Stop Leaving Money on the Table with Inefficient Contract Management

This is Tom Salemi of DeviceTalks. Welcome to opening day of season 2025 of DeviceTalks Tuesdays. Very happy to have a powerful leadoff hitter, AcuityMD, kicking off this season with their presentation, "Why Inefficient Contract Management Is Costing You Money." So really appreciate everyone who has registered for our sessions so far. Great to have the community back, and we look forward to bringing you many great stories going forward. So, very quickly, once again, if you are back for the first time this year and you need a refresher, please submit your questions in the Ask Question widget. That's the Q&A box. We will likely save all of those for the end, but if there's one that's really topical and timely and makes sense to ask then and there and now, we'll do that.

But as always, please ask your questions as they come to mind so we know how many there are, and we can just prepare a much cleaner presentation for you. Please check the Resource widget for resources. That's where we'll keep them. And if you folks who are lucky enough to be attending live, please share a thumbs up, a heart, a smiley face. Show some love to your participants here and your leaders here at DeviceTalks Tuesdays. We love getting the emotional support and feedback. And finally, I didn't do my little kick-off comment, but I'll do it in a moment. Oh, there we go. Amira Wanninger, our producer already did that. Use our attendee chat box to offer up comments. We'll have a couple of points in the presentation where we'll be soliciting some feedback from you in the attendee chat box, so be ready for that. But please, if you have questions that you want addressed during-- Thank you all for all the emojis. Those are great. I feel very loved.

If you have questions that you want addressed during the Q&A session, please put them in the Q&A box. It's cleaner and simpler that way. But in the attendee chat box, let us know where you're at, what the weather is, if it's snowing, if it's sunny, if someone's at the beach, someone's skiing, whatever. We love to just know a little bit about what's going on in your lives. So, we have podcasts, lots of podcasts. Go to devicetalks.com or subscribe to DeviceTalks Podcast Network on any major podcast player. And of course, we'll be meeting in person. You'll get to meet me in the halls of the Boston Convention Exhibition Center on April 30th and May 1st. Looking forward very much to getting together with folks at DeviceTalks Boston. We'll have Ivan Tornos as the opening keynote. There's the CEO of Zimmer Biomet and some other great panelists as well. And we don't have a slide for it, but we'll also be at DeviceTalks. We'll be back in Minnesota. DeviceTalks Minnesota is returning on June 11th at the McNamara Alumni Center, and we'll have a slide for that next week. But registration is open for both, and we'd love to see you in person. So if you're on the East Coast, join us in Boston. If you're in the Midwest, join us in Minnesota.

If you want to attend both, by all means, do that. I'd love to see you there. And all right. Let us start today's presentation. Once again, AcuityMD, they have been a sponsor of DeviceTalks since the day I started. I think they were one of our earliest sponsors when we rolled out DeviceTalks Tuesdays and our podcast. It's been fun to grow alongside them and to watch them really take off and take over. So very happy to continue to help them tell their story. So our panelists today, our experts on the panel are Tom Middleton, he's the Vice President of Strategic Growth at AcuityMD, and Alex McLaughlin, he's the US Director. Oh, I'm sorry. And Alex McLaughlin, he's US Director Commercial of Intellijoint Surgical.

So Tom's with AcuityMD, Alex is at Intellijoint Surgical, and I clearly need to polish my game a bit more. I'm a little rusty. So before we get into the presentation now, we're going to open up with a poll question. So I'll click over to the answers in a moment, but here's the question so you can read it in big letters so we all can see it clearly, if any of you are watching your phone read. How many contracts does your company currently have in place with integrated delivery networks or group purchasing organizations? So I'm going to click over to the answer slide, and we have our choices here. Slides...

Sorry, getting a phone call, and I didn't know if it was Amira telling me that no one could hear me. It was not. All right. How many contracts does your company currently have in place with integrated delivery networks or group purchasing organizations? You can see A is 1 to 10, B is 11 to 50. And as you answer, you need to push the Submit button, which will be down below. You may need to scroll down a bit to see it. So A is 1 to 10, B is 11 to 50, C is 51 to 100, D is 100 plus, and E is I have no idea. I'm not sure. So I'm going to continue talking until we give you all a chance to vote because there's probably about a seven-second delay between what I say and what you hear because I can't be trusted, and they need to have a... No, they don't have a dump button. But no, I think we're getting... Oh, we've got an answer in the Q&A chat box. If you could push the button on... You should be able to vote on the presentation. So there's a Submit button at the bottom, and you should be able to get your answers there. So continue for just a few more minutes. Excuse me, a few more seconds. I won't drag this on too long because this is awfully painful, and then we'll get into our presentation. All right.

