BUDGET FORECAST INDEX · Projections in this index submitted by manufacturers are a general...

BUDGET FORECAST INDEX

January 2008 to June 2009

A Budgeting Tool for MedAssets Customers

BUDGET FORECAST INDEX

A Budgeting Tool for MedAssets Supply Chain System CustomersJanuary 2008 - June 2009

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Table of Contents Page

ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

FACILITY MAINTENANCE OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

FOOD SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

HOUSEKEEPING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

LABORATORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

MEDICAL / SURGICAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

MEDICAL SURGICAL / IMPLANTABLE DEVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

PHARMACY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

RADIOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

RESPIRATORY THERAPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ABOUT MEDASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

INTRODUCTION

This Budget Forecast Index is a tool MedAssets Supply Chain Systems provides to help our customers forecast future price changes.MedAssets provides this resource to our customers every year because access to good information is so critical in today’s volatile healthcare environment. We collect and consolidate the forecasted price changes and explanations from our contract vendors to help youplan and budget for the upcoming year.

Projected change percentages represent the best possible estimate from all input sources. The actual inflationary increases will be subjectto social, economic, and political pressures which are impossible to accurately predict. The inflationary indices described herein have beenprovided to MedAssets by a broad spectrum of industry sources.

Projections in this index submitted by manufacturers are a general guideline to their overall inflationary expectations in the marketplace.These projections do not apply to MedAssets contracts which are generally price protected and typically structured to offer savings opportunities based on customer commitment level.

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Facts about the CPI from the Bureau of Labor Statistics

The Consumer Price Index (CPI) is a measure of the average change over time inthe prices paid by urban consumers for a market basket of consumer goods andservices. It is the most widely used measure of inflation.

Medical care is one of the major item groups within the CPI. This major group

consists of medical care commodities and medical care services. Medical care services, the dominant component of medical care, is organized into two expenditure categories: professional medical services and hospital and related services. Medical care commodities, comprised of prescription drugs and nonprescription medical equipment and supplies, is the other major componentof medical care.

Definitions of published medical care indexes

Medical care Medical care services and medical care commoditiesMedical care services Professional medical services, hospital services, nursing home services, and health insurance imputationProfessional services Physicians, dentists, eye care providers, and other medical professionalsHospital and related services Includes services provided to inpatients, outpatients, emergency room visits, nursing home care and adult day care; Includes

transaction and chargemaster pricesMedical care commodities Prescription drugs, nonprescription over-the-counter-drugs, and other medical equipment and supplies

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%CPI

all itemsMedical care Medical care

commoditiesPrescriptiondrugs and

medical supplies

Nonprescriptiondrugs and

medical supplies

Medical careservices

Professionalservices

Hospitaland related

services

2.54%

4.18%

1.35%

5.04%

1.43%

2.90%

6.28%

1.83%

CONSUMER PRICE INDEX: 12-MONTH CHANGES (%) FROM NOVEMBER 2006 TO OCTOBER 2007

Source: The Bureau of Labor Statistics of the U.S. Department of Labor, December 2007

Department Projected Factors Contributing to ResourcesCategory Change Price Adjustment

ADMINISTRATIONDoc. Mgmt, Copiers, Print, Fax Unknown Development and implementation of new

technology may cause prices to fluctuate Ricoh Americas CorporationDocument Management Products +3-5% Cost of materials, labor, travel, R&D Xerox CorporationDocument Shredding 0% N/A Cintas CorporationForms Management +5-7% Paper price increases, as paper costs are 65%

of our product cost Standard Register CompanyForms Mgmt. / Stock Paper +4% Change in the cost of paper (raw materials)and the Moore Wallace

Consumer Price Index North AmericaHealth Science Books and Media +3% Paper, printing and binding (PPB) costs and

exchange rates Elsevier Health SciencesLabels and Tapes +5-10% Price adjustments are dependent on the escalating

costs of paper, adhesives and inks, cores and shipping cartons and fuel Shamrock Scientific Spec. Sys.

Office Supplies, Paper, ICGS +3-6% When the cost of an items changes, the corresponding list price will change on a quarterly basis Corporate Express, a Buhr. Co.

Reception Area Magazines +5% Postage and publisher increases Intercontinental SubscriptionRemanufactured Toner Cartridge 0% Changes in cost for empty toners and parts INKomparableStock Forms / Catalog Supplies +3-4% Various economic factors: wages and benefits, raw

material cost changes, OEM cost increases, etc. Briggs CorporationTapes / Labels +4% Material, labor and overhead TimeMed Labeling Systems, Inc.

EQUIPMENTBed and Accessories +6% Cost of Raw Materials; the primary component

is steel Hill-Rom Company, Inc.Beds, Furniture,Transports +5% avg Manufacturing costs NK Medical Products, Inc.Equipment Rental +2-4% Age, model and condition MEDIQ PRN

Life Sup. Svcs. Inc.

Page 4*PPI = Producer Price Index; CPI = Consumer Price Index; OEM = Original Equipment Manufacturer; TBD = To be determined † Any price adjustments would be due to these factors

Material Handling Systems +4.5% Raw material cost increases, transportation and labor costs InterMetro Industries Corp.

Patient Charting System +3.5% to list Cost of materials and production and overall market conditions

Pediatric Cribs & Youth Beds Unknown Cost and value of the new feature that becomes a standard part of the crib / bed package HARD Manufacturing Co., Inc.

