Science at the heart of medicine Integrating a

Science at the heart of medicine Integrating a Medical School into a Hospital System Differences in procurement and contracting strategies Jack D. Zencheck, M. S. , C. P. M. , APP Associate Vice President Business Services 10/16/17

History of Albert Einstein College of Medicine 1969 Montefiore assumes operation of Weiler Hospital Science at the heart of medicine 3/17/2018 | 1

History of Albert Einstein College of Medicine Science at the heart of medicine 3/17/2018 | 2

What is happening in the Health Care Industry? • Hospitals need to bring in patient beds to compete for reimbursements and are consolidating > Northwell Health • • Lenox hill Long Island Jewish Northshore Southside Staten Island Glen Cove Northern Westchester Science at the heart of medicine Hofstra University Medical School 3/17/2018 | 3

What is happening in the Health Care Industry? • New York Presbyterian – – New York Hospital Hudson Valley Lawrence Morgan Stanley Children’s Hospital Science at the heart of medicine Weil Cornell Medical School/ Columbia University Medical Center 3/17/2018 | 4

What is happening in the Health Care Industry? • Mt. Sinai – Beth Israel – St. Lukes – NY Eye & Ear Science at the heart of medicine Ican School of Medicine 3/17/2018 | 5

What is happening in the Health Care Industry? • Montefiore > Moses > Einstein Hospital > Wakefield > Children’s Hospital & Montefiore > Burke Albert Einstein College of Medicine > Mt. Vernon > White Plains > New Rochelle > Nyack > St. Lukes Science at the heart of medicine 3/17/2018 | 6

Why do hospitals systems & Medical Schools need each other? Medical Schools Hospital Systems Federally funded research is a losing business Need to recruit and retain top physician scientists Medical schools need new sources of income: • Private practice plans • Hospital revenue • Financial backing • Philanthropy • Tuition Prioritize translational Medicine (from laboratory to the bed side) Science at the heart of medicine Need world class academic facilities Affiliations improve rankings 3/17/2018 | 7

How does the payee base affect procurement strategies? Hospital Systems (Montefiore) Medical School (Einstein) Income from Medicare and Medicaid reimbursements RO 1 Grants (NIH) Subawards via collaborative research Not much of a private payer base NYS and NYC Grants Private/Corporate contracts Science at the heart of medicine 3/17/2018 | 8

How does the Payee base effect Procurement Strategies? Hospital Systems (Montefiore) Medical School (Einstein) Revenue comes from a Reimbursement System Revenue comes from a Draw-down System The Procurement strategy is to slow This Procurement strategy is to acquisitions and delay payments (net process acquisitions quickly and pay 120) quickly (net 30 -60) Need to manage cash flow because no income stream Science at the heart of medicine 3/17/2018 | 9

Reporting Structure under Yeshiva University CFO Associate VP Business Services Director of Purchasing Director Accts Payable Science at the heart of medicine Director EBusiness Director Risk Management Travel Manager Director Energy & Sustainability 3/17/2018 | 10

Reporting Structure under Montefiore Medicine Academic Health Systems Albert Einstein College of Med, Inc. Montefiore Health Systems, Inc. MMAHS Associate Dean Finance & Admin Vice President Finance Business Services (includes Educ and research Education and Research Clinical Services Associate VP Business Services Manager Bus Services Science at the heart of medicine Manager Science A/P E-Business Energy and Sustainability 3/17/2018 | 11

Contrasting Contracting and Sourcing under Yeshiva University and Montefiore University Systems (Yeshiva/Einstein) Hospital Systems (Montefiore) Banner ERP SAP Jaggaer/Sci. Quest No Procure to Pay (P 2 P) System Regional Sourcing Corporate Sourcing E&I Acuity (GNYHA) NYS Contracts Premier Joint Purchasing None Consolidation None Science at the heart of medicine 3/17/2018 | 12