I think we're good. Going to do our next slide. All right, so here we go.So I see the answers, but I'm going to leave the interpretation of them open to our experts. We have Alex McLaughlin and Tom Middleton. Welcome both to "DeviceTalks Tuesdays."

Hey, Tom. How are you? Doing great. So what do these numbers tell you? Are you shocked? Did you get knocked off your feet by what you're seeing here, or is this- No. That's a very honest response. Yeah. Pretty typical. Pretty typical? All right. Yeah. All right, good.

Well, we've got a good typical crowd here for you at "DeviceTalks Tuesday," which means they're fantastic, and we'll let you take it away from here. Once again, we'll have an opportunity for you to participate in the conversation in the middle on the attendee chat box. I'll let you know when that's coming up. And ask your questions in the team... I'm sorry, in the Q&A box, so we can get you the information you need at the end. So take it away, gentlemen.

Sounds good. Thank you. Thank you, Tom. So introduce myself. I'm Tom Middleton. I've been in the healthcare data space for about 22 years with a focus on providing data around IDN and GPO contracts for mostly national accounts teams and specifically in the medical device space. So don't let the 22 years throw you on how old I am. I started in the industry when I was 12, so there's that.

And I'm Alex McLaughlin. I am the Director of Commercial at Intellijoint Surgical. Just really excited to be here. I think this is a topic that a lot of people, a lot of companies can benefit from, and that's the really cool, nice thing about the med tech sector that we're all in. It's collaborative. And just happy to share what we've learned along the way to be doing things a little bit better. All boats rise with this tide.

That's great. Feel free to make jokes during your presentation. We can't hear people laugh, but I always like to assume that they're just guffawing and can't catch their breath. So just go with that self-delusion and you'll be fine. As a father of three, I'm used to jokes that don't land. No kidding.

Yeah. Father of three as well with triplets. So they're 22, so I've heard them all. Absolutely. Holy moly. No. I'm really excited to be here with the team and also with Alex at Intellijoint Surgical, who is one of our clients, who was able to successfully maximize the revenue value with our platform. So Alex, as I go through these next few slides here, and feel free to add any insights as you like. And then Alex will be kind of presenting some slides through this as well. So like I mentioned earlier, I've been working with suppliers to help them identify ways to drive compliance with their IDN GPO contracts for well over 20 years. And the amount of sales opportunities that fall under contracts has been steadily increasing every year.

Prior to launching our new contracts platform, we wanted to kind of quantify this shift at the supplier point of view. So we decided to survey about 150 med tech executives from a variety of different company types, revenue, maturity, and number of employees to get a broad cross-section. And what we found is almost all suppliers struggle to maximize contracted revenue, and it's a problem everywhere. It's not just with the big or small companies. It's not limited to certain size or maturity. It's all over the board. So, this should be really interesting. If you've never seen our survey, there's definitely some good insights for you as well. The large companies with enough resources have set up many processes to manage these contracts, and for the smaller companies, they're starting to work through what the process will look like. And in most cases, it'll end up being kind of a version of what the larger company is already doing. But either way, both are going to end up kind of in the same place, is struggling to get actionable information into the hands of the reps.

And the next slide you see here from our survey, contracts drive the majority of revenue for most companies, regardless of the size. And you'll see on average, 67% of companies get 70% or more of their annual revenue from contracts, with some seeing over 90%. There's no doubt that contract revenue is now a massively important strategic opportunity for the supplier community. This is a significant change from days past when a rep would sell to a doctor first, then work on expanding across the facilities those physicians practice in. Now you sort of identify first what contracts is in place for that facility, work with purchasing, and then target that right physician that utilizes your product.

After COVID, really there's a lot of changes that happened in the healthcare industry, and one of those is many physicians are employed at the hospital or IDN, and it's kind of taking away some of their purchasing power.

One area we see companies- And that was all of that... Oh, yeah. Go ahead, Alex. Oh, I'm just saying that was no different for us at Intellijoint. We're on the smaller end of things. We're a scale-up organization, but the amount of revenue coming from contracts, even for the size and scale of our company was in the 80% range. I think one of the other things that's changed a lot recently is negotiating at an IDN level, even for small and scale-up organizations, is becoming important. I'll be honest, we had probably over 250 contracts that we were trying to manage, but we were doing that at a local hospital level. So that's another pain point that I'm sure some organizations are feeling as well, is how do you transition up the kind of value ladder to IDN level?

