Peter Robson, CEO of Miga Solutions, and Matt Werder, CTO of Hennepin County Medical Center, described practical ways to identify and realize cost savings in the often overlooked and under leveraged spending on medical equipment and technology.

1. WELCOME
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TOPIC: Bending Your Hospital’s Cost Curve

2. BENDING YOUR HOSPITAL’S
COST CURVE
New Approaches to Managing Your Medical Equipment Expenses
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 2

3. Today’s Presenters
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 3
Matt Werder
CTO, Hennepin County Medical Center
Peter Robson
CEO, Miga Solutions

4. What We’ll Cover
1. Why medical equipment?
2. What do we mean by “new approaches”?
3. Three strategies to help bend your cost curve
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 4

5. Why Medical Equipment?
•Relevant: big, 99%+ of care
•Strategic: mission critical, and not a toaster
•Significant: last untapped savings frontier
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6. Medical Equipment: Big $, Strategically Relevant
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$95 B
Spending
$ 25 B
Purchase
$ 67 B
Service
$ 3 B
Dispose
$12 B
Savings
5,564 US Hospitals
897,961 Hospital beds
$13,000
savings
per bed
$3.9 MM
savings
for 300 bed
hospital
12% - 16%
Across Lifecycle
Sources: US Census Bureau 2015 data
reported 2017; AHA 2015 survey, reported
2017.
75%
…of lifecycle costs
occur after purchase

7. Evolving Medical Equipment Technology/Complexity
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 7

8. Even Experts Find Accurate Forecasting Challenging
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9. Considerations for Curve Bending Success
1. Move from transactional to comprehensive lifecycle view
2. Current process risks “good enough” justification for spending
3. Emotional decision making and fear of losing out
4. Different internal “languages,” hard to build consensus
It really all starts with having the right information….

10. New Approach Required for Uncertain Future
Old Paradigm New Paradigm
Contracting Committed $ volume & penalties Potential $ volume &
incentives
Value Metric Net price Total cost of ownership
Coverage Service coverage & uptime Maximum reliability and
utilization
Selection Clinicians choose, committee
approves
Data driven, committee
builds consensus
Old Equipment Trade in Reuse, recover value
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 10

11. The Solution – New Approach Categorically Defined
Benchmarking 2.0 [noun]
A comprehensive lifecycle approach to medical
equipment spending that helps hospitals bend their
cost curve.
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12. CASE EXAMPLE:
Align Service and
Clinical Strategies
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$750K / 6%
SAVINGS
purchase
Example – How 2.0 Approach is Bending Costs
Patient revenue equivalent of $25MM (based on 3% margin)

13. CASE EXAMPLE:
Managing Risk,
Optimizing Costs
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$430K / 80%
BETTER
PRICING
service
Example – How 2.0 Approach is Bending Costs
Patient revenue equivalent of $21.5 MM (based on 2% margin)

14. Example – How 2.0 Approach is Bending Costs
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$491K / 100%
MORE $ VALUE
RECOVERED vs
TRADE-IN
CASE EXAMPLE:
Optimizing Existing
Asset Value
disposition
Patient revenue equivalent of $12.275 MM (based on 4% margin)

15. 3 STRATEGIES FOR SUCCESS
1: Avoid “Good Enough” Trap 2: Enable Fact-Based Decisions 3: Learn the Same Language
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 15

16. 1. AVOID “GOOD ENOUGH” TRAP
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17. Avoid “Good Enough” Trap
• Insist on best outcomes that have been validated
• Challenge existing definitions of success – empower challenging
status quo
• Don’t let “easiest” path forward cost more than it should; remember
and support overcoming fear of change
• “But it fits within our budget” is not best measure of success
• Savings is one key metric; better spending and contracting can
provide substantial additional benefits
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 17

18. CASE EXAMPLE:
Expecting Better
Than “Good
Enough”
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 18
$180K / 100%
SAVINGS VIA INCREASED
TRADE-INpurchase
Patient revenue equivalent of $18MM (based on 1% margin)

19. 2. ENABLE FACT-BASED DECISIONS
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 19

20. Enable Fact-Based Decisions
• Not everyone thinks like finance w/fact-based logic!
• Our assumption: people want to do a good job
• Encourage use of market “facts” vs. personal “facts”
• Facts – data – can overcome fear of change and
tendency to embrace status quo
20

21. CASE EXAMPLE:
Optimizing
Technology Cost
and Non-
Obsolescence
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 21
$221K / 26%
BETTER
PRICING
purchase
Patient revenue equivalent of $22.1 MM (based on 1% margin)

22. 3- SPEAK A COMMON LANGUAGE
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23. Speak a Common Language
• Achieving buy-in across constituents requires
understanding the different “languages” being
spoken
• Driving enterprise consensus not easy (a unicorn!)
• You may find yourself playing translator
• Not only internally, but with vendors as well
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 23

24. ©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 24
Tuko juu ya bajeti

25. CASE EXAMPLE:
Leveraging
Consensus to
Optimize New
Facility Budget
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 25
purchase
Patient revenue equivalent of $500MM (based on 1% margin)
$5M / 12.5%
SAVINGS

26. Summary – Three Strategies to Bend the Curve…
Take advantage of these strategies:
1. Avoid “Good Enough” Trap
2. Enable Fact-Based Decisions
3. Speak a Common Language
And successfully realize similar benefits for your hospital
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 26

27. Summary - Bending Your Hospital’s Cost Curve
• Give attention to $12 billion
medical equipment opportunity
• Leverage new approaches to
drive 12 to 16% savings on
medical capital spend
• Utilize the three “how to”
strategies to capture what can
be $3.6MM/year for 300-bed
hospital
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 27

28. Q&A
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 28

29. THANK YOU
Matt Werder | CIO | O: (612) 287-6373 | matthew.werder@hcmed.org
Peter Robson | CEO | O: (763) 225-8407 | C: (612) 859-2332 | probson@migasolutions.com
©2017 Miga Solutions, Inc. All Rights Reserved. May not be copied or circulated without prior permission. 29

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