Pulmonary / Sleep Labs +3-5% Direct, indirect and overhead costs (insurance,workman comp, material cost, and labor ) Viasys Respiratory Care Inc.

Rehabilitation Equipment +3.6% COGS Sammons Preston Rolyan

FACILITY MAINTENANCE OPERATIONSBatteries +6.5-7% Material increases. Energizer has taken price

increases on already incurred cost and does not Eveready Batteryprice based on material cost speculations Co. / Energizer

Carpeting +3-5% Cost of petroleum and petroleum based raw materials such as nylon, polypropylene, PVC,dyestuffs, chemicals, labor, transportation and healthcare costs Tandus US, Inc.

Door Hardware, Access Control +3-8% Material, labor, shipping, and equipment cost Clark Security Products, IncExam / Procedure Room Furniture +3-5% Material and transportation costs, competition

and general market trends Midmark CorporationFloor Covering / Ceiling Systems +3-5% No change at this time, but based on the last

few years there may be increases of 3-5% a couple of times per year Armstrong World Industries

Flooring +6% Raw material cost increases (petro chemicals) Shaw Industries, Inc.Furniture Unknown Industrial commodities pricing, labor pricing,

healthcare benefit expenses, etc. Steelcase, Inc.Furniture / Mat. Handling Systems Unknown Cost of raw materials, healthcare, labor, and

other factors Herman Miller For HealthcareFurniture / Office Furniture +1-3% Increases are not be across the board but for

certain products that have sustained increase in material, labor or transportation costs National Office Furniture

*PPI = Producer Price Index; CPI = Consumer Price Index; OEM = Original Equipment Manufacturer; TBD = To be determined † Any price adjustments would be due to these factors Page 5


HC Furniture, Seat, & Casegood +5% All direct and indirect costs contributing to our products and services, including labor, materials and transportation Nemschoff

HVAC Equipment / Service +3-6% Commodity costs, and market conditions Carrier CorporationInstrument / Scope Repair +<5% Fuel charges, cost of parts from Germany, MOBILE Instrument

Dollar - Euro Dollar relationship Svc & RepairMaintenance Supplies / Lighting +3-9%; Average +6% Numerous letters from our suppliers notifying Graybar Electric

us of price increases Company, Inc.Maintenance, Housekeeping +3-3.5% Manufacturer price modifications determine

our price adjustments Grainger Industrial SupplyNurse Call Equipment Crest - 0%; Other +<10% Based on supplier cost increases for components Crest Healthcare SupplyOffice Furniture Unknown Internal cost analysis related to raw materials,

transportation, and labor rates Haworth Inc.Office Furniture +3-6% Systems Furniture;

+0-6% Casegoods & Tables; +3% Metal Filing; +3-9% Seating Primarily energy and raw materials Kimball Office, div of Kimball

Paint / Wallcoverings / Sundries +3% PPI, Raw Materials Supplier Price Index,transportation and packaging costs ICI Paints

Patient Room Furniture +~3% Many factors are reviewed, including raw materials, CPI, inflation, and labor rates Stryker Medical

Plumbing Supplies +3-5% Vendor prices (raw materials markets for their respective products) Sexauer, J. A., Inc.

Specialty Light Bulbs +3% If our manufacturers increase our costs we have to adjust the costs to our customers accordingly BBC Lighting & Supply

Televisions from -10% Manufacturer price increases TB&A Hospital Television, IncWater Treatment +3-5% Increase in our cost components: raw materials,

energy, freight, packaging, insurance, and environmental compliance Nalco Company


FOODSERVICEBeverages:

Coffee +3-5% Crop yields, weather, CPI and freight Growers, distributors, USDAJuice +3-10% Raw materials, labor, packaging costs, crop yields Manufacturers,

and freight distributors, USDADisposables:

Towels and tissue +5-6% Raw materials, labor and freight Manufacturers, distributorsPaper cups +5-6% Raw materials, labor and freight Manufacturers, distributorsFoil and film +5-10% Raw materials, labor and freight Manufacturers, distributorsFoam cups +5-10% Raw materials, labor and freight Manufacturers, distributorsCan liners +10% Raw materials, labor, packaging and freight Manufacturers, distributors

Dry Grocery +2.5-6% Crop yields, labor, packaging, CPI and fuel Packers, distributors, USDACanned Fruits and Vegetables +3-6% Crop yields, labor, packaging, CPI and fuel Canners, distributors, USDACereals, Grains & Bakery Products +5-8% Commodity markets cost of raw materials,

CPI, and fuel Manufacturers, USDAEdible Oil +4-5% Cost of raw materials, commodity markets and fuel Manufacturers, USDAFrozen Fruits and Vegetables +5-10% Crop yields, labor, and packaging costs Packers, distributors, USDAFresh Fruits and Vegetables +3-4% Growing conditions, crop yields, labor and freight Growers, packers, USDALiquid Nutritionals +1-3% Cost of raw materials, CPI and freight ManufacturersProtein:

Eggs +0-1% Commodity markets, feed and fuel Manufacturers, USDABeef +2-11% Commodity markets, feed and fuel Packers, distributors, USDADairy +2-4% Commodity markets, feed and fuel Producers, distributors, USDAPork +2-5% Commodity markets, feed and fuel Packers, distributors, USDAPoultry +1.5-3% Grain, exports, packaging and labor costs Packers, distributors, USDA

