RRHA/JVC– Seagate AllianceAugust 6th, 2015

Michael Carni – Senior Account Manager

Ross McCune – Director National Accounts

Brian Slusaw – Region Manager

Jeannette Podlogar – Clinical Support Manager

Agenda

2

• McKesson Overview

• McKesson Distribution

• Value Added Services/Technology

• Clinical Support and Offerings

• Summary Review / Partnership Scorecard

• Q&A

(c)2015 McKesson Medical-Surgical - Confidential & Proprietary

1 As of December 2, 2014; 2 Approximates reported revenues of McKesson and Celesio AG for the twelve months ended September 30, 2014, stated USD”

McKesson At-a-GlanceDriving Better Health for Over 180 Years

(c)2015 McKesson Medical-Surgical - Confidential & Proprietary3

Founded in

1833

85,000Employees1

Worldwide

2CoreSegment

s

DistributionSolutions

TechnologySolutions

>$170BCombined Revenues

20Countries1

Operates in Over

>12KOwned or Banner

Pharmacies1

Serves Pharmacies and Hospitals Globally Daily1

120K2

The McKesson Medical-Surgical FootprintDistributing over 180,000 products to over 200,000 customers in the alternate site market

Primary Care Long Term Care Home Care Lab PCS - Medimart

• 200,000 Customers

• 1,452 Sales Professionals

• #1 in Surgery Centers

• #1 in Retail Clinics• Proprietary

Customer & SalesAutomation Tools

• Targeted Marketingby Specialty

• 7,700+ Customers• 160+ Sales

Professionals• #1 in LTC Market• Proprietary

Customer Automation Tools

• 4,600+ Home Health Agencies & Home Medical Equipment providers

• #1 in HC Market• 80+ Sales

Professionals• Proprietary

Customer Automation Tools

• 100,000+ Customers.

• Hundred of specialty reps.

• Educated teams for customized programs.

• 1900+ Payer Contracts.

• Competitive Bid winner

• Award winning call center

• #1 WC billing business.

• HC & LTC benefits.

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Long-Term Relationships with Global Leaders in Healthcare

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Vanderbilt University Medical CenterVanderbilt University Medical CenterVanderbilt University Medical CenterVanderbilt University Medical Center

Retail Pharmacy

Health Systems

Primary and Alternate Care Payors Manufacturers

National Brands

McKesson Medical-Surgical offers:

• The industry’s widest selection of more than 45,000 products & equipment

• Products you need to expand your offerings & better serve your patients

• The opportunity to satisfy existing patients & acquire new patients

Name brands you know and trust

Featuring products for Inco, Wound Care, Skin Care, Ostomy, & Flu Supplies

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McKesson Brands

Program Overview:• “Never Compromise on Care” –Quality

products at competitive prices, backed by our 100% money-back guarantee

• 2,300+ items in 30+ major medical-surgical product categories

• Dual sourcing strategy through global sourcing and major National Brands

• Decades of experience in the market with resources to offer support to your facility

• Robust QA program with to help ensure quality products

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Key Product Categories:

• Diabetic monitoring supplies• Gloves• Incontinence• Infection Prevention• OTC’s• Personal Care• Skin & Wound Care

Distribution Expertise /Regional Local Presence

• Significant presence in NY currently – 80+ LTC customers alone

• Next Day Delivery for all of RRHA

• Tenured representation, Local, National Account / GPO Support / Field Representation for Technology, Billing, Clinical

• Over 45,000 products in-stock

• Up to five-day-per-week delivery (6 when SNDA included)

• No charge on low unit of measure orders

• Freight schedule will be defined for each facility and what works for them.

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• Flexible cut-off times

• McKesson-owned trucks & common carrier (e.g. UPS) delivery

• Distribution centers with radio frequency web-based technology for improved order accuracy

• Automated Alternate Ship and Backorder logic

• Formalized Disaster Relief and Preparedness Plans

Centralized Customer On-Boarding Project Manager

• Dedicated resource for customer on-boarding only• Centralized point of contact• Manage process for on-boarding new national accounts

Implementation Guideline• Develop detailed checklist with target completion dates• Outline what needs to be done when• Timely follow-up

Communication• Coordinate internal and external communication• Support during and after implementation process • Triage team support

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Successful First Order Experience for Customer

Medical Supplies Traditional vs. Future

• Selecting a Distribution Partner – How do we save Money on

Medical Supplies?

• McKesson Distribution – Key Differentiators…

– Billing Services – Divert Cost to appropriate resources = savings.

– Clinical Services – Save via product choice, utilization and eliminated

extra expense.

– Service – Save on operating expense & opportunity cost of that

expense.

