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Perioperative Case Study




CONFIDENTIAL Property of MedAssets                              1
Strategic Decision

       • Objectives
                   – Material cost reduction in five historically problematic supply categories:
                     Suture, Endomechanicals, Trocars, Mesh and Topical Skin Adhesives
                   – Significant cost savings
                   – Change dynamics in ALL categories – this is about more than suture

       • Background
                   – Market share historically dominated by Ethicon
                   – Pricing historically controlled by supplier
                   – Marketplace rewarding TPC Virtual IDN Model
                   – Success with TPC standardization initiatives resulting in best of class
                     proposals

       • Current State
                   – Market share reflects widespread national & TPC acceptance of Covidien
                   – Clinical acceptance is no longer in question

TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will
not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC.
    disclose it to third MedAssets
Methodology


       • Category identification
       • Data review
       • Initiative approved for pursuit - TPC Council
       • Submission of RFP
       • Validation post RFP – TPC Council
       • Validation by TPC Perioperative Clinical Value Analysis
         Team
       • Validation by TPC Board of Managers
       • Strategic/logistical planning for implementation

TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will
not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC.
    disclose it to third MedAssets
Implementation

       • Strategic and logistical planning
                   –      Identification of project leads – TPC Corporate, Supplier and TPC Members
                   –      Timelines developed
                              •     Member needs
                              •     Resource allocation and coordination


       • C- Suite Involvement
                   – Presentations
                              • Data
                              • Expectations
                              • Communication throughout project

       • Partnership between Supplier, TPC and Aspen
         Healthcare Metrics
       • Physician to physician interaction


TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will
not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC.
    disclose it to third MedAssets
Outcome

       • 3 of 11 Members were already Covidien in majority of
         categories or facilities
                   – Large facility within one of the “Covidien” IDNs conducted an evaluation
                     and converted
                   – Remaining 2 members agreed to convert remaining products

       • Evaluations conducted at all but 1 Member
       • Clinical Acceptability vote – August
       • TPC Council vote – August
       • 9 of 11 Members commit to convert majority of product
         categories to Covidien



TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will
not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC.
    disclose it to third MedAssets
Perioperative Written Summaries
                                                          TPC TPC % of
                             Category                    Totals Totals
                             Suture
                                   Superior                310    15%    0   0   39 34     41    39   0    55   0 68    0   0    34
                                   Acceptable             1603    80%    0   0   47 252   205   184   0   167   0 424   0   0   324
                                   Not Acceptable           40     2%    0   0    0   9    11     9   0     1   0   6   0   0     4
                                   Further Eval Needed      57     3%    0   0    2 33     10     8   0     0   0   4   0   0     0
                             Total Responses              2010   100%    0   0   88 328   267   240   0   223   0 502   0   0   362
                             Endomechanicals/Trocars
                                   Superior                208    18%    0   0   24 11     22    63   0    74   0 14    0   0    0
                                   Acceptable              826    72%    0   0   26 126   165   281   0    68   0 160   0   0    0
                                   Not Acceptable           50     4%    0   0    1 23      4    17   0     1   0   4   0   0    0
                                   Further Eval Needed      71     6%    0   0    3 64      4     0   0     0   0   0   0   0    0
                                   Total Responses        1155   100%    0   0   54 224   195   361   0   143   0 178   0   0    0
                             Topical Skin Adhesives
                                   Superior                  0      0    0   0   0   0     0     0    0    0    0   0   0   0    0
                                   Acceptable                0      0    0   0   0   0     0     0    0    0    0   0   0   0    0
                                   Not Acceptable            0      0    0   0   0   0     0     0    0    0    0   0   0   0    0
                                   Further Eval Needed       0      0    0   0   0   0     0     0    0    0    0   0   0   0    0
                                   Total Responses           0     0%    0   0   0   0     0     0    0    0    0   0   0   0    0
                             Mesh
                                   Superior                    6   14%   0   0   0    4    2     0    0    0    0   0   0   0    0
                                   Acceptable                29    69%   0   0   0    9   10     0    0    0    0   1   0   9    0
                                   Not Acceptable              0    0%   0   0   0    0    0     0    0    0    0   0   0   0    0
                                   Further Eval Needed         7   17%   0   0   0    7    0     0    0    0    0   0   0   0    0
                                   Total Responses           42   100%   0   0   0   20   12     0    0    0    0   1   0   9    0
                                                          TPC TPC % of
                                                         Totals Totals




CONFIDENTIAL Property of MedAssets                                                                                                    6
Lessons Learned
       • Data validation
                   – “No cross” products
                   – Utilization patterns
       • Distributor involvement
       • C- Suite engagement
       • Inventory depletion/coordination
       • Adequate inventory availability
       • Communication, communication, communication
                   –      Supplier and members
                   –      TPC/Aspen Healthcare Metrics and members
                   –      Supplier and TPC/Aspen Healthcare Metrics
                   –      Supplier, Distributor(s) and TPC/Healthcare Metrics
                   –      Member to member
                   –      C- Suite to C-Suite
                   –      Clinician to clinician


TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will
not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC.
    disclose it to third MedAssets
Current State – 2 months post award
                   • “Mixed bag”
                              • Some physicians requesting competitive product
                              • Many physicians now willing to convert
                   • “Fine tuning” post-conversion
                   • Continuation of peer to peer discussions
                   • Continuation of C-Suite involvement
                   • Competitive tactics addressed pro-actively




TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will
not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC.
    disclose it to third MedAssets

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Texas Purchasing Coalition Presentation

  • 1. Perioperative Case Study CONFIDENTIAL Property of MedAssets 1
  • 2. Strategic Decision • Objectives – Material cost reduction in five historically problematic supply categories: Suture, Endomechanicals, Trocars, Mesh and Topical Skin Adhesives – Significant cost savings – Change dynamics in ALL categories – this is about more than suture • Background – Market share historically dominated by Ethicon – Pricing historically controlled by supplier – Marketplace rewarding TPC Virtual IDN Model – Success with TPC standardization initiatives resulting in best of class proposals • Current State – Market share reflects widespread national & TPC acceptance of Covidien – Clinical acceptance is no longer in question TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC. disclose it to third MedAssets
  • 3. Methodology • Category identification • Data review • Initiative approved for pursuit - TPC Council • Submission of RFP • Validation post RFP – TPC Council • Validation by TPC Perioperative Clinical Value Analysis Team • Validation by TPC Board of Managers • Strategic/logistical planning for implementation TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC. disclose it to third MedAssets
  • 4. Implementation • Strategic and logistical planning – Identification of project leads – TPC Corporate, Supplier and TPC Members – Timelines developed • Member needs • Resource allocation and coordination • C- Suite Involvement – Presentations • Data • Expectations • Communication throughout project • Partnership between Supplier, TPC and Aspen Healthcare Metrics • Physician to physician interaction TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC. disclose it to third MedAssets
  • 5. Outcome • 3 of 11 Members were already Covidien in majority of categories or facilities – Large facility within one of the “Covidien” IDNs conducted an evaluation and converted – Remaining 2 members agreed to convert remaining products • Evaluations conducted at all but 1 Member • Clinical Acceptability vote – August • TPC Council vote – August • 9 of 11 Members commit to convert majority of product categories to Covidien TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC. disclose it to third MedAssets
  • 6. Perioperative Written Summaries TPC TPC % of Category Totals Totals Suture Superior 310 15% 0 0 39 34 41 39 0 55 0 68 0 0 34 Acceptable 1603 80% 0 0 47 252 205 184 0 167 0 424 0 0 324 Not Acceptable 40 2% 0 0 0 9 11 9 0 1 0 6 0 0 4 Further Eval Needed 57 3% 0 0 2 33 10 8 0 0 0 4 0 0 0 Total Responses 2010 100% 0 0 88 328 267 240 0 223 0 502 0 0 362 Endomechanicals/Trocars Superior 208 18% 0 0 24 11 22 63 0 74 0 14 0 0 0 Acceptable 826 72% 0 0 26 126 165 281 0 68 0 160 0 0 0 Not Acceptable 50 4% 0 0 1 23 4 17 0 1 0 4 0 0 0 Further Eval Needed 71 6% 0 0 3 64 4 0 0 0 0 0 0 0 0 Total Responses 1155 100% 0 0 54 224 195 361 0 143 0 178 0 0 0 Topical Skin Adhesives Superior 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Acceptable 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Not Acceptable 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Further Eval Needed 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Responses 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0 Mesh Superior 6 14% 0 0 0 4 2 0 0 0 0 0 0 0 0 Acceptable 29 69% 0 0 0 9 10 0 0 0 0 1 0 9 0 Not Acceptable 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0 Further Eval Needed 7 17% 0 0 0 7 0 0 0 0 0 0 0 0 0 Total Responses 42 100% 0 0 0 20 12 0 0 0 0 1 0 9 0 TPC TPC % of Totals Totals CONFIDENTIAL Property of MedAssets 6
  • 7. Lessons Learned • Data validation – “No cross” products – Utilization patterns • Distributor involvement • C- Suite engagement • Inventory depletion/coordination • Adequate inventory availability • Communication, communication, communication – Supplier and members – TPC/Aspen Healthcare Metrics and members – Supplier and TPC/Aspen Healthcare Metrics – Supplier, Distributor(s) and TPC/Healthcare Metrics – Member to member – C- Suite to C-Suite – Clinician to clinician TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC. disclose it to third MedAssets
  • 8. Current State – 2 months post award • “Mixed bag” • Some physicians requesting competitive product • Many physicians now willing to convert • “Fine tuning” post-conversion • Continuation of peer to peer discussions • Continuation of C-Suite involvement • Competitive tactics addressed pro-actively TPC CONFIDENTIAL: This information is confidential and proprietary to the Texas Purchasing Coalition (“TPC”), its Members and/or its vendors. It is provided on the understanding that the recipient will not CONFIDENTIAL Property ofparties. If you received this information in error, please notify the office of the President of the TPC at 469-366-2105. He may instruct you to destroy it or return it to the TPC. disclose it to third MedAssets