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Breakout Session # Dave Catino, AVP, Strategy & Planning

Enterprise Contract Management HCA’s Approach. Breakout Session # Dave Catino, AVP, Strategy & Planning Kevin Bond, Director, Supply Chain Systems Development October 17, 2005 11:00 – 12:00. Hospital Corporation of America (HCA). As of June 30, 2005, the Company operated: 190 hospitals

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Breakout Session # Dave Catino, AVP, Strategy & Planning

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  1. Enterprise Contract ManagementHCA’s Approach Breakout Session # Dave Catino, AVP, Strategy & Planning Kevin Bond, Director, Supply Chain Systems Development October 17, 2005 11:00 – 12:00 NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  2. Hospital Corporation of America (HCA) As of June 30, 2005, the Company operated: • 190 hospitals • 92 freestanding surgery centers (including seven hospitals and eight freestanding surgery centers operated through equity method joint ventures) • located in 23 states, London, England and Geneva, Switzerland NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  3. Healthtrust Purchasing Group (HPG) • Supports not-for-profit and for-profit acute care hospitals, ambulatory surgery centers, alternate care sites, and physician practices • Approx. 1500 member facilities and vendors • Annual purchasing volume of more than $6 billion • Committed to obtaining the best price for clinically-recommended products • Continuously evaluating and improving the services to the patients, physicians and clinicians it serves. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  4. Driving Factors • Original Scope - two separate initiatives • Replace Item Management System (IMS) • Create a more robust Contract Management System (CMS) • Single solution to support long-term standardization and contract management • Scope reduced to just CMS • No single vendor solution that could replace both while maintaining current functionality • Separate initiative within Legal Department to track Physician contracts NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  5. Driving Factors • New Scope • HPG Requirements • Support HPG contracting initiatives • Improved data accuracy, productivity, and customer service • Support processes necessary for future growth of HPG • Legal Requirements • Manage physician contract from preparation, negotiation, approval, payments, and storage • Enhance compliance with law and corporate policy • Make payment terms easily available for review before payments are made • Tracking of expiration dates • Create an enterprise physician contract database with management reporting capability NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  6. Solution Matrix Enhance IMS Enhance SCRUBS Enhance RAFT Enhance EDW License Software RFx Workflow Document Management Item Detail Maintenance GPO Member Communication Rebate & Admin Fee Tracking Spend & Savings Analysis RFI RFQ RFP Routing Reviews Approvals Terms & Conditions Contracts Addendums Vendors Items Prices Tiers Groups Launch Pkgs Letters of Commitment Catalog Customer Service Amounts Allocations Opportunities Results Supports HPG, HCA Supply Chain, & Legal • Supports HPG & HCA Supply Chain: • Contract Loading • Standardization • Operations • Finance • Division-based contracting NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  7. Major Risks NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  8. Operational Impact NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  9. HPG Alternatives NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  10. Legal Alternatives NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  11. Vendor Selection • Gathered and documented requirements • Identified and researched potential software suppliers • Sent RFI to 9 potential software suppliers • Sent RFP to 5 candidate companies • Selected Upside NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  12. Key Requirements Met by Upside • Web-based zero footprint • Enables the use of standard templates for all contracts • Allows collaborative contract creation and negotiation • Provides centralized contract storage and enterprise reporting NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  13. Where Are We Now? NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  14. Legal Implementation • Application configuration and testing • Development of custom workflows • Pilot selection, kick-off, and training • Pilot evaluation • Implementation: May 2005 – Q1 2007 • Stats Since Pilots Began In May • 250 Users • 78 Organizational Units (facilities, clinics, surgery centers, etc.) • 138 Contracts Approved NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  15. HPG Implementation • Application configuration complete and in testing • Conduct Training • Conduct Kick-off meeting in January 2006 • Evaluate results NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  16. Expected Results • Increased visibility across the enterprise of all contracting activity • Enhanced reporting by business areas • Increased administrative controls over contracting practices • Access to the current versions of contracts • Reduced administrative effort NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  17. Next Steps • Continue phased implementation • Further institutionalize the application using existing features • Increase standardization of contracting practices across the enterprise • Reporting to identify contracting trends and conduct contracting analysis • Expand to business areas outside of Legal and HPG NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  18. Lessons Learned • Configuration training - will reduce configuration time • Complete configuration and testing in a test environment prior to certification - will reduce certification time • Identify and train key personnel for each division - local expert becomes point-of-contact NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  19. Lessons Learned • Business champion training early in project – drives decisions about which of the application's features and functionality are best suited for the business. • Focusing requirements on “what” vs. “how” - ensures that the desired business processes are met and not dictated by the software • Prioritize requirements – eliminates “nice-to-haves”, which consume valuable time and resources NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  20. Lessons Learned • Conduct a project kick-of meeting - helps all core team members understand their role in the process • Define contracting processes early - contracting is not as structured as other processes • Define all contract types that are used - enables quality contract templates to be built • Users prefer document management to be “MS Word – Like” - have a plan to support this need. Ensure you understand the direction of your vendor regarding document editing and management NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

  21. Lessons Learned • Define who reviews and who approves your contracts - sometimes this isn't as obvious as everyone might think • Include your legal department with you contracting team - ensures everyone agrees on contract templates and how they will be managed • Change management - plan for significant training and support for those affected NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners

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