Seafood +3-4.5% Raw materials, global sourcing and fuel Packers, distributors, USDASupplies and Equipment +3-7% Raw materials, labor and freight Manufacturers, distributorsTableware Products +5-18% Materials, exchange rate and fuel Manufacturers, distributorsTray Delivery; Traymats, Placemats +5-6% Raw materials and freight Manufacturers, distributors



HOUSEKEEPINGCan Liners +10% Raw materials, labor and fuel Manufacturers, distributorsCleaners and Warewashing +4-6% Chemical raw materials and packaging Manufacturers, distributorsLaundry Chemicals +4% Chemical raw materials and packaging Manufacturers, distributorsPaper Distribution 0% Distribution companiesPest Elimination +1-2% Raw materials and labor Manufacturers, distributorsPlastic Bags +2-4% Raw materials, labor and fuel Manufacturers, distributorsSoap, Lotions, Disinfectants +4-5% Chemicals Chemical companies

LABORATORYBlood & Specialty Filters +5% Manufacturing and shipping costs; FMC’s Pall MedicalBlood Collection Products +4-6% Significant changes in raw materials, manufacturing,

labor and logistics costs BDBlood Collection Products +3% Manufacturing costs including labor, raw materials

and competitive prices Greiner bio-oneBlood Collection Products 0% Cost of goods and market pricing MediPurposeBlood Collection Products standard items +2%;

up to +20% for items effected by raw material Labor, raw materials (such as pulp, polypropylene,increases polymers, adhesives) and transportation (petroleum) Tyco Healthcare Group LP

Blood Culture Systems +2-4% Significant changes in raw materials, manufacturing,labor and logistics costs BD

Blood Gas Systems +3-4% Manufacturing costs and the competitive market Instrumentation LaboratoryBlood Glucose System +3% General “cost of business” factors like personnel

raises, transportation costs, M&D, etc. Roche DiagnosticsChem-IA Integration / Automation +3.5% Medical consumer index Beckman Coulter, Inc.Chemistry +3-5% Raw material, crude oil, labor and manufacturing Siemens Medical

costs Solutions DiagCoagulation Systems +3.5% Medical Consumer Index Beckman Coulter, Inc.


Electrophoresis Analyzers +3.5% Medical Consumer Index Beckman Coulter, Inc.Hematology Systems +3.5% Medical Consumer Index Beckman Coulter, Inc.Hematology Systems 0% Market segment changes, internal profitability,

market share, etc. Sysmex America Inc.Immunoassay / Infectious Disease +3-5% Raw material, crude oil, labor and manufacturing Siemens Medical

costs Solutions DiagIn Vitro Diagnostic Kits 0% Changes in cost of goods and transportation costs Jant Pharmacal CorporationLaboratory Distributor +4% Our suppliers Cardinal HealthLaboratory Distributor +2.5-5% Manufacturer increases; Commodity pricing

index (plastic, paper and oil) Laboratory Supply CompanyLife Science / General Chemistry +3.8% Inflational impact to pricing Sigma AldrichManual Microbiology Products +7-9% Significant changes in raw materials, manufacturing,

labor and logistics costs BDManual Microbiology Products +5-7% Cost of materials and overhead Remel Inc.Manual Micro-Old Select Tier +3-15% Significant changes in raw materials, manufacturing,

labor and logistics costs BDPathology / Histology Products +3-5% Yen and Euro to U.S. dollar exchange rate, raw

material, transportation and fuel increases Sakura Finetek U.S.A. Inc.Pathology / Histology Products +4% Raw material cost increases Thermo Fisher Scientific Inc.Protein Chemistry +3.5% Medical Consumer Index Beckman Coulter, Inc.Rapid Test Kits +4.1% Raw material costs as well as costs by increased

or decreased capacity utilization (labor costs) Abbott Laboratories Inc.Rapid Test Kits +3% Production, manufacturing cost, HIPIS, market

trends, and competitive market conditions Inverness Medical, Inc.Rapid Test Kits - Respiratory +1-3% Significant changes in raw materials, manufacturing,

labor and logistics costs BDReference Laboratory Services Unknown Labor, supplies, Medical CPI, equipment cost,

reimbursement, etc. Quest Diagnostics, Inc.Urinalysis Products Unknown N/A Bayer Diabetes CareUrinalysis Systems +5% Cost of materials Iris DiagnosticsUrinalysis Systems +3-5% Raw material, crude oil, labor and manufacturing Siemens Medical

costs Solutions Diag



MEDICAL SURGICALBone Densitometry 0% We expect BMD pricing to remain flat during 2008 GE Medical Systems LunarBone Densitometry / Mammography <0% Market conditions; product need Hologic, Inc.3D Clinical Solutions +5% R & D investment of new product introductions,

inflation and competitive market conditions Vital Images, Inc.Advanced Wound & Skin Care +3-6% Johnson and Johnson Hlth CareAdvanced Wound & Skin Care +3% Raw material costs, manufacturing / labor costs

and insurance Smith & Nephew, Inc.Advanced Wound and Skin Care +2-5% Competitors pricing, GP% Coloplast Corp.Air Filters +3-5% Raw materials, labor, and transportation costs AAF InternationalAirway Clearance System +3% Cost of materials Hill-Rom Company, Inc.All Self-Manufactured Products +0-1.9% Price of raw materials including natural rubber

latex, and fuel; foreign exchange rate Cardinal HealthAllograft Products & Tissue Pr +2-3% Donor services, product and labor costs Osteotech Inc.Anesthesia / Monitoring Machines +2-3% Costs in manufacturing, and overall inflation Draeger Medical, Inc.Anesthesia / Monitoring Machines Unknown Cost of goods, market conditions and age GE Healthcare

of product (Datex-Ohmeda)Anti-embolism Stocking 0% Raw materials and labor costs Encompass Group, LLCAntimicrobial Catheters +3% Manufacturing, raw material costs, CPI and

competitive market pressures Cook Medical IncorporatedAntiseptic Applicators 0% Raw materials, transportation, investment in

additional sales and clinical outputs, investment in additional FDA NDA submissions for new technology products Enturia, Inc.

