1. 5 Medical Device Strategies Doomed to Fail in 2012 Presented by Gunter Wessels, Ph.D., MBA gunter@mytigi.net @gunterwessels on twitter Partner, TIGI February 29, 2012 MedDevice Group TIGI 2012 All rights reserved

2. Failure Defined Sluggish growth Market share decline Price/margin erosion Commoditization Diminished profitability TIGI 2012 All rights reserved

3. The Big 51. Pricing Confidentiality Agreements2. Additional Salespeople3. Geographic Market Assignment4. Appeal to Physician Preference5. Feature-Advantage-Benefit Sales and Marketing TIGI 2012 All rights reserved

4. 1. Pricing Confidentiality Agreements Price Benchmarking Group Purchasing Organizations TIGI 2012 All rights reserved

5. Competing in Healthcare in 2012 Maximize Offset Minimize TIGI 2012 All rights reserved

6. 1. Pricing Confidentiality AgreementsPrice Benchmarking Group Purchasing Organizations Consulting Organizations Federal Supply Schedule TIGI 2012 All rights reserved

7. 1. Pricing Confidentiality AgreementsREMEDY: Controlled Pricing Policy Justified Product/Service Variants Specified GPO Agreements At-Risk Contracts TIGI 2012 All rights reserved

8. 2. Additional Salespeople Market Consolidation Mergers & Acquisitions TIGI 2012 All rights reserved

9. U.S. Healthcare Spending $2.5 Trillion in 2009 and 2011 Investment $156B Public Health $77B Administration $163B Hospital Care $759BDurable Medical Equipment $78B Home Healthcare $68BNursing Care Facilities $137B Rx Drugs $250B Dental & Other Care $292B Physician & Clinical Services $506B TIGI 2012 All rights reserved

10. Persistent Downward TrendNumber of Beds and Beds per 1,000 population TIGI 2012 All rights reserved

11. AHA Hospital Market 5795 Registered Hospitals in 2009 TIGI 2012 All rights reserved

12. Systemization in Acute CareNumber of U.S. Hospitals in Health Systems TIGI 2012 All rights reserved

13. 3. Geographic Market Segmentation TIGI 2012 All rights reserved

14. 3. Geographic Market Segmentation Centralized vs. Local Control CMS rule draft favors centralized control Opposed by MD and RN groups; Favored by AHA and FACHE TIGI 2012 All rights reserved

15. Medicare Hospital Market 4660 Medicare Providers in 2009 Critical Access Hospitals Large Urban 1290 Facilities 1310 Facilities 3.8% of Discharges 45% of Discharges Rural >50 Beds 153 Facilities2% of Discharges Rural