Global HealthCare Exchange Canada Trade Exchange Adoption A MIS 6150 Case Study Monty Perham Michael Aldor Chen Ming Lee Canada

Slide 2 Outline Organizational description Organizational problem Information aspect of problem IT/IS impact on information IT/IS - based alternatives Pros & cons of alternatives Chosen solution Messages for modern leaders

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 3 Canada Organizational Description GHX Background Ownership ◦ Industry Structure ◦ Global presence ◦ GHX Canada Management ◦ Separate and distinct Organizational Description

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 4 Canada Organizational Description President/CEO Executive Coordinator VP Human Resources Chief Financial Officer VP General Council Exec. Director Premier Relationship Exec. Director HCA Relationship VP Operations VP Sales & Marketing VP Professional Services General Manager Europe Organizational Description

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 5 Canada Organizational Description The GHX business model ◦ Open and neutral exchange ◦ “eBay” for healthcare supplies Lower supply chain costs ◦ Maximize products purchased electronically ◦ Minimize the cost of connectivity ◦ Automate manual processes ◦ Reduce errors in the purchasing process Organizational Description

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 6 Canada Organizational Description Organizational Description

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 7 Canada Organizational Problem Drive adoption rates ◦ Facilitate hospital and supplier adoption Recover costs ◦ Begin charging hospitals Overcome existing barriers ◦ Technology barriers ◦ Regulation ◦ Current processes and relationships Organizational Problem

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 8 Canada Information Aspect of Problem ◦ Hospitals  Supply procurement is different for each hospital  Who sells what and when can they deliver  How to get the best price ◦ Suppliers  Difficulty establishing relationships with hospitals  Issues with billing and shipping services  Provide up-to-date product info including pricing ◦ GHXC  How to best manage above information Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 9 Canada Information Aspect of Problem Connecting Hospitals with Suppliers ◦ Existing: Point-to-point electronic connection ◦ Proposed: “Hub” method of exchange electronic connection Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 10 Canada Information Aspect of Problem Point - to - point simulation ◦ Each of you has a bag with a SKU (do not open) ◦ Hospital can only talk to one supplier at a time ◦ Need a volunteer to find SKU ABC123 Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 11 Canada Information Aspect of Problem Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 12 Canada Information Aspect of Problem Hub simulation ◦ Need a volunteer to find SKU SupplierSupplier SKUUnified SKU Pashniak, DanABC Bannister, Leah A.123XYZ Bedi, Parmeet K.EEP Buchholz, Mark G.CEC Chartrand, Shane A.KIT Derksen, Tanya G.KIT Fox, Casey N.KIT Gandhi, MichaelKIT Gavinchuk, Trevor L.SMT Gerrard, KimberleyTMS Loewen, Christopher W.SMT Mann, AbbySMT Olson, Raymond SeanAEB Sanders, Christine J.BEA Swanson, Glen H.EAB Travica, BobEAN Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 13 Canada Information Aspect of Problem Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 14 Canada Information Aspect of Problem GHXC has to show value in following areas to hospitals and suppliers Information Aspect

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 15 Canada IT/IS Impact on Information Many different types of systems ◦ Web-based ◦ EDI ◦ Custom solutions High cost to get Hospitals and Suppliers integrated IT/IS Impact

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 16 Canada IT/IS Impact on Information IT/IS Impact

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 17 Canada IT/IS-based Alternatives Solutions revolve around connectivity options: 1. Single technology focus ◦ Web-based ◦ EDI ◦ Custom solutions 2. Hybrid approach ◦ Combination of technologies above Alternatives

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 18 Canada Pros & Cons of Alternatives Pros Focus on needs of distinct market class Reduces support costs Cons Limits customer flexibility Reduces size of target market Against “open” and “neutral” business model Pros & Cons Single technology focus

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 19 Canada Pros & Cons of Alternatives Pros Flexibility with technical connectivity Meets needs unique to each hospital Larger market potential Follows “open” and “neutral” business model Cons Increased complexity Increased costs Pros & Cons Hybrid approach

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 20 Canada Hybrid approach chosen ◦ Flexibility of connectivity options ◦ More market and revenue potential ◦ Meets “open” and “neutral” business model Chosen Solution Solution GHXC Exchange

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 21 Canada Chosen Solution Regardless of technology, organizational problem is adoption GHXC needs to: ◦ Distinguish exchange from traditional purchasing ◦ Convince customers that exchange provides value Solution

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 22 Canada Chosen Solution Strategies to facilitate adoption include: ◦ Education on cultural change of purchasing ◦ Financing for technology setup costs ◦ Generating perceived value by charging hospitals ◦ Offer option of transactional versus subscription- based billing ◦ Partner with competitors to ease customer connectivity Solution

Org Description Org ProblemInfo Aspect IT/IS Impact AlternativesSolutionMessagesPros & Cons Slide 23 Canada Messages for Modern Leader Communicate value to customers Meet unique needs of different customers Identify and reduce barriers Take change management seriously Leverage exponential benefit of networks One system better than many independent ones Effectively measure costs and benefits of IT Use IT to drive costs out of the supply chain Messages

Canada Slide 24 Question & Answer