Apparel and Textiles Unknown Raw material, energy and foreign exchange rate Medline Industries, Inc.Arthroscope / Endoscope Systems +3% Cost of raw materials and sales / marketing

related costs Smith & Nephew Endoscopy


Arthroscopy / Endoscopy Systems Video +1-3%;Arthro / Laparoscopy +2-4%;Sports Medicine +1-3%;Uro / Gyn +1-3% Raw materials, CPI, inflation and labor rates Stryker Endoscopy

Baby Care and Bath Products +3-6% J & J Consumer ProductsBeds and Related Products 0% Historically, our price level has been stable with

no price increases SIZEWise Rentals, LLCBeds and Related Products +~3% Raw materials, CPI, inflation and labor rates Stryker MedicalBrachytherapy Products 0% N/A Oncura, Inc.Bulk O2 / Cylinder Gases +4.5% max Raw materials, fuel and energy increases Airgas, Inc.Capital Equip / Proj Assess Svc 0% N/A EMTSCardiac Rhythm Mgmt. Products +3% R&D, competitive strategy and labor ELA Medical, Inc.Cardiac Catheterization +3% Labor rates and raw material cost increases and

component cost increases for purchased items Argon Medical DevicesCath. & IV Securement Devices 0% Manufacturing and distribution costs, and cost of sales Venetec International, Inc.Chart Paper +5% The cost of raw materials and labor expenses S & W Healthcare CorporationCharting & Computing Stations +3-4% Raw materials and other manufacturing costs Cygnus, Inc.Chest Drainage Systems 0% N/A Atrium Medical CorporationCommunications Systems +2% Technology and innovation Hill-Rom Company, Inc.Convective Therapy Systems 0% Raw materials and any increased production cost

Also transportation cost are a major factor since we pay the freight Arizant Healthcare, Inc.

Conventional Hypodermic +4-6% Significant changes in raw materials,manufacturing, labor and logistics costs BD

Cost Management Program Unknown Raw materials, energy; foreign exchange rate Medline Industries, Inc.CPT, Unitized Delivery Systems 0% No increase projected, custom trays increases /

decreases are determined by the member when adding or deleting items within the tray Medline Industries, Inc.

Cranio-Maxillo Facial Sysm. +6.62% avg Raw material and increased service labor costs Synthes CMFCritical Care Products for Mothers and Babies +2% Rise in labor rates and raw material increases Clinical Innovations, Inc.



Custom Non-Sterile Kits +8-10% Fuel, hence a piece of resin costs are up since the beginning of last year 20-25%. Direct increases from our manufacturing partners. Imports from the Pacific Rim will rise 5-6% due to increased quality control measures and the dollar falling. Should Congress choose to vote in any type of isolationist or protectionist anti-China legislation, we can look forward to increasing import costs. Care Line, Inc.

Custom Sterile Procedure Trays Unknown Not applicable to CPT products unless there is an authorized material change to a particular change.Such authorized material changes will be priced according to the price of the component item on which the material change takes place. AVID Medical, Inc.

Dialysis Products +0-11% Raw materials, fuel, transportation and C.R. Bard Inc.-manufacturing costs Bard Access Div

Digital Storage +0.8% Cost of doing business; market acceptance InSiteOne, Inc.Disposable Medical Paper Prod. Paper Products +4%; Raw materials price fluctuation; specifically, Pulp

Other Products +3-8% (paper), Resin and this year Chinese Value-Added Tax considerations TIDI Products

Elastic Bandages 0% Our raw goods costs and the exchange rate from the Euro Hartmann-Conco, Inc.

Electrodes / Cables / Leadwire +<4% These conditions could include, but are not limited to, supplier surveys, manufacturing costs and labor rates ConMed Corporation

Electrosurgical Products +4% COG MegadyneElectrosurgical Systems +<4% Conditions could include, but are not limited to,

supplier surveys, manufacturing costs and labor rates ConMed Corporation


Elevator Maintenance +8% Contracts are usually adjusted using an 80% / 20% split. Eighty percent being the labor accessed from our Union contract and the remaining 20% from the increase or decrease in the CPI - metals index. Otis Elevator Company

Endoscopy Services 0% Personnel wages and product price increases American Endoscopy ServicesEndoscopy Services +3% Any and all labor costs (insurance, etc.), instrument

and scope repair costs, new instrument capital costs and increases in technology (High Def Video, etc.) SSI Surgical Services, Inc.

Exam Gloves +9% Raw materials and transportation costs Tronex International, Inc.Fall Monitors and Sensormats 0% List prices have not changed in over 10 years Bed-Check CorporationFeeding Products +0-6% Raw materials, fuel, transportation and

manufacturing costs Bard AccessFloor Grade Surg. Instruments +6% The rising cost of fuel, material, labor, and service-

related expenses make it necessary to raise our prices next year. Specifically, fuel, international raw steel and plastic prices increased dramatically this year, in some cases over 60%. Sklar Instrument Corporation

Floor Maintenance Equipment +2-8% range; +3-5% avg Current and projected costs of oil / petroleum,metals such as copper, lead and steel, and resins Tennant Company

Fluid Management Products +0-3% Cost of raw materials, labor and fringe benefit and transportation costs Teleflex CT Devices, Inc.

