: Rxs electronically sent to pharmacy, improving accuracy/avoiding errors
Triage: Reorganized telephone messaging … real time to physicians (cut by 3 days)
Refills: Refills for “bridge” prescriptions (Rx+) 24 hour turnaround (no longer 5-7 days)
Access to Chart: Dramatic reduction in chart pulls (10 fold decrease)
24
Impact of EHR
Patient Satisfaction
Communication : Tasking facilitates triage, personal contact and improved physician/patient communication
Information: Access to their records and lab results in exam room during visit
Follow-up: Patients receive letter with status of their test results vs. calling on multiple occasions
Facilitation: Connect providers and patients
25
Impact of EHR
Provider Satisfaction
Information: Information accessible anywhere, anytime
Flexibility: Physicians handle tasks remotely and can use multiple options for documentation
Access: Direct lab interface for results and direct radiology interface from hospital for x-ray and procedure results
Reporting: Develop reports to monitor status of errors
Clinical Advances: Providers and clinical staff see abnormal lab results and can address in real-time
26
Summary
The Time is Now (Quality and Cost Drivers)
The Results are Very Real and Very Significant
This Is Changing How Healthcare is Delivered in the U.S. Right Now
This is the New “Standard of Care”
It’s a Journey, Not a Destination (Why the Right Partner is Mission Critical)
27
Open Discussion and Questions
28
Best Practices:
Clinical Automation at George Washington University Medical Faculty Associates
Steve Badger Chief Executive Officer September 8, 2005
Exhibit 99.3
ALLSCRIPTS TM
Inform. Connect. Transform.
Delivering Value Through Our Solutions
Document Imaging
Personal Health Record
Adherence/ Compliance
E-Detailing
Medication Dispensing
Electronic Health Record
E-Prescribing
Page 2
PLAYBILL
Rainbow Room at Rockefeller Center
A Day in the Life
The Electronic Physician
Page 3
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Page 4
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act I – Mason Caribee Visits Dr. Medici
Challenges in a Typical Practice
Access to Information
Access to the Chart
Ability to Find What is Needed in Chart
Poor Communication Between Providers
Waiting Time for Lab Results
Finding the Time to Educate Patients
Getting Patients to Pick Up Their Medication (Adherence)
Getting Patients to Take Their Medication (Compliance)
Inconsistent Approaches for Typical Encounters
Page 5
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act I – Mason Caribee Visits Dr. Medici
“The Electronic Physician”
Real-Time Access to Information
Ability to Educate Patients (View Graphs)
Instant Connection to Pharmacies, PBM, Payors
Instant Connection to Labs
Flexibility: Multiple Options for Documentation
Imaging/Scanning of Documents
Vitals Captured Electronically
Page 6
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II – Mason Caribee at Home
Challenges for a Typical Patient
Access to Their Own Medical Record (Allergies, Meds List, Problem List, etc.)
Ongoing Communication with Physician
Lack of Understanding of Disease State
Motivation to Take Their Medication (Compliance)
Multiple Medications and Disease States (Confusion)
Page 7
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II – Mason Caribee at Home
The Patient of “The Electronic Physician”
Instant Access to Their Own Medical Record (Allergies, Meds List, Problem List, etc.)
E-Consults and e-Communication with Physician
Straightforward Education on Disease State
Increased Compliance Through Physician Directed Education on Their Medication
Page 8
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act III – Dr. Medici at Home
Challenges for a Typical Physician
Time
No Remote Access to the Medical Record
No Time to Visit with Pharma Reps to Learn about New Medications
Direct to Consumer Advertising on Medications
No Access to their Schedule
No Ability to Work Ahead (or Catch Up) on Tasks (Rx Renewals, Review Labs, Sign Off on Notes, etc.)
Page 9
A Day in the Life
The Electronic Physician
The Rainbow Room at Rockefeller Center
New York, NY
September 8, 2005
Act I—Mason Caribee Visits Dr. J. Medici
Nurse: Laurie McGraw
Mason Caribee: Stu Scholly
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
Act II—Mason Caribee At Home
Patient: Stu Scholly
Wife: Marissa Zolna
Act III—Dr. Medici at Home
Dr. Medici: Jim Bergmann, MD
Pharmaceutical Rep: Devin Paullin
“The Electronic Physician”
Instant, Anywhere, Anytime Access to the Medical Record
Convenient Access to Educational Programs 24/7/365 (70% Outside of Office Hours)
Ability to Review Schedule
Ability to Work Ahead (or Catch Up) on Tasks (Rx Renewals, Review Labs, Sign Notes, etc.)
Act III – Dr. Medici at Home
Page 10
ALLSCRIPTS TM
Inform. Connect. Transform.
Exhibit 99.4
ALLSCRIPTS TM
Inform. Connect. Transform.
