The LSTAT Value Equation: Prospective Benefits

Reduced morbidity, mortality and disability through earlier, continuous care.
"Flexible ICU" approach for over-crowded or under-equipped facilities.
Reduced length of hospital stay as a result of earlier, continuous care.
Improved efficiencies via continuous monitoring, data storage, collection and transmission.
Improved efficiency through enhanced triage and related care.
Reduction of patient transport resources and risks through improved portability and capability.
Wider selection of destination hospitals for optimum patient allocation.
Technology upgrades and enhancements.
"One Stop Shop" for sales, training, service, support and upgrades for all devices and disposables.

LSTAT User Survey Results

In Army field evaluations:

The LSTAT system was highly acceptable as an ICU bed/station, for en-route care, and for transports inside a fixed field hospital.
LSTAT use as a Forward Surgical Team OR table rated as acceptable.
LSTAT subsystems were highly acceptable.

In Civilian Hospital Setting:

LSTAT system was successfully integrated with the hospital wireless network.
All caregivers reported the ability to properly treat the patient and provide appropriate care, even in a remote setting with no other equipment.
All critical changes in vital signs were detected and addressed in a timely manner.

Caregiver Comments

“Equipment trained itself”

“Will be hard to do it the old way”

“Better movement platform to CT - stable transport platform (in hospital); never lose vital signs”

“Nurses did not want to do anything without it”

“Internal Medicine doc loved it - enthralled with data trend capability”

“LSTAT puts focus back on patient”

“Want LSTAT now”

Key Investment Considerations

Uniquely Positioned as a Systems Integrator
Strong U.S. Congressional Support
Strong Relationships with Key Domestic Military Buyers
Strong Relationships with Key International Military Buyers
Strong Relationships with Key Suppliers
Strong Relationships for Commercial Applications
Received FDA Clearance on LSTAT system (K965117)
Received Export Approval from U.S. Department of State and Commerce
Strong Intellectual Property Protection
Access to Favorable Production Capability
Experienced Management Team

Messages For Investors:

The LSTAT Commercialization Panel included representativies of pre-hospital and in-hospital, military and civilian, domestic and international medical leadership. The following are quotes from their summary document:

"LSTAT has the potential for being the standard of care and reimbursement."

"Excellent application in-hospital."

"Disaster response application is a global opportunity."

"Readily adapted to by nurses and doctors (ease of use)."

"An excellent product: Integrated commercial-off-the-shelf (COTS) devices and information system is novel."

"Flexible ICU market could be huge."

"Wireless data capability is attractive."

"Product taps into major shifts in healthcare delivery (earlier in continuum, more out-of-hospital, economic resource utilization, etc)."

"System is ready to migrate into hands of users."

"Given 5000 hospitals in US, each with 2 ICUs that have on average 10 beds, that's 100,000 ICU beds. Even 10% of that market is 10,000 LSTATs at 2 per hospital...and that's just ICU applications. Every ICU also has a crash cart that LSTAT could replace with even greater capability: mobile life support technology."

"LSTAT is forerunner of derivatives for more sophisticated application or unusual environments, i.e., opportunity is bigger than LSTAT."

Trauma Statistics

Trauma is leading cause of death in the first half of life (ages 1 to 44). [Ref. 1]

Three times more Americans die of trauma each year than died in the Vietnam War. [Ref. 1]

Every 10 years, more Americans die of trauma than have died in all U.S. military conflicts combined. [Ref. 1]

Trauma causes more deaths annually in the U.S. than all diseases combined. [Ref. 1]

40% of U.S. healthcare spending, over $100B, is for management of trauma patients [Ref. 1]

· Lost productivity from trauma patient disabilities is the equivalent of 5.1 million years at a cost of over $65B.