Functional Bracing Products +6% Labor and materials DeRoyal Industries, Inc.Gas Plasma Sterilization Sys. +3-6% Advanced Sterilization Prods.Gastroenterology Products +3% CPI, competitive market pressures, manufacturing

and raw material costs Cook Endoscopy, Inc.GI Products +3-5% Material cost increases ConMed Endoscopic

TechnologiesGloves: Exam, Surgeons 0% No change if costs stay within 5% Medline Industries, Inc.Hand Sanitizers 0% COG’s, market share GOJO Industries, IncHardware / Plumbing / Lighting Unknown World events, world market demand for

commodity-based raw materials (i.e. metals,petroleum products)

Headwall Systems +3% Raw materials Hill-Rom Company, Inc.



Health Science Books & Media +5% Adjustments are publisher decisions. Factors such as fuel costs, paper costs, etc. are figured into pricing adjustments

Healthcare Packaging +12% Resin increases Action Bag CompanyHemostasis +3-6% Ethicon (J&J Health Care Sys.)High-End Patient Monitoring +0-8% Raw material costs, fuel costs, market conditions

and age of products GE Medical Sys. Info. Tech.High-level Disinfectants +3-6% Advanced Sterilization Prods.Holter Equipment & Supplies +2% Inflationary changes in economic conditions Spacelabs HealthcareHypo / Hyperthermia Systems +2% Raw materials, labor, transportation cost Cincinnati Sub-Zero ProductsHypodermic Safety Products +3% General inflation including transportation and

raw material cost increases Inviro Medical Devices, Inc.I.D. Bands +5% Petroleum based products; oil is increasing Precision Dynamics Corp.Image and Washable Apparel 0% N/A Cintas, Inc.Infection Control Products +3-5% Cost of raw materials, labor, freight, fuel and

other surchargesInfection Control Products +3% Petroleum, freight and labor Veridien CorporationInfection Prevention 0% Raw materials Ecolab HealthcareIOL Procedural Program +~3.5% Wage and manufacturing cost increases Alcon Laboratories, Inc.IV Start Kits +4-6% Significant changes in raw materials, manufacturing,

labor and logistics costs BDLaryngeal Mask Airways +<5% Production costs; market conditions LMA North America, Inc.Ligation Products +0-3% Cost of raw materials, transportation, labor and

fringe benefits WeckLithotripsy, Urology Tables +4% Labor, raw material, exchange rate Dornier MedTech America, Inc.Mattresses & Overlays +4% Raw materials Hill-Rom Company, Inc.Med / Surg Distribution Unknown When allowed - factors of transportation, DSO

(promptness in paying invoices), utilization of EDI,number of deliveries required, unit of measure, etc. Shared Service Systems, Inc.


Medical Gases, Cylinder & Bulk +4-5% Index- Med component CPI Praxair Healthcare ServicesMedical Supplies, Thermometers 0% Cost of goods, freight, fuel Omron Healthcare, Inc.Medical Treatment Recliners +3-5% Raw materials cost and fuel charges Champion Manufacturing, Inc.Medical Ultrasonics - Doppler +4% Cost increases (ex. freight) Huntleigh Healthcare LLCMedical / Surgical Distribution +4-6% Our margins remain the same for the term of

the contract. Only price changes from manufacturers will affect the sell price. Burrows Company (The)

Medical / Surgical Distribution +4-6% Increases from manufacturers as well as gas surcharges, etc. Hospital Associates

Medical / Surgical Distribution Unknown Dependent totally upon the manufacturer’s price to distribution Kreisers, Inc.

Medical / Surgical Distribution +3-5% Vendors, fuel, and freight Luffey’s Medical Surgical Sup.Medical / Surgical Distribution +3-5% Increases from manufacturers Midland Medical Supply

CompanyMedical / Surgical Distribution +3-5% Based on when manufacturers raise our costs

Fuel Surcharges and cost of fuel for delivery vans Physician Sales & Service, IncMedline Manufactured Products Unknown Raw materials, energy, foreign exchange rate Medline Industries, Inc.Needle less IV Connections +3-5% Significant changes in raw materials, manufacturing,

labor and logistics costs BDNeurodiagnostics 0% New products or replacement products VIASYS NeuroCareNeurology, Sleep Equip Studies 0% Cost of goods, cost of labor and market

environment Nihon Kohden America, Inc.Nuclear Medicine & PET Hot Lab +3-20% Prior years showed little cost adjustment whereas

2007 seems to be a bit of an anomaly with costs rising dramatically Medi-Nuclear Corporation

Nurse Call Comm. Systems +3% max The cost of raw materials, energy costs and labor costs GE Security, Inc.

O.R. Pads & Positioners 0% Material cost increases Action Products, Inc.O.R. Safety Products 0% Cost of raw goods Sandel Medical IndustriesOnsite Instrument Repair 0% N/A Pilling Surgical


Ophthalmic Products Blades flat; Cannulas +2%; Cannulas - new higher priced designs and market IOL’s +10%; Phaco shift from reusables to disposables; Blades - Overallequipment +2-3%; downward price pressure offsets increases on new Disposables +1-2%; product designs for small incision, sutureless surgery;Custom eye packs +2%; Custom eye packs - Labor cost increases; IOL’s - Instruments +2-4% Increased use of higher priced new technology

IOL’s including aspheric and refractive IOL’s;Equipment - Technology, increasingly complex and full featured machines being introduced into the market; Equipment Disposables - shift in pack configurations and addition of new components coinciding with introduction of new equipment consoles; Instruments - Increased labor, material and processing costs Bausch & Lomb, Inc.