Yeah, I totally agree with you. One of the other parts that we felt is it's a little bit of a tongue in cheek, but that contracts themselves are becoming more like market access. You can spend all this time to get them in place, but just having that piece of paper, the DocuSign, doesn't give you any guarantee of revenue. It's kind of where the whole selling process starts now is having a contract in place. Yeah. And that's not easy to do, right? It takes a lot of work to get those contracts in place. It absolutely does. Yep.And another area we kind of see companies struggle is they don't have a great process to make those contracts actual at the rep level. It's hard to keep track of what providers have what privileges or what IDN, and if a facility has joined or left the health system that's under contract, or even, what GPO affiliation they fall under. It could be one single source, multi-source. A rep has to deal with many complicated situations in the field, such as they might have a relationship with a physician.

They don't know which facilities they practice in, or which facilities are under contract for their product. Like for example, they might approach them on an off-contract facility, like approach a physician on an on-contract facility and run straight into a wall. Whereas the next day, the surgeon might be at a different facility that's on contract, and you can close that deal in under an hour.

And also with the shift of ASCs, this really kind of compounds the problem at the rep level is, many physicians are practicing and performing surgeries at multiple locations with separate contracts at each of those facilities.

This is simply too much information for the reps to memorize, even the veteran reps that are out there. It's just a lot to take in and try to keep up with all this information, especially when it's constantly changing, right?

There is a wealth of information in these contracts that can point a rep to an easy sale. But to unlock the maximum value, it's vital that you put the information into action. And this slide here, I really love this slide. It kind of gets to the root cause of the problem. And it's not just national accounts and reps that struggle, it's sales operations, it's regional managers and VPs as well. Most contracts are currently tracked on a spreadsheet. So you can imagine how much time operations managers and national accounts are spending making these updates and changes to the contract details in those spreadsheets. And even if it's on a shared drive, and you have a tech-savvy rep who checks that spreadsheet on their own, there's still a pretty good chance a new facility has been added or one that's changed affiliations, that hasn't been updated.

Giving wrong information to the sales team is not only bad for the rep, but detrimental to the whole sales organization. Actually, the whole organization. Your name brand is out there, and you've partnered with these IDNs, and they're missing out on being that true strategic partner with that health system.

And that's kind of what the IDNs are looking for, right? They want to partner with companies that could drive compliance with that contract. And at the heart of the problem, we see from our survey here, you see three graphs. A couple of big ones stand out is the complexity of contracts is a problem, and the health system consolidation as well.

Like that post-COVID landscape I was talking about has highlighted differences between thriving and struggling hospitals. And actually, nearly 40% of facilities are still operating in the red. Alex, do you know that? 40%. Oh, a bit of a running joke was I used to have a Google alert with some keywords. I had hospital and merger together, and it basically turned into junk mail. I was getting so many emails about all these notifications, and I'm sure we all subscribe to all the newsletters. It's a business unto itself to just figure out who's got what affiliation. So that hits home for me, for sure. Yeah.

Last year, at the end of last year, we noticed a big increase in merger acquisitions. And everything I've been reading is this year, this is going to be even more IDN consolidation and even supplier consolidation. I think that's going to kind of ramp up this year. So I'll pull some stats. I was reading some information the last couple of weeks, and for example, last year's third quarter hospital merger and acquisition deals were up 80% over the previous quarter, which is kind of shocking.

Larger IDNs with scale and stability are looking for opportunities to expand by acquiring those distressed facilities, like 40% of facilities in the red. And a lot of IDNs are also looking to expand into the ASC market as more volume continues to shift to outpatient. And the high cost of technology, too. I mean, it costs a lot to build that infrastructure, that technology infrastructure with these health systems, and it's making more of a practical move for mergers and acquisitions that helps those larger health systems spread expenses and enhance services and improve efficiency across their networks.

Many systems see geographical diversity as a long-term benefit as well, the ongoing consolidation trend. But this really kind of increases the challenge for reps because now these consolidating IDNs are crossing state lines, overlapping multiple territories, and expanding into ASCs.

So maybe, Alex, I'll turn it over to you if you want to expand on some of the challenges that you've seen and facing and maybe faced in the past. Basically, everything that you've touched on hits home.

When we talk about 12 months ago, we just had an incredibly fragmented process. Like a lot of scale-up organizations, we had spreadsheets, like you mentioned. We had this information kind of stored in a variety of places that we're asking our selling organization, our field sales organization to continue to grow the business, chase new business, and oftentimes, that's meaning more windshield time or airplanes. And so even the small details of having this information in a non-mobile friendly format, I mean, the reality is now we're asking a rep to pull over on the side of the road or whatever, pull into the parking lot 15 minutes before to pull open their laptop. It just wasn't working. And you absolutely nailed it, that this information is basically obsolete by the time you hit save on a spreadsheet because of all of the M&A activity that's happening. And so for us, and what was keeping me up at night is just the-inefficiency that I saw across the entirety of the sales organization. We had one example of, I'm sure everyone kind of knows Providence is an IDN. We had an IDN-level agreement with Providence, and something we should be really proud of as an organization, but what we didn't have is that info didn't translate across, so Rep A in Portland gets the deal signed, but Rep B in Los Angeles doesn't understand. And so I was seeing all of these things kind of happening and trying to connect stuff as much as possible, trying to help lead the sales organization, and it just was stacking up to just some massive revenue misses that I knew we could do better.