Clinical Solutions Bookings
($ in Millions) $80
$70 $60
$50
$40 $30
$20 $10
$0
40%+ Growth
74% Growth
58% Growth
2002
2003
2004
2005 (E)
Page 2
Physicians Interactive Bookings
($ in Millions) $18 $16 $14 $12 $10 $8 $6 $4 $2 $0
5% Growth
32% Growth
2003
2004
2005 (E)
Page 3
Backlog
($ in Millions) $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0
2002 2003 2004 2005 (E)
Clinical Solutions
Physicians Interactive
Page 4
Historical/Forecast Revenue
($ in Millions) $140 $120 $100 $80 $60 $40 $20 $0
63% 56% 46% 37%
63% 54% 44% 37%
2002 2003 2004 2005 (E)
Clinical Solutions and Information Services
Medications
Page 5
Historical/Forecast EPS
$0.30
$0.20 $0.10
$0.00
($ 0.10)
($ 0.20)
($ 0.30)
($ 0.40)
($ 0.50) $0.22 to $0.24
$0.07
($ 0.40) ($0.13)
2002 2003 2004 2005 (E)
Page 6
Stock Price Performance $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 $18.73
$10.67
$5.32 $2.39
12/31/2002 12/31/2003 12/31/2004 9/7/05
Compound Annual Growth Rate of 111% from 2002 to 2004
Increase of 76% Since December 31, 2004
Page 7
Top 10 Questions…
Page 8
Top 10 Questions
1. How does Allscripts size the EHR market opportunity?
Number of Practicing Physicians in U.S. ~ 550,000 Market Penetration ~ 25% Available Market Opportunity 412,500 Average Selling Price per Physician $10,000 to $15,000
Market Opportunity (midpoint) ~$5.2 Billion
Doesn’t include ongoing support fees or transaction revenue opportunity
Page 9
Top 10 Questions (cont.)
1a. How does Allscripts size the IDX market opportunity?
Market Opportunity (midpoint) $5.2 Billion IDX Market Share ~ 20% IDX EHR Market Potential $1.0 Billion AHS Penetration ~ 16% @ 6/30/05
Remaining Market Opportunity ~ $870 Million
Does not include add-on sales opportunity to Allscripts’ existing customers in IDX base
Page 10
Top 10 Questions (cont.)
2. Is there seasonality in your bookings? What about revenue?
Short answer is yes…
Clinical Software Business – ~35% of our bookings historically have occurred in Q4. Remaining 65% tends to be evenly distributed over first three quarters. Revenue largely insulated from seasonality due to revenue recognition policy Medication Distribution Business – Seasonality largely a function of when people are more likely to be sick (Winter months) and distribution of flu vaccine (Q3 and Q4) Physicians Interactive Business – Moderate amount of seasonality tied to large pharma budgeting process. Less prominent than in Clinical Software business
Page 11
Top 10 Questions (cont.)
3. Speaking of revenue, why does Allscripts recognize revenue differently than others in the HCIT space?
Concluded that the services we provide are “essential” to the software
Unreasonable to think that a physician will use an EHR without some level of service upfront
We recognize both service and software fees on percentage-of-completion basis over the implementation period
Example
Software $700,000 Service 300,000 $1,000,000
2,000 Implementation hours
Q2 ‘05 500
500 hours are worked 2,000 or 25% x $1.0 million = $250,000 of revenue
Revenue recognition policy provides strong visibility into forecasted results
Page 12
Top 10 Questions (cont.)
3. (continued) – Backlog as of June 30, 2005 $76.3 Million $80 $70 $60 $50 $40 $30 $20 $10 $0 $13.2 $10.5 $40.5
Clinical Software Maintenance/Support
Physicians Interactive
Clinical Software Subscriptions
Clinical Software License/ Implementation Fees
Page 13
Top 10 Questions (cont.)
4. When will Allscripts start paying income taxes?
Tax loss carryforward of $149 million as of December 31, 2004
Potential use,
by year
2008
2007
2006
2005
Liability for book purposes may precede liability for tax purposes
Note: Excludes impact of acquisitions and subject to 382 evaluation
Page 14
Top 10 Questions (cont.)
5. What impact will expensing of stock options have on our operating results?
SFAS 123(R), Accounting for Stock-Based Compensation, will impact Allscripts beginning in 2006
2006 $2.0 $5.0
2007 $1.0 $4.0
Previously granted
Estimate for new issuances
(Pre-tax expense, $ in Millions)
Page 15
Top 10 Questions (cont.)
6. When will Allscripts convertible debt be converted into common stock? When will it start impacting earnings per share?