Orthopaedic Softgoods +3-5% Product development DeRoyal Industries, Inc.Orthopedic Devices 0% Transfer cost, competitive pricing, manufacturer

change and material production cost Orthofix, IncOrthopedic Supplies +5-6% Manufacturing, transportation, energy costs, increases Zimmer, Inc.Outbound Freight Services +4-5%; Largest factors are labor and maintenance costs.

+3% small packages Historically, a general rate increase occurs once a year in January for both express and ground.Fuel surcharges change monthly. FedEx Corporate Services, Inc.

Pain Management System 0% N/A I-Flow CorporationPatient Footwear 0% Raw material cost, transportation and distribution

costs; fees charged by distributors and labor and overhead variables Principle Business Enterprises

Patient Handling Equipment +5% max Raw materials, labor, benefits, R&D, and freight HoverTech InternationalPatient I.D. Systems +3% Cost and labor NewBold Corporation



Patient Safety Devices +2-3% Rising costs (e.g. raw materials, transportation, labor,misc. expenses) Posey Company

Patient Weighing Systems +3-4% Increased cost due to escalating prices for raw material, purchased components, freight, freight surcharges, and energy SR Instruments, Inc.

Perinatal Care +2-3% Cost of manufacturing; gas Draeger Medical, Inc.Personal Hygiene Products +4.5-6% Raw materials, transportation Derma Sciences, Inc.Pharmacy Furniture / Carts +5% Cost of goodsPoint of use inventory Systems 0% Labor and cost of raw materials Par ExcellencePortable Monitors +~2% Increase in costs of goods from our suppliers,

labor rate changes Datascope CorporationPowder-free Gloves, Scrubs 0% Cost of raw materials, fuel and labor Regent MedicalPromotional / Apparel Program +4% Raw materials, freight and transportation fuel costs Healthcare Dist. Alliance-HDAPulse Oximetry Devices 0% We have not had any price increases for a few years,

and do not anticipate one in 2008 Nonin Medical, Inc.Q-Stye Needleless +3-5% Significant changes in raw materials, manufacturing,

labor and logistics costs BDRegional Anesthesia Products +5-7% Significant changes in raw materials, manufacturing,

labor and logistics costs BDReprocessing Services 0% Increase in supplier costs Hygia Health Services, Inc.Respiratory Therapy Products +2-5% Previous FY cost increase Allied Healthcare Products IncSafety Hypodermic Needles +3-5% Significant changes in raw materials, manufacturing,

labor and logistics costs BDSafety IV Catheters +3-5% Significant changes in raw materials, manufacturing,

labor and logistics costs BDSecure Email Services 0% N/ASecurement Devices +4.5-6% Raw materials and transportation Derma Sciences, Inc.Sequential Compression Devices 0% N/A Compression Therapy

ConceptsSequential Compression Devices 0% Manufacturing cost of goods and market dynamics Huntleigh Healthcare, Inc.Sharp Collectors +6-8% Significant changes in raw materials, manufacturing,

labor and logistics costs BD


Skin Care +3-6% Johnson & Johnson Healthcare

Skin Care / Incontinence Care 0% Raw Material, shipping, and contract filling costs Touchless Care Concepts LLCSpecialty Catheters +2-5% Competitors pricing, GP% ColoplastSpecialty Critical Care Prod. +2-4% Primarily cost of raw materials and direct labor

(variable manufacturing costs) Utah Medical Products, Inc.Specialty Distributor Unknown Any price increases would be based on increases

from manufacturers Tri-anim Specialty IV and Pump Sets 0% Raw material and transportation costs ICU MedicalSpecialty Surgical Blades +3-5% Significant changes in raw materials, manufacturing,

labor and logistics costs BDSpecialty Therapy / Bariatric +6-8% Cost of steel and resin Hill-Rom Company, Inc.Stainless Steel Equipment and +3-4% Energy factors and the price of nickel and chrome Brewer CompanySterile Reprocessing Services +/-5% Labor costs, G&A, regulatory requirements / fees,

fuel charges, new device categories added to reprocessing list SterilMed, Inc.

Sterilization Containers Keep or Reduce Prices N/A Case Medical, Inc.Sterilization Containers Unknown Cost of raw material impact, to include aluminum,

steel and related packaging. Additional considerations for labor rates and petroleum rates. Cardinal (V Mueller)

Sterilization Containers & Acc +3-5% Cost of raw materials, labor, freight, fuel surchargesStretchers +~3% Raw materials, CPI, inflation, labor rates Stryker MedicalStretchers and Accessories +4% Raw materials, labor costs Hill-Rom Company, Inc.Suction & Oxygen Therapy 0% Cost of components Ohio Medical CorporationSuction Instruments / Tubing +<4% Supplier surveys, manufacturing costs and

labor rates ConMed CorporationSurg. Blades, Scalpels, Razors +3% Raw materials (steel, resin), wage rates and

transportation Personna Medical



Surgical Blades +11-13% Significant changes in raw materials, manufacturing,labor and logistics costs BD

Surgical Equipment 0% Raw material cost fluctuations Advance Medical Designs, Inc.Surgical Equipment & Supplies +2-4% Raw materials, CPI, inflation, labor rates Stryker InstrumentsSurgical Equipment Drapes +5% Labor, freight, raw materials, etc. Microtek Medical, Inc.Surgical Headlights 0% Cost of raw materials, transportation, freight, fringe

benefits, etc. Pilling-Weck IncorporatedSurgical Instruments +3-5% Euro to the USD conversion rates, air freight,

cost of labor and raw materialsSurgical Instruments +0-5% Cost of stainless steel, transportation, labor and

fringe benefits Pilling Weck IncorporatedSurgical Mesh Most products +3-6%;

Some proprietary products +<10% Ethicon (J&J Health Care Sys.)