Yeah. So it's really the whole manual process, right? That's what everyone's used to doing. Absolutely. But as technology grows and expands, new products are coming out all the time to help the whole organization. Technology, really, getting that right information in a platform is really kind of the future of healthcare and driving compliance of those systems. Yeah. So you see in this one, this is a good one here. So, like I said, this manual process creates a lot of extra work for everybody across the whole organization. It actually slows down the sales cycle because of the time and energy it takes to share accurate information, which is really counterintuitive, Alex. You think of having a contract would actually help, and having a contract in place should actually make it easier to close deals. But these methods are also really hard to scale. As sales teams grow, you start to add new reps, and then you have some that are tech-savvy, some aren't.

It's like, you have a territory change, for example, and now you have a bunch of new reps that need updated contract information for new territories. Yeah. We actually, we had a funny story even in that. We had one of our territories sharing contract information in a shared Apple Note, so they kind of understood both pricing and where things were approved, and we had a new person join the team that had an Android. So just the kind of hilarious fragility of all of these systems, that new individual couldn't access this information that the team had been sharing for years. So it- Oh, the dreaded green text. That's it. That's exactly it. Yeah. They were ostracized immediately. Yeah.

So, exactly right. And kind of what we see now is a lot of companies, like the best-in-class method, is company will buy third-party healthcare affiliation data from maybe one or two different sources and do some fuzzy matching against their existing contracts and get a decent working model of where they think they have on-contract opportunities. But creating this view is a huge burden, and it's still limited on how effective it will be for the reps in the field. So what often happens is, you get a new existing contract change comes in, and that's communicated out to the whole sales team, but it's not really personalized for the rep and doesn't really specifically show what impact it means for them.

Yeah. And after this email is sent, a rep still needs to do the legwork on their own to figure out what they can do with this new information. Yeah. Can you imagine how much time this takes away from the rep? They only have so many hours in the day, little time for calls, texting, or trying to pull up a spreadsheet, like you said. They're pulling over the road or maybe they're... Some of them are driving with their knees as they're opening up these spreadsheets.

Yes. But the funny thing is, sales support thinks this is a great system, but when you talk to the rep, you hear a totally different story. And it's just not effective or efficient for a rep to be going into a meeting and then reach out to sales ops and hope they get a useful answer in time, right? Yeah.

So I was talking to a lot of national accounts people, and a couple of weeks ago, I was talking to one of them and just kind of asked him, "What is your job description? I know you negotiate these contracts. It takes years to build them up, but what do you do after that? What do you guys do to help drive compliance of this contract?" And he said, "Oh, actually..." I said, "Who helps you with it?" That was my question, is like, "What support system do you have in place?" And everything else. And I was really surprised, he's like, "Oh, that's what I do, because I actually go through a spreadsheet. We have third-party data. We go through, we try to figure out white space opportunity and what physicians are utilizing our product." And he builds these customized spreadsheets and dashboards.

I said, "Well, how much time does that take you?" And he's like, "Probably like 90% of my time is spent just doing that," creating these views with the reps and then gets on a phone call, has weekly calls, and texts back and forth. So it's really maddening how there's a lot of burden put on national accounts and reps to drive compliance with contracts, for sure. Yeah. No one's happy, right? No one signed up to necessarily do that. I think some of the best, for those that have carried a bag, the best-performing reps probably don't like doing it. It feels like busywork to those in national accounts, and I think we're all just itchy that there's got to be a better way to do this. Yeah. Imagine if you could streamline that. So the hard part is getting that contract. Imagine if you can streamline, cut down 50% to 60% of that time, maybe even more, and just purely drive compliance of that contract, how many more contracts you could get and how happy would the IDN customer be. Yeah. So that's why we're here today.

All right. And I think we have a chat right here, Tom? Yeah, we do. Yeah, I stole your thunder. I put it in the attendee chat box two minutes ago- Oh, perfect... because I wanted folks some time to think about it. So what method does your company use to share contract updates? We've got one reply in the attendee chat box from Razan. Thank you, Razan, for being part. Anybody else out there want to share? I know your- Yeah. I'd love to hear... name is assigned to- Yeah Like any way at all, like is it email? Is it weekly meetings? Is it weekly calls? Is it text? Is it some kind of chat tool, or everything? Smoke signals, or- Yeah Nice The dreaded reply all email, where you get all this information you don't care about, and you start to tune out.

