Blood Utilization Program Bob Karcher, Vice President, Contracting Services Praful Shah, Vice President, Clinical Diagnostic Services Harvesting Savings Through an Effective Blood Utilization Program BK As your GPO we take seriously our role in providing lower cost alternatives and cost savings opportunities for our hospital members. Those opportunities become more challenging and smaller in scope as raw materials costs rise and medical device companies continue to find creative ways to pass along new costs (like lost revenue from recalls, a lengthier FDA 510K process and federal medical device tax) As a former supply chain exec, who was charged to deliver $8-20million dollar documented savings plans each year, I know first hand that non-labor initiatives rarely carry savings expectations in the double digit range. Praful and I believe (after spending the last 2 ½ years working through the various components) that taken in its entirety this program has tremendous potential for savings in the 15%-40% range. It can also be viewed modularly with individual components turned on for significant savings. It’s been a long slog to get all our ducks in order on the total program, but we’re very excited to outline it for you now. 2013 Saving Strategy October 12, 2012 1

Total blood expense ranges from $3.0-12.0M per facility depending on surgical specialties and perioperative activity Bk No matter the blood bank source, the total blood cost in an acute care facility - particularly the cluster of academic, specialty-intense hospitals we have in this region – is a big ticket item.

Key Components of an Effective Blood Management Program Equipment and consumables to re-infuse patients perioperatively Blood typing and hemoglobin testing equipment and software Clinical Benchmarking Software with peer data Clinical consulting for recommending improved blood use protocols appropriate to specialty and technology Blood supplier willing to trade lower margins for growth Improved donor collection, tracking, inventory, and storage equipment to optimize supply and limit waste PS So from where we sit, we realized that developing a simple step approach designed around process flow, is the best way to develop an effective program. Such program would include Perioperative equipment and consumables, Laboratory testing systems, Clinical consulting, Evidence based protocols reflecting current techniques CONTINUE 3 3

Blood Management Assessment – Required Information Total Hospital Wide (All Service Lines) Cardiovascular Service Line Trauma Service Line Orthopedics Service Line Allogeneic Red Blood Cells Pre-surgical Autologous Donated (PAD) Red Blood Cells Cryoprecipitate Plasma Platelets Total Number of Procedures Number of Transfused Procedures Key Questions What date range are the data in the table above from: _______________________ What is your acquisition cost per unit for: Allogeneic Red Blood Cells: $ PAD: $ Cryoprecipitate: $ Plasma: $ Platelets: $

Anytown Total Blood Spend Units Transfused Cost per Unit Total Cost Allogeneic RBC 28,452 $200.00 $5,690,400 PAD 376 $400.00 $150,400 Cryoprecipitate 2,031 $50.00 $101,550 Plasma 5,432 $55.00 $298,760 Platelets (Pheresis) 2,084 $500.00 $1,042,000 TOTAL $7,283,110

RBC Utilization

Platelet Utilization

Plasma Utilization

Cryoprecipitate Utilization

Transfusion Rate

Overall Cost Reduction Estimate Going From Current Level to… IOL Average IOL Best in Class CV RBC ~$100K ~$250K CV Platelet - ~$200K CV Cryoprecipitate ~$10K ~$40K CV Plasma ~$25K Ortho Allogeneic RBC Ortho PAD ~$50K ~$125K TOTAL ~$740K % of Total Hospital Blood Spend 2.7% 10.1%

The GNYHA Services Blood Management Program