Our Senior Convertible Debt ($82.5 million with a 3.5 percent coupon) became convertible into 7.3 million common shares as of July 1, 2005
Given market value of debentures (contemplates option to convert and future coupons), we do not expect any conversion prior to July 2009
Impact of conversion is currently anti-dilutive; therefore excluded from fully diluted EPS calculation
Conversion becomes dilutive at an after-tax quarterly earnings level of approximately $5.2 million or $0.12 per share
Page 16
Top 10 Questions (cont.)
7. By the way, what are you going to do with all of that cash?
Page 17
Top 10 Questions (cont.)
8. Do you intend to sell the Medication Distribution business?
Page 18
Top 10 Questions (cont.)
9. You and Glen talk a lot about transaction revenues. What is it, who pays for it, and when will it make a difference?
What is it? Will take on several different forms
“Per Click” Fees (i.e., formulary, transmit prescriptions to retail pharmacy or mail order) Referral Fees (i.e., clinical trial referrals) Software Subsidies (i.e., managed care willing to subsidize eRx)
Who will pay for it? Depends on the form. Will not be the physician. In fact, they may participate in the fees
“Per Click” Fees = PBMs, Payors, Retail Pharmacy, etc. Referral Fees = Pharma, CRO’s, etc.
Software Subsidies = Managed Care Organizations
When will it make a difference?
$1 million in 2004, driven by ~ 8 million transactions Estimate 2005 transactions > 20 million transactions
Page 19
Top 10 Questions (cont.)
10. What is the ongoing operating model for each of Allscripts businesses?
Medication Services
Annual revenue growth expected flat to low single-digits Gross margin of 18 to 20 percent of revenue OI margin of 4 to 6 percent of revenue (1)
Clinical Solutions
Annual revenue growth of approximately 40+ percent Gross margin of 62 to 68 percent of revenue OI margin of 22 to 26 percent of revenue (1)
Physicians Interactive
Annual revenue growth of approximately 30 to 40 percent Gross margin of 40 to 45 percent of revenue OI margin of 10 to 15 percent of revenue (1)
20+% total Operating Income within 2 years
(1) Reflects fully burdened operating expenses
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Private and Confidential
Exhibit 99.5
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Clinical Solutions Group Sales Process Overview
Steve Brewer Executive Vice President of Sales
CSG Sales Overview
CSG Sales Organization Overview
Typical EHR Sales Cycle
Sales Management Process
Why Medical Groups Select Allscripts
3
Who Are Buyers Considering?
Most Requested Product Reports
The following 10 vendor product reports are those that were the most often requested by healthcare providers, over the past year, using Platinum KLAS Online, a web-based tool for vendor performance monitoring and reporting.
1. Allscripts TouchWorks (Over 25 Physicians)
2. Lawson
3. eScription EditScript
4. Epic EpicCare Ambulatory (Over 25 Physicians)
5. Kronos Timekeeper v.4-5
6. GE Centricity Physicians Office EMR (Over 25 Physicians)
7. NextGen EMR (Over 25 Physicians)
8. Oracle PeopleSoft
9. Picis Ibex PulseCheck
10. Infinium
Source: 2005 KLAS Mid-Year Report (All Products in the Industry)
4
Sales Team
New Sales
3 Area Vice Presidents
21 Sales Execs -$3.75MM Quota/Rep
National Accounts
3 Senior Sales Executives
Focused on Largest Practices and Strategic Initiatives
Account Management
5 Account Managers
Focused on Add-On Sales of <$1 MM to Existing Clients
Clinical Consulting
Physician and Clinician Team
Focused on Demonstrations, Reference Sites, Utilization and Clinical Assessments
SMB Market
Direct Sales
VARs
Partners
5
Typical EHR Sales Process
Prospecting Qualified Lead RFP Demo Reference Site Visit Contract
Client Decision Time-line
6 to 12 Months from RFP to Contract Signing
Varies in Time by Practice Size, Complexity and Budget Process
Typical Decision Makers
Physicians
Executive Director
CIO and IT Group
6
Managing the Sales Process
Measure Against Key Sales Process Milestones
Probability Adjusted Sales Forecast
Win/Loss Reporting and Analysis
Marketing Focus by Client Size
Large Groups: Relationship Marketing (e.g. Executive Summits, Trade Shows, etc.)
Small Groups: Direct Marketing (e.g. Lead Generation, Direct Marketing, etc.)
7
Why Medical Groups Select Allscripts
Credibility
Top Rated EHR (KLAS, MS-HUG, Forrester, TEPR)
Proven Results (“Blue Chip” Clients & Documented ROI)
Partnerships & Interoperability
IDX—Preferred Access to 70% of Large Groups
Leadership Position on National Interoperability and Standards Initiatives
Depth of Product Offering
Commitment to Ambulatory EHR
Clinical Trials, iHealth, Pay-for-Performance
8
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