I just scream out the window, basically. That's all. Nice. I don't know who's listening, but- The joy from working from home. I scream a lot. All right. Well, folks, if you want to share a little longer, I know your name's assigned to it, and I don't think you're giving away state secrets, but-- Dave uses a little bit of everything.

Eric's got a question. We'll put that in the Q&A box. But all right, well keep the questions coming. Use the Q&A box for your questions if you wouldn't mind. I see DocuSign, stuff like that in there, and- Yeah... yeah. All stuff that makes it a faster process, but sometimes challenging to go back. It's a good document repository, but hard to go back and turn it into something actionable. We're a Google Docs organization, and it's not easy. There's so many spreadsheets around, so many untitled documents. You're like, "Which one is this untitled document? Which is that untitled document?" Anyway, all right. I'll let you guys continue with your presentation. Thanks, Brendon, for sharing. Keep it coming, folks. Yeah. Keep it coming. That's great insight.

So, in reality, like we said earlier, a contract should make the life of a rep much easier. But these manual methods, if anything, create more of a burden for the rep. It creates that extra steps, extra time lost, and worst of all, the information may be inaccurate to begin with. It's just not useful. Reps only have so many hours in the day, and the most of them are spent on the road. They don't have time to read every email, make every internal call, go back and forth over text messages. They need that information at their fingertips in real time. And then, some of the reps I talk to, I go to a lot of conferences, and I always ask them, some of our customers, "What really makes AcuityMD platform good for you at a rep level?" And a lot of them say, "It shrinks my territory to a manageable level." There's one rep in Texas that had a really massive territory, and they had to fly everywhere. It was too far to drive. And they're saying they're flying around, taking a lot of time and energy to get on a plane and go fly and make the most of your meeting is challenging these days.

And they said, "It really kind of shrinks my territory. I'm able to look at a geographical area, find those top opportunities, those top facilities that are on contract. I have the pricing right there, so I don't quote the wrong pricing. I know which facilities the physicians are practicing, and which facilities are under contract, and which ones aren't, and where that physician is on that particular day." So they're going to meet that physician or that facility, and he said he was able to do three or four days work within one day. So I'm pretty happy to hear that. And then, another interesting stat we saw in our survey was that companies that are under 20 million in annual revenue are still managing between 10 and 49 contracts, which is kind of what we saw in the feedback there. And 97% of companies with over a billion in annual revenue are managing over 100 contracts each.

So imagine being a rep and trying to work through that many contracts within a territory, all of which that can change at any time. It's really asking a lot. I think that- Yeah, go ahead, buddy. That whole point of shrinking a territory is so important. I think for anybody that's at an organization that's trying to scale, one of the dilemmas is carving up the United States into manageable territory sizes, and a lot of times in the beginning they're larger than you think. So anything you can do to help the selling organization shrink it down, get their arms around it. It's almost a burden to have too much opportunity. You don't even know where to start. So that's a point that I think has been, at least for us, extremely helpful.

Yeah, exactly right. A lot of these territories are getting bigger too now, right? So they're asking more of them. So yeah, it's a big challenge for sure. All right. Alex, you want to take this sixth slide, kind of talk about- Yeah. Well, I guess we'll hop in the way back machine a little bit to about a year ago. So we sort of painted the picture of jokingly what-- Well, not even jokingly, unfortunately, but what keeps me up at night. And just to, yeah, sort of paint the picture, the selling organization was in the AcuityMD platform already, and we had pretty high adoption on the kind of the new business generation element of it, which is the targeting and the pipeline. So anybody that kind of understands, that's more of that. And it was giving us a really good perspective. We were able to see where deals were slowing up. And what was happening is we were starting to identify in a bit of a basic way, whether or not it was an existing hospital where we had a contract or a new one, and we were able to determine where the pain points were in our pipeline. The whole point was to get stuff moving through that faster.

And we saw very clearly that the contracting stage just were er, everything was kind of grinding to a halt if we had to go and get a new contract. And I sort of mentioned before that part of the other thing that was keeping me up was with these territories, any contracts that were spanning over multiple territories, just spreading that info. So again, more pain, less solutions a year ago. But go on to the next slide. We kind of got to a much better spot.

Oh, I guess, sorry. We'll pause here. Yeah. This slide is addressing and planning to address contract management challenges. So-This is kind of like what companies are thinking about. Like, how do we address this? How do we get our hands around this problem? So is it doing less with more? Is it just throwing more bodies at an outdated process?

