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
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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.
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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
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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.
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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
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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.
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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.
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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
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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