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Perioperative Case Study

1

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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 disclose it to third parties. 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.

• 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

Strategic Decision

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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 disclose it to third parties. 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.

• 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

Methodology

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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 disclose it to third parties. 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.

• 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

Implementation

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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 disclose it to third parties. 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.

• 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

Outcome

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Perioperative Written Summaries

6

CategoryTPC

TotalsTPC % of

TotalsSuture

Superior 310 15% 0 0 39 34 41 39 0 55 0 68 0 0 34Acceptable 1603 80% 0 0 47 252 205 184 0 167 0 424 0 0 324Not Acceptable 40 2% 0 0 0 9 11 9 0 1 0 6 0 0 4Further 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 362Endomechanicals/Trocars

Superior 208 18% 0 0 24 11 22 63 0 74 0 14 0 0 0Acceptable 826 72% 0 0 26 126 165 281 0 68 0 160 0 0 0Not Acceptable 50 4% 0 0 1 23 4 17 0 1 0 4 0 0 0Further Eval Needed 71 6% 0 0 3 64 4 0 0 0 0 0 0 0 0Total Responses 1155 100% 0 0 54 224 195 361 0 143 0 178 0 0 0

Topical Skin AdhesivesSuperior 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Acceptable 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Not Acceptable 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Further Eval Needed 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Responses 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0

MeshSuperior 6 14% 0 0 0 4 2 0 0 0 0 0 0 0 0Acceptable 29 69% 0 0 0 9 10 0 0 0 0 1 0 9 0Not Acceptable 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0Further Eval Needed 7 17% 0 0 0 7 0 0 0 0 0 0 0 0 0Total Responses 42 100% 0 0 0 20 12 0 0 0 0 1 0 9 0

TPC Totals

TPC % of Totals

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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 disclose it to third parties. 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.

• 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

Lessons Learned

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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 disclose it to third parties. 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.

• “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

Current State – 2 months post award