Even though these organizations understand that these manual contract methods aren't the best approach, they just don't know a better way to do it. The plan is to address challenges, is throwing more money at a broken process. But just hiring more people to prop it up doesn't really improve the desired outcome of closing more deals through your contracts. You still have a disjointed, manual, time-wasting process that does little to improve visibility into targeted opportunities and increase that contract performance. Kind of like the de facto response to contract management issues has been to hire more people. That's expensive, doesn't solve the root of the problem. Companies that leverage new technology can harness contract intelligence to help sales reps find and close more opportunities faster and maximize the value of the hard-earned contracts. These agreements, we said earlier, take years to negotiate, and these IDNs expect you to have the infrastructure and the intel to drive compliance of those agreements.

So now that I've shed some light on the current complexities of contract management, Alex, I'm going to turn it over to you to discuss more effective ways that you've addressed this with AcuityMD platform. Yeah. And all of those were going through my head. Internally, we were talking about building out a complete kind of customer support function and things like that to do it. And, again, I think a lot that are trying to scale organizations, one of the things that at least drives you nuts a lot of times is if you're scaling a bad process, that inherently is not scalable. So I was trying to look around, and one of the things that I encourage everyone is, don't shoulder all the problems yourself. I was talking with our counterpart at AcuityMD about some of the things we were noticing in our pipeline, and we were fortunate enough to be one of the beta testers or kind of early days testers for what has become the contracts module. And just sort of where it started is, again, for anybody that's used to the AcuityMD platform, the kind of meat and potatoes of it is the new business generation on targeting for new business and understanding where those customers are.

On the side of it's sort of like buying a car. It has all of these nice filters. And what we created was just basically uploaded all of our contracts in and created a filter to turn on contracts on or off and thought that was pretty good. It was putting the information in the right spot. We rolled it out to the reps, and we started to get some kind of interesting feedback.

What they were seeing is hospitals where it had $0 associated with it, but it said it was on contract and really questioning that, and holy mackerel, there's nothing... If your selling organization starts to question the validity of the tool, that tool is on life support. They'll quickly shift to anything else, kind of that joke of using the Apple Notes and things like that. So we regrouped again, and we, as a combined team, came up with just this new filter called Eligible Whitespace, which basically just is a way to say you have an umbrella agreement, and whether that's at the GPO level or an IDN level, and you have facilities that you have no business in, that is earmarked as whitespace. And that just clicked for our reps. They kind of understood the difference between, yeah, I know what an active contract is, like stop talking to me, Alex, or the eligible whitespace is stoked their competitive spirit and what they could chase. So, look, it was, for us, a really good breakthrough to kind of think about the selling process more holistically and think about contracts upfront, and we saw some pretty good improvement in our pipeline and our velocity.

So the kind of trifecta happened where we had the contracts. I sort of mentioned before, our contracts were edging over 250 because we were doing local-level agreements. So we kind of had all of those in one spot, which was good from a hygiene perspective. We understood where they were associated to and were able to provide that direction directly to the selling organization real time, which was great.

And I have to warn you, so in a lot of ways, as a small organization everybody has to wear a lot of hats, but ultimately, it's the revenue side of things that is most important to me. I lead the selling organization for Intellijoint. And so, where the rubber hits the road is on revenue. You can just go to the next slide.

It's really changed how we're approaching that. So thinking about our process, not as just like playbooks or this or that, but like a whole commercial operating model, has been something that has been really helpful, and this was part of the bedrock to do that. So what we're seeing now is our sales team is actually using contracts or the understanding of contracts much earlier in the process. They're able to filter out whether or not on contract, so they're not spinning their wheels. They're really able to sit down with the surgeon upfront as well and prepare them if you have to go to a value analysis, or to go and get their peers to help support a product if it is for a new approval. So what we're doing is setting those expectations earlier and preventing the sort of frustrations that happen of getting all hot and excited about a product that you can't use.

And what we're ending up with is something that I think a lot of selling organizations are questing towards, which is a-A more consultative approach, right? This is the ability to have those conversations early is something that the sales team is really benefiting from.

Look, there's still a lot that we continue to have to do, but at least the kind of roadmap of how we get there is clearer. We're still working on some of the contract hygiene and working on commitments to contracts is something that we now have the information to do. So that's where we're directionally headed, and just making sure things like contract renewals and all of that are much easier for us to act on. And as I sort of mentioned, part of the scaling of an organization is converting local level agreements when you have enough to be able to go and lobby support at an IDN level to get full approval is kind of where we are right now to negotiate what I just kind of will call umbrella contracts. So look, the sales side of me says great. But what we've seen is truly positive results. When we talk about the sales cycle itself, getting through that, we're getting through that three times faster than we were before at our on-contracted facilities. And the reps are able to kind of balance out the opportunities that they're chasing between white space, where we already have an existing contract which they already knew, and then making sure that we're continually chasing and getting approval for new contracts.