Surgical Mesh Products +0-6% Raw materials, fuel, transportation, and manufacturing costs Davol, Inc.

Surgical Scrub Brushes +9-11% Significant changes in raw materials, manufacturing,labor and logistics costs BD

Surgical Tables / Lights, Booms 0% List prices are not “adjusted”. If new products replace an existing product, the price for the new product may have a higher list price as respects the added benefit of the new product. Skytron

Surgical / Endoscopy +3% avg Material, Healthcare, labor DeRoyal Industries, Inc.Televisions / Video Equipment -15-25% Consumer demand for specified panel sizes and

the costs of manufacturing coming down TeleHealth a div. of TelerentTemporary Medical Prof. Staff +3-5% Pricing models from other competitors, marketplace

pressures from employee cost, travel expenses, and facility needs RTTEMPS & RNTEMPS

Textiles & Apparel +0-3% Price of cotton, oil, freight, labor Encompass Group, LLCTextiles & Apparel +5% Increasing cost of raw materials Standard Textile Co., Inc.Therapeutic Products +4% Labor, raw materials,exchange rate Dornier MedTech America, Inc.Therapeutic Products +3% Manufacturing costs Sunrise Medical


Thermometry +3.1% Raw material cost, energy, labor, rate of overall inflation Welch Allyn, Inc.

Topical Adhesives +3-6% Ethicon (J&J Health Care Sys.)Unitized Delivery System +2-6% Component items for tray DeRoyal Industries, Inc.Urological Products - LTC +0-6% Raw materials, fuel, transportation, and

manufacturing costs C.R. Bard, Inc.Urological Products-Acute Care +0-6% Raw materials, fuel, transportation, and

manufacturing costs C.R. Bard, Inc.Urological Specialty Products +3% Research and Development of new products,

material costs, inflation rate Cook Urological, Inc.Vascular Grafts +0-8% Raw materials, fuel, transportation, and

manufacturing costs Bard Peripheral VascularVascular Sealing & Stent Dev. +5% Competition, obsolescence, etc. Abbott Laboratories, Inc.Wound Care Products 0% Cost of raw materials, fuel and labor Molnlycke Health Care, Inc.Wound Drains +3-6% Ethicon (J&J Health Care Sys.)

MEDICAL SURGICAL / IMPLANTABLE DEVICESHips +4.8% Increases to list price Aspen Healthcare MetricsKnees +5.6% Increases to list price Aspen Healthcare MetricsTrauma +7% Increases to list price Aspen Healthcare MetricsSpine Implants (Metal) +4% Aspen Healthcare MetricsBone Products +4-8% Aspen Healthcare MetricsBMP +2% Increases to list price Aspen Healthcare Metrics



Rhythm ManagementPacemakers +5-7% Cost pressure caused by advances in remote

telemetry monitoring and programming being introduced into pacemaker platform Aspen Healthcare Metrics

Defibrillators +4-8% Cost pressure caused by advances in remote telemetry monitoring and programming features Aspen Healthcare Metrics

CRT-D +4-8% Cost pressure caused by advances in remote telemetry monitoring and programming features Aspen Healthcare Metrics

Coronary StentsBare Metal / Cobalt Cromium -7% to -10% Downward price pressure on this category of

cardiac stent caused by pressure from DES cost reductions and the acknowledgement that there must be a cost gap to incent their use Aspen Healthcare Metrics

DES -7% to -11% Overall penetration of DES in PCI has topped out.Vendors are nervous about the two new DES stents due out on the market in 2008. Medtronic has one and Abbott and Boston Scientific will both sell the other. Vendors are aggressively approaching hospitals to lock up market share. Aspen Healthcare Metrics

Heart ValvesMechanical -5% to -9% The percentage of mechanical valve implants

continues to decline. Many hospitals and some IDNs will find it possible to commit market share to one vendor to capitalize on aggressive pricing. Aspen Healthcare Metrics

Tissue +4-8% Entry of new tissue valve vendors into the market will foster increased competition if the new products are clinically acceptable. Aspen Healthcare Metrics

Special Procedure Devices +18-20% Advancements to technology and the introduction of new devices continue at a rapid pace for interventional radiology creating an upward pressure on cost. Significant growth in neuro-vascular interventions involving stents and embolizing products will contribute 18 to 20% growth in cost. Aspen Healthcare Metrics