· For patients who are killed, 5.3 million years of life are lost at a cost of over $50B

Average EMS response time from injury to EMS on the scene is 6-8 minutes, with as much as 30-40 minutes on scene, and transport to hospital another 8-10 minutes [Ref. 1]

· The "Golden Hour" has passed before a trauma patient is seen by a doctor

Costs of Trauma in a Level I Trauma Center [Ref. 2]

· Approx. $15,000 average per patient

· Approx. $23,000-$47,000 average per patient who had one of the following, and approx. $110,000 per patient who had 3 or more of the following:

· Adult respiratory distress syndrome
· Acute kidney failure
· Sepsis
· Pneumonia
· Decubitis ulceration
· Wound infection
· Cost exceeded reimbursements in those cases involving any of the above conditions

Trauma in Urban-vs-Rural Setting [Ref. 3]

· Most common cause of death:

· Urban: head injury
· Rural: multi-system organ failure

· Percent injured who die at scene:

· Urban: 40%
· Rural: 72%

· Percent who die in hospital during first 24 hours:

· Urban: 40%
· Rural: 16%

· Percent who die in hospital after first 24 hours

· Urban: 15%
· Rural: 12%

· General

· Patients in rural areas were older and had less severe injuries
· Higher on-scene deaths in rural areas may be due to longer discovery and transport times

Worldwide, trauma ranks 5th among leading causes of death. [Ref. 4]

Violent deaths have increased worldwide. [Ref. 5]

· Homicide and suicide account for 20% - 40% of deaths in males aged 15-34

· Homicide is more frequent among men, increases with age, and is closely related with mental disorders

· Occupational deaths:

· Growing link with alcohol abuse
· Growing link with HAZMATs

· Home deaths

· Most deaths are of children under 5 and elderly women
· Traffic accidents is largest cause of death

· Head injury is leading cause

· Motorcyclists are highest risk
· Falls kill more people than traffic accidents and most falls occur at home

· Most burning deaths occur at home

At an average cost of $17,000 each, the lifetime medical costs of gunshot wounds in the United States in 1994 was about $2.3 billion, researchers estimate. [Ref. 6]

· Taxpayers picked up 49% of the tab, about $1.1 billion.

· About 18% of costs were covered by private insurance while other sources paid for about 33%.

Every 9 seconds someone in the United States is injured in a car crash, and every 13 minutes someone is killed. [Ref. 7]

Mortality patterns of people who become world leaders. [Ref. 8]

· Of 261 world leaders who died between 1965 and 1996, 118 died while in office, 44% violently, often by assassination.

· Of the 143 leaders who died after leaving office, 11% died violently.

Who dies in motor vehicle accidents?

Everyday:

· 115 people dead (like a DC-9 airplane crashing every day!)
· One dead every 13 minutes
· 70 males, 35 females, and 10 children killed
· Daily economic cost to society: $95M in fatalities, $214M in injuries, and $105M in property

Annually:

· The leading cause of death for persons from age 5 through 27 years old is motor vehicle crashes
· Annual economic cost to society is $150.5B ($33B due to fatalities)
· Alcohol related fatalities amounted to 17,274 people killed in 1995
· Motorcyclists were about 16 times as likely as passenger car occupants to die in a motor vehicle crash

REFERENCES: 1. "Pre-Hospital Trauma Life Support", Third Edition, 1994 Mosby-Year Book, Inc., various pages. 2. "The Complications of Trauma and Their Associated Costs in a Level I Trauma Center" by G. E. O'Keefe et al, Archives of Surgery, 1997, Vol. 132, pp. 920-924. 3. "Trauma Deaths in a Mature Urban vs Rural Trauma System - A Comparison" by F. B. Rogers et al, Archives of Surgery, 1997, Vol. 132, pp. 376-382. 4. 1996-1997 World Health Organization Budget, Item 178. 5. World Health Report 1997, World Health Organization, Section 7. 6. The Journal of the American Medical Association August 4, 1999, 282, pp. 447-454. 7. National Highway Traffic Safety Administration 1997 Traffic crashes, injuries and fatalities-preliminary report. 8. "Patterns of Death in World Leaders", Military Medicine, Vol 163, No. 12, December 1998, pp. 797-800. 9. National Highway Traffic Safety Administration (NHTSA).

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Updated: June 23, 2005

© Copyright 2005 Integrated Medical Systems, Inc.