So this slide is a little bit out of date, but we've had quite a few deals that by kind of understanding that we've gone from the prospecting stage, so kind of the introduction, through demo, all the way to recognizing revenue in less than two weeks. And that's a dream.

So some of the stuff that, again, is approaching this like an operating model and not just a playbook as well is the more that we can put into one solution. So we're now, the team is always chasing our higher volume users, but we're able to prioritize those that are on contract. So we're a little bit smarter about how we're building our pipeline. We're seeing that the ability to have peer-to-peer referrals, for in our case, orthopedic surgeons across affiliated hospitals, has been fantastic. And the rubber hits the road on a P&L, and the nice thing is we've done all of this, all these benefits, with one FTE. So one individual is now managing all of this. And I'd wager to say that their life is actually a lot easier than it was before managing all of these kind of disparate systems. So it's been good.

That's awesome, Alex. And I noticed something on the previous slide is kind of where you are now and where you're going is sales approach is more consultative, sophisticated, driving stronger relationships and faster decisions. That's really key, right? Is trying to move your whole organization to all kind of row in the same direction is really not easy to do.

And it's the expectation, right? We say all of these sophisticated, all these sort of big words, but really it's the customer's expectation. There's no way as all the pressure's on you as an orthopedic surgeon, you want to have to do somebody else's work. So we're able to kind of prep that, and we just show up really well prepared, which is great. Yeah, exactly right. It's what the customer wants from you.

We had a couple questions come in. Alex, I don't know if you want to maybe field these. These may be good for you to talk about. Oh, yeah. So one is, will you work to get a contract that covers a certain region before putting a rep in that territory?

So I guess it's kind of like, do you cart before the horse or do you look at a territory, try to expand your sales into these organizations and then try to work an IDN agreement up from there, or do you kind of start from the top down? Not exactly. So we set up our sales organization. We're large enough that we want to be able to sort of say that we have coverage across the entirety of the US, and it really splits the team into two. So we have core territories, so that's kind of like your standard territory management, and we have a number of those across the US. But we also have an expansion team, which is looking after large regions to make sure that they're able to cover any of the inbound demands. So we don't necessarily use the contract as the start to warm up the territory. We just have a direct employee that can generate the interest, and then we allow the contracting to come after it. So we still start with interest in mind and then have concentrated effort to try to get as many contracts in place at the IDN level.

Yeah. Makes sense. All right. So Tom, are we going to open up Q&A at this point? Yeah. You guys did such a great job. I figured that was a good one for Alex. Yeah. I don't know. I think my union's going to have to file a grievance against you. This is-... you're taking work away. We have the same agent. This is what I do. The whole reason I'm here is just to ask questions. So, question number one we had, do you have some reps... This is for Alex. Do you have some... Sorry. Do you have some reps... I'm choking now. Do you have some reps focused on selling to contracts and others on landing new contracts? No, we don't.

That's the nice thing is by having the kind of visibility there, we expect everybody, part of being a sales individual is going out and being able to negotiate contracts with admin as well at Intellijoint. So we don't have a specific team. What we do have is one individual that once it gets to an IDN level, this individual manages the final signatures there, and then all of the business reviews afterwards so that we free up our field sales organization to be able to move on. And then all of the important follow-on business reviews happen by a centralized person.

Interesting. All right. Tom M., was that ballroom in Minneapolis? Was that the Lowe's Minneapolis ballroom? It looks very familiar. It's a nice ballroom. Oh, yeah. From your flight. That was that picture there. That's actually Alex on stage at- Oh, okay... a little event. Yeah, that was in Minneapolis in the fall. So yeah, we got a picture of Alex. Let's see Alex. There you go. The whole band. They put me after a coffee break. If you look closely, no one's asleep, but it's only just because-... I had good timing in my slot. So No, you were commanding the room. I love it. Tom, the next question for you, from Eric. "We are a startup with one product. Our competitors have multiple product contracts. What do we do so we don't get blocked by the IDN contracts?" Yeah, that's a tough one, right? Because these small companies are really innovators in the industry. They've got this great product. They're able to reduce infection or bring some value to the IDN system. But a lot of these contracts were in place, and they don't have an opportunity to actually work at the system level to get those contracts from the top down.

