11 What does the buyer expect? The Future of Healthcare Supply Chain November 4 th, 2014

2 Healthcare Landscape 2014: Changing Times Under reform, fully phased-in hospital cuts (2019): – At BEST, baseline payment MINUS 14% (across-the-board cuts only) – At WORST, baseline payment MINUS 20% (across-the-board PLUS quality cuts) Hospitals need a comprehensive strategy to minimize costs while maximizing quality patient outcomes

3 The Evolution of Healthcare Supply Chain Cost-Quality- Outcomes Utilization & Standardization Price Controls

4 CQO: A new way of decision-making… Cost: all costs associated with delivering patient care and supporting the care environment Quality: patient-centered care aimed at achieving the best possible clinical outcomes Outcomes: financial reimbursement driven by outstanding clinician care at the appropriate cost 4

5 CQO requires outreach. CQO requires supply chain leaders to build new and different types of relationships with: o Thought leaders from multiple departments o Finance/reimbursement teams o Medical leadership o Clinicians o Manufacturers o Distributors o GPOs

CQO, It’s a Healthcare Issue being led by Supply Chain… Consistent outcomes Improved quality of hospital experience Best practice medicine