– Distribution Focus / Value Added Services – we focus on distribution

cost management vs. product sales.

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Value Added Solutions / Technology

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• Supply Manager• Scan Manager• Orbits• Customer Business Reviews• Quality ONE• VIP Rewards

• 3rd Party Partnerships / Discounts• Relias Learning• Pathways

Supply Manager https://mms.mckesson.com

Robust Website for:• Ordering/Product information

• Formulary Management

• Inventory Valuation

• Budget Management

• Real time Stocking information

• Reporting

• Product Tracking

• Invoicing Management

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Supply Manager

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Ordering / Product Information/ MSDS/

Usage / Reporting

Formulary Management /

Encourage preferred products /

lockout if desired

Spend Manager / Budget Manager /

Automated Alerts

Real-time inventory information, switch and save

suggestions, replacements to MFG backorders,

export functions

McKesson ScanManagerSM

Replenish Your Inventory:• Portable hand-held device• Integrated laser, barcode-based system that works in conjunction with

DSSI programs.• Eliminate the chore of manually ordering and

managing supplies, saving time and reordering errors• Use for inventory valuation as well

Simple 3-Step Process:1. SCAN – Create your order by pointing the laser

barcode scanner at the bar-coded shelf labels or inventory sheets2. SEND – Place the scanner in the cradle and automatically send your

order through McKesson’s online ordering system, McKesson SupplyManagerSM

3. STOCK – Receive the right products in the right quantity ready for re-stocking

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ORBITS®

Manage Costs and Control Inventory:

• Track products to a patient

• Capture charges not only for supplies but

for a variety of different service

categories

Inventory/Formulary Control:

• Control the products, formularies and

charges to patients

• No piggy-back bar code labels

Easy to Install and Use (Web-based):

• Facility data is

automatically entered

• Updates to product databases and

enhancements to the system are

immediate and free of charge

Training:

• Technicians train you over the phone or

onsite

• Easy and quick

Track Supplies from Storage to Reimbursement:

ORBITS®

ORBITS® dashboards provide quick visual tools to help you manage operations!

Charge Compliance Dashboard:• Breaks out product spend into billable and

non-billable supplies• Drill down to get patient-per-day charges

(PPD)• Review staff entries to find areas in which

training is needed to help increase revenue

Spend-to-Charge Ratio Dashboard:• Shows McKesson spend-by-month• Track charge transactions per month, per

facility• Shows dollars charged against dollars

purchased by item

• Easy Data

Collection via

handheld

scanner or wall

mounted kiosk

Medical Supply Revenue Opportunity with ORBITS

Private Pay Ancillaries Totals Notes

Medical Supply Spend $1,000,000 Conservative Estimate

Private Pay Census Guesstimate 20% proportional figure

Chargeable Supplies 80.00% minus gloves, gauze, misc.

Chargeable Supples to PVT $160,000

Industry Mark-Up 100.00% Can vary - 100% very common

Revenue Target on Medical Only $320,000 (30% + Savings)* Not a guarantee number and could be higher

or lower depending upon various factors including mark-up, compliance, spend etc.

The McKesson Business ReviewBusiness Reviews provided quarterly at a group/alliance and/or individual home level:1. Review Spending and look for ways to

save2. Compare PPD’s by category to other

homes in the group or all of the Alliance3. Product move recommendations that

would save money by going to better priced options

4. Look for homes that could benefit from clinical support by viewing PPD’s that are lower of higher than the norm

5. Manage Product usage

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1. Earn Points with purchases from our VIP manufacturers

2. Redeem for Services from our VIP partners, or take as

a rebate (approximately 2% on average)

Key Differentiators (McKesson PCS/MediMart)

McKesson owned → compliance / service Billing for – Enteral, Wound, Ostomy, Urological, Trach

No substitutions – complete product offering.

Managed Care and Part B - Commercial and Managed Care solution for your Non-Medicare residents. 2400 Managed Care Insurance contracts.

Educated & Compliant - Skilled in complex wound billing procedures, ensuring regulatory compliance.

Patient Specific shipping - labeled for simple in-house distribution.

14 Day Shipping vs. 30 Day Shipping – less waste = more savings.

Regulatory Compliance – Peace of mind

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McKesson Billing Solutions

Clinical Support Personalized service provided by clinicians with varied

backgrounds to meet your needs.

Areas of expertise include:

• Wound Care• Skin Care• Ostomy Management• Incontinence Management• Nutrition and Enteral Feeding• Tracheostomy Care• Diabetic Testing• Training and Education• Product Evaluation• Clinical Policies and Procedures• Formulary Development• Medicare Part B Reimbursement• Facility Processes and Operations

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• Quality ONE

• Wound Care

• Condition Based Savings/Benchmarks

• WCEI- Wound education and Certification

• Pathway Health Regulatory Training

– Interim Mgmt, Survey Help etc.

