Shared Services in Health Care

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Consolidated Demand Management
Presented by Chris SherbackPresident and
CEOOrmed Information Systems Ltd.
Developed by Derek GascoigneDirector of
Environmental Services Thunder Bay Regional
Hospital
Shared Services in Health Care A New Era of
Collaboration
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Who is Ormed?

• Started as supply chain consultants in 1985
• Leading Canadian software supplier since 1989
• Supply Chain, Finance, Business Intelligence,
  HR/Payroll, Accounts Receivable, Billing, Case
  Costing
• Exclusively dedicated to ERP for healthcare
• Over 350 hospitals running gt 5000 programs
• Less than 10 help desk calls per day

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Who is Ormed?

• Winner of Canadian E-Business Leadership Award
• First shared services solution in 1996
• ORMED X operating since 2001
• Processed gt 300 million in e-commerce
• Launching CDM in fall 2009

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Agenda

• Consolidated Demand Management (CDM)
• Virtual Group Purchasing
• e-Tendering
• e-Contract Management
• Cost Savings with a CDM Solution
• 2009 launch of free CDM software

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Consolidated Demand Management

• Market Characteristics Group Purchasing
• Shared services alliances have the power to
  consolidate demand to achieve volume discounts
• Group purchasing is available for a wide
  spectrum of agreements
• Legacy GPOs typically address only 35 of spend

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Consolidated Demand Management

• Market Characteristics Tendering
• Disjointed, paper-based system, costly, labour
  intensive and prone to error
• Cost prohibitive buyers and suppliers
• Difficult to coordinate and distribute workload
• Difficult to monitor and control results

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Consolidated Demand Management

• Market Characteristics Contract Management
• Disjointed, paper-based system, costly, labour
  intensive and prone to error
• Cost prohibitive cheaper to renew than replace
• Difficult to enforce compliance
• Difficult to monitor and control results

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Scope of Consolidated Demand Management

• Create virtual groups to consolidate demand
• For hospitals, clinics, doctor offices, and
  other healthcare facilities
• Membership to virtual GPOs varies from
  traditional GPOs
• Non-stock, capital items, and service contracts
  can all be consolidated

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Consolidated Demand Management free
Internet-Based Software
Virtual Group Purchasing
e-Tendering
e-Contract Management
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Consolidated Demand Management free
Internet-Based Software
Virtual Group Purchasing

• Supports all interface standards (EDI AnsiX12
  and Excel file formats).
• Send Items from MM master file.
• Create items or services to have demand
  consolidated.

• Send survey links to anyone with a valid email
  address.
• Anyone responding becomes a member of that
  buying group.
• Respond on-line or download an excel file and
  fill it out.

e-Tendering
e-Contract Management
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Consolidated Demand Management free
Internet-Based Software
Virtual Group Purchasing

• Consolidate demand from anyone with a valid
  e-mail address.
• Automatically keep track of total usage.
• All members are notified of changes.

• Ask and respond to member questions
• Attach item-file information when responding to
  surveys.

e-Tendering
e-Contract Management
Completed surveys are converted to tenders with
the click of a mouse.
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Consolidated Demand Management free
Internet-Based Software
Virtual Group Purchasing

• Send a link to your on-line tender to any
  merchant with a valid e-mail address.
• Post a link to your tender on any public
  bulletin board.

