1. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute.© 2012 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute.© 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Contract Management Best Practices October 23, 2015 1

2. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. » PresentersPresenters Jessica Vicars, Director, Product Management

3. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Centralizing Contracting Is the current situation? Centralize contracting? To achieve goals through centralizing contracting?

4. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Centralizing Contracting Is the current situation?

5. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Current Status- Decentralized Contracting Is decentralized contract management negatively impacting your organization?

6. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Current Situation

7. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Current Situation Inefficient and redundant processes Lost opportunity for cost reduction resulting from lack of visibility into contracted products & services Increased risk

8. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Inefficient Processes Inefficient and redundant processes- individuals across multiple departments completing the SAME tasks- –Identifying vendors, researching market availability –Negotiating contracts- potentially with the same vendor –Creating processes and best practices –Storing, filing and accessing contracts –Lost contracts

9. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Lost Opportunity for Cost Reduction Lack of visibility into contracted products & services creates inability to: –Identify opportunities for vendor consolidation and cost reduction –Track rebates and commitments –Negotiate new contract terms at renewal and expiration –Negotiate volume discounts

10. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Increased Risk Lack of visibility to all contracts and all vendors increases risk to: –Registering and authenticating 100% of vendors OIG Sanctions Check Financial data FEIN verification –HIPAA compliance, identification of all Business Associates –DNV and Joint Commission requirements for evaluating vendors & contracts –Achieving diversity spend goals –Contracting with vendors you should not be doing business with

11. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Decentralized contracting causes…

12. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. An example… Health system expanding through mergers & acquisitions… redundant work continues 57% of spend for identical services was contracted by separate departments with no knowledge of the other’s contracting need Analysis revealed… 41 temporary labor agreements, 18 medical transcription companies HFMA, March 2014, Centralized Contracting, An Imperative for Reducing Health System Costs Spectrum Health Grand Rapids, Michigan

13. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. An example… Paper-based contracts across multiple departments DNV advised implementation of contract repository and better internal controls Inefficient, time consuming redundant processes across multiple areas Vendormate, 2014, Hoag Memorial and Vendormate Contract Manager Hoag Memorial Hospital Newport Beach, CA

14. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Centralizing Contracting Centralize contracting?

15. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Centralized Contracting

16. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Benefits Centralizing Contracting BENEFITS Save Time Gain Visibility Reduce Costs Improve Compliance

17. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Benefits Centralizing Contracting Save Time Minimize redundant processes across your organization Reduce time spent locating contracts Simplify reporting

18. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Benefits Centralizing Contracting Gain Visibility Understand where cost reduction opportunities exist Understand progress towards diverse spend metrics Gain control over purchased services Improve ability to assess quality and improve outcomes

19. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Benefits Centralizing Contracting Consolidate vendors Leverage larger volumes for purchasing negotiations Capture rebate opportunities Eliminate fees associated with missed volume commitments Drive contract compliance- ensure your contracts are used Reduce Costs

20. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Benefits Centralizing Contracting Ensure all contracted vendors are credentialed & sanctions free Enable HIPAA compliance through more effective Business Associate oversight Conduct contract evaluations for DNV & Joint Commission requirements Improve patient safety Improve Compliance

21. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Centralizing Contracting To achieve goals through centralizing contracting?

22. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. How to Achieve Benefits of Centralized Contracting ACHIEVE RESULTS 4 Initiate a new source to contract process 1 Gain buy-in from the whole organization 5 Maintain engagement with cross- department stakeholders 2 Implement a contract lifecycle management solution 3 Analyze contract data, prioritize cost reduction initiatives

23. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. How to Achieve Benefits of Centralized Contracting 1 Gain buy-in from the whole organization 1.Set goals 2.Ensure all departments are aware of the benefits to their organization 3.Ensure Compliance is involved 4.Put a strong policy in place to enable a single thought process for selecting, managing, evaluating and negotiating contracts.

24. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. How to Achieve Benefits of Centralized Contracting 2 Implement a contract lifecycle management solution 1.Understand what is needed in a technology solution to support full enterprise contract lifecycle management 2.Leverage implementation as catalyst for process change

25. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. ECLM- What to Look For Key features for successful centralization of your contracting process  Integrated sourcing solution that enables stakeholder to be engaged from the very beginning, visibility throughout process  Integrated sourcing, vendor management and contract platform to centralize the entire process  Flexible security configurations to accommodate your department or group level needs  Robust reporting capabilities  Collaboration and workflow tools  No extra fees for additional users or contracts  Automated notifications and trackers

26. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. How to Achieve Benefits of Centralized Contracting 3 Analyze contract data and prioritize cost reduction initiatives 1.Leverage centralized data and reporting to zero in on target areas 2.Take close look at: –Purchased Services –Technology –Operating Room –Cardiology/cath lab –Laboratory

27. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. How to Achieve Benefits of Centralized Contracting 4 Initiate a new source to contract process 1.Manage new product/service requests and evaluations process centrally. 2.Engage key stakeholders throughout the process. 3.Implement contract execution process to ensure tracking of rebates, commitment and milestones.

28. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Driving Cost Reduction in Your New Process Key actions for driving cost reduction & quality improvement  Assign supply chain team member to manage new product/service requests. Provide visibility to stakeholders on progress and actions.  Use your GPO- but understand all of your options. Initiate process to evaluate 2-3 additional vendors outside of requested vendor.  Complete sanction checks, financial & risk profile assessment at the very beginning.  Compare bids and potential savings opportunities. Ensure stakeholders have visibility.  Provide access to all of the same data to all stakeholders.  Provide tool for collecting and reviewing feedback- clinical financial and operational.

29. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Contract Execution to Improve Downstream Results Improving upstream practices for downstream results  Assign tasks to contract owners.  Determine if vendor is a Business Associate at point of onboarding.  Implement process for tracking volume commitments and rebates- including receipt of $$.  Ensure renewals and expirations are effectively captured and tracked.  Conduct contract evaluations to document quality & performance, meet DNV & Joint Commission requirements.  Ensure ongoing tracking of vendor compliance and sanctions screening.

30. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. How to Achieve Benefits of Centralized Contracting 5 Maintain engagement with cross- department stakeholders 1.Review results- did we achieve our goals? 2.Were there steps in the process in which additional stakeholders should be involved? 3.Are the appropriate policies in place? 4.Continue ongoing internal communication around processes and benefits.

31. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Benefits Centralizing Contracting BENEFITS Save Time Gain Visibility Reduce Costs Improve Compliance

32. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. Company Overview >Largest e-Commerce SaaS trading network in healthcare, encompassing transaction management, order-to-cash, procure- to-pay (“P2P”), enterprise content and analytics >Transact and collaborate within a single platform to more effectively manage supply chain complexity, price alignment, and costs >GHX credentials vendor representatives operating to meet the growing regulatory compliance issues in healthcare Leader in Healthcare Supply Chain Automation GHX is THE healthcare supply chain… $62 billion + Transaction volume in the last 12 months $119 million + Number of requisitions, POS, and invoices that have been processed in last 12 months 441,000 + Trading partner connections established and managed by GHX $6 billion + Money GHX customers have saved since 2010 using GHX solutions 10,650 Number of supplier divisions (>400 manufacturers) 833,319 Number of hospital beds represented by GHX members 22,880 Number of healthcare provider facilities (>4,100 hospitals) 85% Percentage of med-surg products represented by members

33. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. GHX Provides the Solution GHX Exchange Community Management Master Data Services Integration Services Transaction Management GHX Exchange Community Management Master Data Services Integration Services Transaction Management Contract LifecycleProcurement Process Spend analysis Supplier Assessment Supplier Identification Sourcing Onboarding Contract Management Catalog Management Procurement Price Validation Order Fulfillment Invoicing & reconciliation Payment

34. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. GHX Provides the Solution GHX Exchange Community Management Master Data Services Integration Services Transaction Management GHX Exchange Community Management Master Data Services Integration Services Transaction Management Contract Lifecycle Spend analysis Supplier Assessment Supplier Identification Sourcing Onboarding Contract Management Catalog Management Procurement Price Validation Order Fulfillment Invoicing & reconciliation Payment

35. © 2015 Global Healthcare Exchange, LLC. All rights reserved. GHX proprietary information. Do not copy or distribute. QuestionsQuestions