Contrasting Pricing under Education and Hospital Educational (Einstein) Hospital (Montefiore) EDU Pricing • Microsoft • Oracle • Citrix • Adobe Hospital Consortium • Acuity • Premier • GHX • Cardinal E&I Pricing • Grainger • Staples • etc State and Local Pricing Science at the heart of medicine 3/17/2018 | 13

Contrasting Pricing under Education and Hospital Part Number 23029252 23062125 B 11248 07212103 23535435 23245685 22349689 021102 Product Description Unit of Measure Standard Qty Sales Std Uom EA 5 MERIDIAN BIOSCIENCE 280050 $ 1, 451. 07 $ 1, 225. 00 -16% EA 479 THERMO SCI BIOCHEM SCIENCES 062 -125 $ 20. 03 $ 10. 01 -50% EA 132 BD DIAGNOSTIC SYSTEMS 211248 $ 79. 66 $ 52. 83 -34% EA 10 07212103 $ 425. 14 $ 252. 19 -41% EA 84 535 -435 $ 30. 20 $ 14. 11 -53% EA 26 THERMO SCI ANATOM PATH 245 -685 $ 72. 30 $ 20. 45 -72% EA 9 BD DIAGNOSTIC SYSTEMS 275005 $ 153. 30 $ 121. 28 -21% EA 50 OHAUS CORPORATION 8008 -MN $ 22. 93 $ 19. 08 -17% 1700 -0170 $ 124. 39 $ 96. 53 -22% ILLUMIGENE CDIFF TEST KT 50/EA BLOOD BNK SALINE. 9%NACL 10 LT FTA HEMAGLUTN BUFR PH 7. 2 500 G MICROSCOPE SLIDE CABINET TAN BLOOD BNK SALINE. 9%NACL 20 LT PROTOCOL 10% BUFF FORMALN 5 GAL RPR CARD KIT MRCFR 500 TEST SPRING SCALE 5000 X 100 GM Vendor Description THERMO FISHER SCI (CHINA) CO LTD THERMO SCI BIOCHEM SCIENCES Vendor Cat Nbr HOSPITAL PRIICING MEDICAL/ RESEARCH PRICING % NC 923084 3 CAL STANDARD 5 ML EA 4 PICKERING LABORATORIES INC B 240961 STREPTOCARD GRP B LATEX EA 7 BD DIAGNOSTIC SYSTEMS 240961 $ 53. 23 $ 39. 02 -27% 50751744 3 NC 991849 6 NC 026407 6 HCTF 20 X 2 -COMPONENT 1000 ML EA 5 QUALITY BIOLOGICAL INC H 102 -1000 ML $ 62. 19 $ 46. 11 -26% WRIGHT GIEMSA PACK EA 6 ANDWIN SCIENTIFIC 3005 $ 101. 83 $ 88. 43 -13% 5 3/4 PASTEUR PIPETTE 1000/CS EA 2 BELLCO GLASS INC 1277 -10005 $ 93. 49 $ 73. 78 -21% Science at the heart of medicine 3/17/2018 | 14

Contrasting Pricing under Education and Hospital As the Hospital affiliate for Einstein, Citrix did not grant educational pricing to Montefiore After the Joint Collaboraton Agreement, all UNIVERSITY licenses were applied to Montefiore. $250, 000 savings Science at the heart of medicine 3/17/2018 | 15

Breaking Down the Silos • • Lab Supply Agreement Oracle Cisco Microsoft Imperial Bag Air Gas Elevator Maintainance Telecom • Lab Supply Agreement Science at the heart of medicine 3/17/2018 | 16

Summary • Integrating a Medical School into a Hospital System provides • Cost savings and efficiencies • Balancing a Corporate Structure with an Educational Structure is not without its challenges • Ideally both sides benefit from the collaboration • Lab Supply Agreement Science at the heart of medicine 3/17/2018 | 17

Questions? • Lab Supply Agreement Science at the heart of medicine 3/17/2018 | 18