– Education and Training – DON, MDS Coordinators and IDC-10

• Online Education Portal

• Relias

• Tailored Education Programs

• Supply iQ

• PointRight MDS Analysis

• UPrevent Infection Control Education/Management

• OnShift

McKesson Clinical ConnectionSM Providing Clinical Support and Education

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© 2015 McKesson Medical-Surgical Inc. 2015-0238 23

Introducing the NEW

McKesson Quality One is an innovative web-based tool that

not only incorporates QAPI best practices and QIS survey

questions; it makes the quality assurance process an

integral part of your facility.

McKesson Quality OneTM

By supporting the data you collect with guided Root Cause Analysis and Performance Improvement Plans (PIPs), McKesson Quality One gives you insight to take action in the areas of your facility that fall short of CMS thresholds or are of concern to residents and their families – helping improve quality of life.

24 © 2015 McKesson Medical-Surgical Inc. 2015-0238

McKesson Quality One is built to deliver best-in-class

CCollect pertinent

patient information

AAssess outcomes

against benchmarks

RRespond to issues

EEnsure quality processes are

maintained across your facility

The journey to quality begins with CARE

What’s Better?

More than just a survey readiness tool –

it’s a quality assurance tool

Real-time assessments allow you to take

action and make adjustments before locking and

sending reports

Offers more guidance for Root Cause Analysis and

a robust set of tools created by clinicians

Offers many options for reports and reporting

parameters so you can customize and choose

resident samples and follow your own MDS schedule

Powered by PointRight® for facility and national

rehospitalization levels, both actual and adjusted

rates

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McKesson Quality One at a Glance

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Complimentary 2-part online training course

VIP Rewards can be applied to the monthly fee

No cancellation penalties – just cancel 30 days in advance

Additional training options available from Pathway Health: Web-based Training and 1-day, 2-day and 3-day On-sites

$100/month per facility, no matter the size (no set-up fee, not tied to wholesale spend)

Education available through our complimentary portal

30 day readmission rates powered by PointRight®

(c) 2014 McKesson Medical-Surgical

McKesson Clinical ConnectionComplementary Online Education

Simple login and self-registration

Variety of course options to fit your needs

mckesson.training.reliaslearning.com27

CNA course requirements from CMS and OSHA

CE credit courses for licensed professionals

Archive of past McKesson Clinical Webinars

Easy to use interface Certificates verifying course completion

Comprehensive system enabling your organization to:Customer education siteDevelop and add coursesAssign course work to individual usersTrack enrollments and completions

Discounts available exclusively for McKesson customers

Relias LearningProviding individual CE education and organization training

Features Include:• Senior Care focused organization with over 400 dedicated course• ANCC Accredited plus dozens of state accreditations• Courses in both English and Spanish• An easy-to-use interface for learning—even for staff with little or no computer experience

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Wound Care Companion• Comprehensive AWC solution• Partnership with McKesson Brand,

S&N, Convatec and WCEI• Care Giver Tools• Product Resource Guide• Complete Sample Kit• Wound Care protocol and program

in a complete kit• Clinical Support

Quick Rounds

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Partnership Scorecard

INITIATIVE PROGRAM BENEFITS(S)FINANCIAL

IMPACTOther

Patient Care Solutions - MediMart

3rd Party billing for MC and Med B qualified patients on wound, ostomy,

urological, trach, enteralSavings $300,000+

Cost shift Savings

ORBITS Technology

Revenue generation on medical/non-medical services, supplies, etc.

Revenue$500,000 - $1.0

MillionInventory

Management

Scan Manager Simplified Ordering Labor Savings LaborError

Reduction

Business Reviews

Usage Analysis, PPD Compare, reduced cost recommendations

SavingsCompetitive Relevance

Product Management

Clinical ServicesCustomized Clinical Programs /

Quality ONE, Quick Rounds, Wound Care Companion,

Savings$50,000 -

$150,000+++Risk

Management

Pathways Clinical Rewards Program

Assessments, interim management discounts, mock surveys etc.

Savings TBDRisk

Management

VIP Rewards Cash or Points back on VIP Purchases

Savings / Parntnership

$200,000 / Discounts

Rebate or Savings on

Services

31 (c)2015 McKesson Medical-Surgical - Confidential & Proprietary

Questions / DiscussionThank you for your time and the opportunity!

32 (c)2015 McKesson Medical-Surgical - Confidential & Proprietary