Perfusion Supplies 0% Aspen Healthcare MetricsBalloons and Wires -5% to -8% Aspen Healthcare MetricsOff Pump Products +2-4% Upward cost pressure caused by advances in

technology and routine abandonment of prior iterations Aspen Healthcare Metrics

PHARMACYOverall Estimate +8% to +9%Branded Drugs on Contract +5% to +8% Recent industry trends; CPI-U Market Basket IndicesNon-Contract Branded Drugs +8% to +12% Recent industry trends; CPI-U Market Basket IndicesBranded Drugs Going Off-Patent -20% to -90% Recent trends; competition; Market forces MedAssets dataGeneric / Multisource Products -2% to +4% Down = competition / contracts; Up = Raw Material Industry TrendsIV Solutions +3% to +5% Long-term contracts; competitive marketplace, CPI-U, Baxter / B.BraunI.V Pumps and Pump Sets +3% to +5% Long-term contracts; competitive marketplace, CPI-U, Baxter / B.Braun /

Hospira / AlarisPlasma Products (IVIG / Albumin) +8% to +10% Tight market; industry trends Industry TrendsNew Drugs on the Market +10% to +15% May be less depending on competition in the Tx Class Industry TrendsInflation Due to Patient Volume and / or Mix Varies All significant changes should be accounted for Industry Trends

RADIOLOGYChest Radiography CAD 0% No price adjustment. May offer more cost

effective leasing option. Riverain Medical Inc.Computer Aided Detection +3-5% R&D, Wages and Benefits, and Raw Materials iCAD, Inc.Diagnostic Imaging Equipment +3-5% Materials, manufacturing costs, service costs Philips Medical SystemsDiagnostic Instruments +3.5% Raw materials, energy, labor, rate of overall inflation Welch Allyn, Inc.Dosimetry Services +10% Shipping costs have increased dramatically this year Radiation Detection CompanyImaging Peripherals Unknown Pricing depends on manufacturers, there are no

scheduled adjustments Ampronix, Inc.



Interventional Radiology Prod. +3% Manufacturing Costs, Raw Material Costs, CPI,and competitive market pressures Cook Incorporated

Mobile Imaging Services +3% Market conditions and cost of sales DMS Imaging, Inc.MRI Contrast Media +7% Changes / Opportunities Bracco Diagnostics Inc.Patient Monitoring Equipment +3-5% Materials, manufacturing costs, service costs Philips Medical SystemsPatient Monitoring Equipment +~2% Raw materials, energy, labor, and the rate of

overall inflation Welch Allyn Protocol, Inc.Picture Archiving & Comm Syst 0% Price adjustments are determined by competitive

market conditions FUJIFILM Med Sys. U.S.A., Inc.Radiology Distribution Unknown Manufacturers usually dictate if price increases

are needed Sourceone Healthcare Tech.Radiology Safety Products +1-5% Cost of materials AADCO Medical, IncRadiology Supplies, Storage +3-5% Cost of raw materials, labor, and overall costs of

running the business St. John Companies, TheRespiratory Monitoring Equip. +5% Petroleum Price Index / CPI Westmed, Inc.RPI-Contrast Media MRI +7%; X-Ray +5% Changes / Opportunities Bracco Diagnostics Inc.Select Radiology +10-28% Raw material E-Z-EM, Inc.X-Ray Detectable Lap Sponges +4.5-6% Raw materials, transportation Derma Sciences, Inc.

RESPIRATORY THERAPYAdult and Infant Ventilators +4% Cost of goods and competition VIASYS Respiratory Care, Inc.Arterial Blood Gas Kits +5% Petroleum price Westmed, Inc.R.T. Products +0-3% Transportation, cost of raw materials, labor and

fringe benefits Hudson RCI


Page 24

ABOUT MEDASSETS

MedAssets partners with healthcare providers to improve their financial strength by implementing integrated spend management andrevenue cycle solutions that help control cost, improve margins andcash flow, increase regulatory compliance, and optimize operationalefficiency. MedAssets serves more than 125 health systems, including2,500 hospitals and 30,000 non-acute care healthcare providers.For more information, go to www.medassets.com.

OUR SUPPLY CHAIN FOCUS

According to the Association for Healthcare Resource and MaterialsManagement, there are five dominant issues that impact a hospital’sfinancial performance and ability to deliver quality care:• Constrained Reimbursement• Declining Operating Profit Margin• Ever-Increasing Cost of Care• Labor Shortages• Need for Capital Equipment

To maintain a strong financial position, hospitals need more than a goodportfolio of contracts from a typical GPO.

That’s why MedAssets Supply Chain Systems offers customized solutionsfor large IDNs, single hospitals and alternate care facilities. We reducesupply costs by 3-10% on common medical supplies, pharmaceuticals,physician preference supplies and capital equipment.

Physician preference items, for instance, account for about 40% of totalsupply expenditures, with prices continuing to rise. But through ourstrategic business partner, Aspen Healthcare Metrics, we can reduce PPIexpense by 5-18%—guaranteed.

We do it by gaining physician support and standardizing price rather thanproduct. This is a key differentiator for MedAssets and way for customers to see immediate cash flow improvement.

Our technology includes our proprietary custom catalog calledCDQuick® (Contract Data Quick) and Strategic Information tools. All ofour applications work with your existing IT assets.

*Association for Healthcare Resource and Materials Management’sPerformance Indicators Study on Healthcare Surgery Supply ChainManagement, 2004.

SUMMARY

Thank you for your membership with MedAssets. We look forward tomany more years of partnership with you. For more information on anyof our programs and services, please call 800.950.4722 or visitwww.medassets.com.

MedAssets® and CDQuick® are registered trademarks of MedAssets, Inc. © MedAssets 2007. All rights reserved.

MedAssets Supply Chain Systems3221 McKelvey Road, Suite 301

Bridgeton, MO 63044800.950.4722

www.medassets.com

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