• Merchants can assign users to sections of
  tender.
• Merchants can Interface the tender to supply
  catalogues.
• Merchants can ask questions about any item or
  service question.

e-Tendering
e-Contract Management
View merchant responses side-by-side with an
editable score card on each response.
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Consolidated Demand Management free
Internet-Based Software
Virtual Group Purchasing
Awarding tenders automatically generates email
notices from predefined templates to all VGPO
members and merchants.
Awarded tenders are converted to binding
contracts.
e-Tendering
e-Contract Management
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Consolidated Demand Management free
Internet-Based Software
Virtual Group Purchasing
Contract updates can be downloaded into MMIS
automatically or manually on or before the
effective date.
Contracts from traditional GPOs can be uploaded
for automatic update to MMIS. The system will
accept contract updates at any time and notify
the providers.
e-Tendering
e-Contract Management
Contract edits can only be preformed when both
the merchant and the provider have approved the
changes. MedBuy and HeathPro contracts are not
editable.
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Buyer Task and Time Assumptions
Hours
Tasks
After Automation
1.00 - 4.00
Prepare Surveys to send to responsible parties
for usages
1.00
4.00 - 8.00
4.00
Retrieve usages from MM and respond to surveys
0.80 - 1.00
0.80
Follow up on outstanding surveys
1.00 - 1.25
1.00
Review volumes, verify and do package conversions
2.50
2.50 - 3.50
Data enter usage volumes
0.50 - 1.50
0.50
Receive and review survey
2.00 - 8.00
0.50
Prepare tender documents
3.00 - 4.00
Not Required
Retrieve, pre-screen, and sort submissions
4.00 - 6.00
4.00
Data enter item bid pricing
3.50 - 4.00
0.01
Communication related to entire process (time)
3.00 - 5.00
0.01
Notify vendors of awards (finalize contract,
prepare award lists and letters)
0.75 - 1.25
Not Required
Notify and manage buyers of contract updates
3.50 5.00
0.01
Update internal inventory control systems
Generate management reports of statistics,
finance, and key indicators
0.75 1.00
0.75
8.00 - 14.00
0.01
Enter new vendor and pricing for MM Catalog
Purchase Order fulfillment (from requisition to
receiving)
1.75 2.50
0.50
0.25 1.20
Expense code and reconcile invoice / Vendor
Not Required
0.25 - 1.25
Process payment and do cash flow analysis / Vendor
0.25
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Supplier Task and Time Assumptions
Hours
After Automation
Tasks
0.70 - 0.25
Time to search, qualify, and download Tender
Documents
0.25
0.75 - 1.05
Time to distribute item work to appropriate
department
0.01
8.00 - 32.00
Average time to respond per document
8.00
2.00 - 8.00
Average time to compile submission
Not Required
0.75 - 2.00
Print package and send
Not Required
1.20 3.00
Accept contract and update sales systems
1.20
0.25 - 0.70
Accept Purchase Orders and correct pricing / PO
0.01
0.25 - 0.30
Prepare shipping and Invoice
0.25
0.25 - 0.50
Respond to receipt discrepancies
0.01
0.20 - 0.50
Prepare Statements / Buyer
0.20
0.50 1.00
Manage collection of receivables / Buyer
Not Required
0.25 1.00
Reconcile Payments / Buyer
0.01
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Buyer Costs per Document
After Automation
Before Automation
500 to 25,000
Tender document
200 to 1,000 96
10 to 75
Requisition
5 to 20 73
50 to 100
Purchase Order
8 to 20 80
20 to 50
Payment
2 to 10 80
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Merchant Costs per Document
After Automation
Before Automation
500 to 25,000
Tender document
100 to 2,000 90
50 to 150
PO Fulfillment
25 to 50 67
5 to 25
Invoicing
5 to 25 0
5 to 15
Receipting
5 to 15 0
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Total Costs per Document
After Automation
Before Automation
600 to 9,000 93
2,500 to 125,000
Tender document
25 to 100 50
100 to 200
Purchase Order plus Fulfillment
30 to 50 33
50 to 75
Invoicing plus payment and receipting

• Assuming 4 vendors respond to each Tender

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Fall 2009 Launch of CDN

• Consolidated Demand Management is free
• Available to Healthcare organizations only
• Based on 20 years of supply chain expertise
• Allows benefits of shared services without many
  of the costs
• Look to www.ormedx.com

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Consolidated Demand Management
Thank You
Shared Services in Health Care A New Era of
Collaboration