FirstChoice Cooperative Guest

FIRSTCHOICE COOPERATIVE and FIRSTLINK COOPERATIVE

CODE OF CONDUCT

MARCH 14, 2003 

INTRODUCTION 

FirstChoice Cooperative is a non-profit Purchasing Cooperative that is owned by and operated for the benefit of all its members. Because FirstChoice Cooperative is owned by all its members and focuses solely on supply-chain functions, it is very unique and has no interest apart from reducing overall cost for its members and their customers while maintaining a high quality of products and care.

FirstChoice Cooperative is recognized by the Internal Revenue Service as a 501(c) 3 "cooperative" and has been returning 100% of the "Patronage Dividends" to its members based upon their earned dividends reported to FirstChoice by the manufacturers. All healthcare members are required to report the entire Patronage Dividend as a reduction of cost of products to the Medicare and Medicaid Programs.

FirstChoice Cooperative is committed to fair dealings and unbiased treatment of all its business partners. Our process is very unique compared to the Group Purchasing Industry because our members make all the decisions therefore taking the control into their own hands as to the direction of the Cooperative.

Conflicts of Interest 

Due to the unique FirstChoice Cooperative Process where the members make all the decisions as to  who receives a proposal, analyzes the proposal, and votes on the final ratification reduces if not eliminates the potential for conflicts of interest to occur. The process allows the end users to make the decisions on the FirstChoice Cooperative contract portfolio. Every member has one vote regardless of size.

 Ownership Interests  

No FirstChoice Cooperative officer or employee may own any interest in any company that is currently doing business or seeking to do business with the cooperative. In addition, if the spouse or minor of an officer or employee owns an interest in such a company, the officer or employee must disclose such ownership to the Cooperative Board and explain the circumstances of such ownership. 

 Service on Boards 

No FirstChoice Cooperative officer or employee may serve on the board of directors of any company doing business or seeking to do business without approval by the Cooperative Board.                          

 Directors and Advisory Board Members 

Any member on the Board of Directors or on an Advisory Board will be required to disclose any conflict of interest which he or she may have regarding any matter and will remove themselves from the final process of voting on the issue at hand. 

Industry Practices 

We are committed to the principle of fair competition and to the reduction of cost to every member. We provide an exceptional service to our members and we believe in the member (end user) making the decisions so that we can actually reduce total cost and drive true compliance. We pledge to compete, and negotiate, fairly, ethically and honorably on behalf of all our members and at their direction. We will   comply with all laws and always strive to be recognized as the leaders in our field by constantly looking for ways to improve our process. 

 Vendor Relations 

FirstChoice Cooperative is committed to open, honest dealing with all companies wishing to sell their products or services to our Cooperative. Due to our unique process the members actually vote on the vendors/manufacturers to send Request for Proposals to, thus we recommend that any interested vendor/manufacturer must convince the members to allow them to participate. The FirstChoice Cooperative contracting process is strictly membership driven where all members have the opportunity to vote on the business at hand. We will not ask for, or accept, marketing fees from vendors that are      excessive, which neither exceed three percent nor accept any up-front payments for any reason. We do not and will not except equity in any vendor or offer equity in our Cooperative. Patronage Dividend rebates are distributed back to the members at 100% of what they earned based upon what was reported to FirstChoice by the manufacturers. We do not and will not agree to contracts that "bundle" a  clinical preference item with any other unrelated product unless it is voted in by the members due to the best financial interest of the membership. We make each product category stand on its on financial merit and request all proposals in that manner. We also maintain a clause in all our Coop agreements as to new technology and that we can exercise the option to cancel the agreement if the Cooperative members feel that another manufacturer's product has a distinct advantage to their facilities.

 Sole Source Contracting 

FirstChoice Cooperative was formed in an effort to reduce the actual cost of our entire membership so obviously the aggregation of volume is our principle objective to reduce our cost as compared to the rest of the Group Purchasing Organizations in the country. We are considered very small in total membership to the rest of the GPO industry leaders but due to our total membership compliance we are able to not only compete with the industry leaders but also in several cases provide lower cost to our members due to our unique process. We do provide a competitive bidding process and the bid specifies that it is for a sole agreement.

 Cooperative Contracting Procedures 

Members Needs: The members meet regularly to discuss the needs of the cooperative, review literature and invite vendor presentations. 

Request for Proposal: The members decide which vendors to send the request for proposal to based upon a majority vote of the members. 

Analysis of Proposals: Our members review the proposals, discuss the proposals and make a motion for the members to vote on the best financial proposal. The motion requires a second and then the members either ratify the agreement or ask that we add contingencies to the agreement and ratify the agreement with the contingencies or it is defeated. 

Contract Award: The manufacturer that provides the best overall value and meets the needs of the membership is awarded the agreement. 

Implementation: We work in conjunction with the awarded manufacturer to implement this agreement very promptly. Our goal is to have our members benefit from this awarded agreement as soon as possible so that they can start enjoying the cost savings. We also make member visits in conjunction with our manufactures to speed up the process and help with a possible conversion. 

Evaluation: We constantly review existing agreements at every regular scheduled users meeting to resolve any issues as well as to verify that our agreements are still competitive in the marketplace.  

Monthly Reporting: We distribute monthly to all members a report showing the manufacturer reported sales and Patronage Dividends (rebates) earned by each individual members as well as many other management reports and tools. 

Official Minutes: We distribute at each meeting the minutes for final approval by the membership. The minutes reflect the details of the meeting and the direction of the members in regards to request for proposals, ratification's, etc... 

Compliance Program 

The Cooperative COO who reports directly to the Chairman of the Cooperative will oversee our commitment to these principles and practices. FirstChoice Cooperative contracted manufacturers or   potential manufacturers who have a grievance with FirstChoice Cooperative shall report it to the COO who will follow-up on the grievance.

 Revised: August 29, 2008