So Alex, you can piggyback off this answer, but usually the small ones with innovative products that don't have these IDN contracts, and they're competing against the big guys out there is sell to the local facilities as much as you can, right? And try to get some traction. Try to get some of those physicians on board. If you've got some reps that know those physicians really well is try to get some input from them. Bring that physician to a steering committee or any kind of committee that oversees new product opportunities. And they kind of work to maybe get one-off deals and get some traction, get some expansion.

And then start to build that referral program to other physicians as well. Makes it really strong to have a team of actually physicians and facilities to go up to the IDN committee, that committee, on your behalf, right? So it's like you want them to be on your side to push this product. But if you show clear results, the IDN eventually will be interested in hearing your thoughts. Alex, you got any insights on that? Yeah, you nailed it. I sort of say we had 250 contracts, and they were local level. That wasn't just happenstance. That was sort of part of what would be an early-day strategy for us to do exactly what you said. We were basically getting enough interest at a local level. In that situation, carve-outs and whatnot for unique products are a lot more possible. It feels like your value proposition is heard more at that local level. So if you work on that, you can usually translate that over. And then what we sort of look at in the background is, we want to get to a place of relevance within the IDN, so we kind of look for what our aggregate dollar amount is in comparison to the total opportunity in there. And that then allows us to have an active conversation with the IDN to say, "Hey, look, we're doing X amount of dollars with your network. Can we go and speak to your admin?" And the nice thing is a lot of that contact info for kind of the more senior admin is all housed within the AcuityMD platform as well. So that's sort of...

It's a step-by-step approach to kind of get to an IDN level, and then the next kind of a whole conversation about GPOs after, but... Yeah. And then a lot of the suppliers I talk to, they're trying to figure out, okay, they have an IDN contract in place, and they want to know, okay, what's happening with this IDN? Do they buy? Are they going to be purchasing other health systems, or are they financially strapped where they possibly could be bought by another IDN? So you got to make sure, if you have an IDN acquisition, not only if you have your product in the IDN making the acquisition, that's great because you get the instant expansion. But if you're on the other side of the fence, and you have an IDN contract, and they get bought by another IDN, that could upset the apple cart there as well. So it's good to kind of keep track of those health systems, the financial aspect. Are they aggressive? Will they be making these acquisitions, so you can kind of get ahead of that.

Absolutely. All right. Next question is from Michael. We'll address it to both of you. Alex, you're the visitor, so you can go first. "While the rep works through contracts, parentheses IDNs, how does she have to manage the hospital consignment stock requirements/issues?

Do they shift to customer services? How do IDNs incorporate stock challenges and invoice improvements?" A lot of questions. Well, that's a thorny question. Yeah, I think it's probably a slightly different conversation. And it probably has to do sp- getting into the weeds of the specifics of how you are contracting with these facilities. So, not to get into the nuts and bolts too much, but we-Our inventory is managed at the rep level by identifying what stuff is on consignment from an instrumentation perspective. We've shifted most of our consumables to pre-purchase. That's made it a lot easier.

And I think what I would encourage is, think about not necessarily your contract awareness, which is what we're talking about here, but the actual contracts themselves. Leverage amendments that are referenced within the document so that you can do updates a lot faster for any of the inventory requirements, and then that itself is, within our organization, is managed by customer service to basically keep that. The reps communicate to customer service, they update an amendment on the fly, and it's a really fast process that doesn't even require any approval, and it doesn't require any signatures, I guess, is probably the secret sauce to that.

Want to add to that, Tom? No, I think that's really in Alex's wheelhouse. Okay. He's got more insight on that than I do. Good answer there, buddy. Well then, we'll send one directly your way then. From David, "What's your targeted percentage that your solution adds to COGS or CAC for small versus large device companies?" Is it COGS or C-O-G-S? Do I say COGS?

And do I say CAC or- Yeah, that's direct cost. Okay. Cost of goods sold. Yeah. All right. Yeah. What's your target percentage that your solution adds to COGS or CAC for small versus large device companies? Yeah. So see, the amount of percentage increase sales revenue through our platform through contracts, maybe Alex might have a better percentage or something along those lines, like revenue that you've generated by having clear insights into those contracts at the rep level. You don't have to give a dollar amount. I don't want to give away- Yeah. I don't have a true dollar amount off the top of my head. I can speak in superlatives, though. So, in the delta, sort of painting a picture of two years ago, got on Acuity. Then we worked with for contracts about a year ago, and then, we just closed our fiscal year, and I can say that in the last fiscal year, we had our best month, we had our best quarter, and it was our best year. So, quite a few superlatives in there. This has been instrumental in that. There's a lot of success, has many fingerprints, but a large part of it is just getting our operating model ironed out.