1. The National Wound Care Sector Deal
Michael Lynskey
Smith and Nephew Advanced Wound Care
Business Director UK, Ireland and the Nordics

2. 100 1,200 15,000 Who are Smith & Nephew? FTSE100 Shares
Smith & Nephew is a diversified advanced medical technology business that supports healthcare professionals in more than 100 countries to improve the quality of life for their patients.
A constituent of the UK’s FTSE100, our shares are traded in London and New York.
FTSE100
S&N has paid a dividend to shareholders on its Ordinary Shares every year since 1937.
Shares
UK employees across 3 sites, York, Hull, Godmanchester
1,200
We have more than 15,000 employees around the world.
15,000
100

3. Smith & Nephew is a company of pioneers, extending access to advanced medical technologies and enabling better outcomes for patients globally.
We’ve been doing this for over 150 years.
1914
days after the outbreak of WW1, we received an order to provide surgical and field dressing supplies to the French army within 5 months
1856
Thomas James Smith opened a chemist shop in Hull, UK and develops a new method for refining cod liver oil
1896
Horatio Nelson Smith entered into a partnership with his uncle forming TJ Smith & Nephew 50
FROM
1856
S&N established
During WW1, staff grew from 50 to 1,200 TO
1937
we were listed on the London stock exchange
1986
key acquisitions of Richards Medical Company in Memphis, specialists in orthopaedic products and Dyonics, an arthroscopy specialist based in Andover
1,200
1953
we developed a special low-temperature plaster for the Everest climbers on the 1953 expedition. It enabled them to send back their camera films, sealed and airtight! This same research led to the development of important industrial products
1928
we produced an experimental bandage – ElastoplastTM
1995
acquired Acufex Microsurgical Inc, making us a market leader in arthroscopic surgical devices
1999
we were listed on the New York Stock Exchange and in 2001 became a constituent member of the UK FTSE-100 index
2001
Oxinium™, a new material that improves performance and increases the service life of total joint replacement systems, first introduced
15,000+
PRESENT DAY
2013
JOURNEY™ II BCS sets a new standard in knee implant performance, designed to restore more normal motion
2011
PICO™, the first pocket-sized, single-use system, revolutionizes the negative pressure wound therapy market
Over
100
We are proud of what we do and value our 15,000 employees who make this possible
We have been pioneering health solutions since and now have a presence in over 100 countries
TODAY
Smith & Nephew supports healthcare professionals in their daily efforts to improve the lives of their patients.
™Trademark of Smith & Nephew ©2015 Smith & Nephew
64549

4. Growing Burden Of Wounds
The burden of wound care is comparable to other major long-term conditions & its growing
The True Cost of Wound Care
Annual NHS spend in £billions1
Ashma
£1.8
Alcohol
£3.5bn
Dementia
£4.3bn
Obesity
£5.1bn
Wound Care
£5.3bn
Cancer
£5.6bn
Diabetes
£10bn
Needs redone in different colours
Burden of wound care falls disproportionately on the frail elderly and those with multiple co-morbidities
1. Data based on review of published data; data and references available on file. NHS spend data non adjusted for co-morbidities. Data correct as of March © Entec Health March 2016 4

5. Growing Burden Of Wounds
Burden of wound care falls disproportionately on community providers
NHS
‘Typical’ CCG
Estimated number of pts w/ a wound
2.2M
11,200
Community nurse visits pa
10.9M
54,600
Practice nurse visits pa
18.5M
93,400
GP visits pa
7.7M
38,700
O/P admissions pa
3.5M
17,400
Drug prescriptions
9.7M
490,000
Dressings/bandages
335M
1.8M
Increasing incidence due to demographics & co-morbidities
Falling number of nursing recruits, increasing retirement, Brexit pressures.
Practice/Community Nursing 5

6. So how are we all doing with wound treatment?
Our patients and customers are not winning in wounds…
No more wounds are healing than 10 years ago
Why is it so difficult to improve outcomes?
Why is it so difficult to improve outcomes?
The problem is getting worse…
PRACTICE
A decade that has seen
NPWT
Silver & antimicrobials
Bioactives & tissue replacements
Significant investments
Multiple $bn industry investment
Higher product costs
Global Market has grown from $4.5bn in 2008 to $8.4bn in 2018 (nearly doubled in 10 years)
+9.8%
Increase in patients with a wound by 2019
1 in 5
Patients with chronic wound readmitted within 30 days
2-3x
Longer hospital stays
PATIENT
WOUND
More products for wounds ‘alone’ is not the answer
Patients, providers and payers are looking to industry for a solution to improve outcomes
A future approach must take the whole patient management system into account
*Vowden et al.; †Drew et al.; ^Ousey et al.

7. Improving Outcomes And Releasing Resources
The three drivers to improving clinical outcomes and releasing resources
Reducing healing time: Early intervention to expedite healing could prevent wounds becoming long-duration static wounds.
Reducing the frequency of dressing changes for some or all patients could result in a reduction in nursing resources.
Complications such as wound infection. Reducing wound complications has the potential to free up nursing time and other resources.

8. care Care Care Care Care Care Care Care Care Care care care care care

9. Care Care Care Care Care Care Care Care Care Care Care Care Care Care

10. The Wound Sector Deal Industrial Strategy – the Grand Challenges ABHI
The NHS 5yr Forward Plan
The National Wound Care Strategy Programme
Industry Partners Dept of Health
Get It Right First Time (GIRFT) directive Office of Life Sciences
AHSNs NIHR NOCRI
Health Tech Partnerships 10

11. The Wound Care Sector Deal
Addressing practice variation in wound care to drive improved outcomes & efficiency
Wounds are an ‘unrecognized’ and ‘un-prioritized’ as a long term condition
Associated with significant prescription costs, hospitalisations, and burden on community nursing
66% of community nurse time is spend ‘managing wounds’.
Total cost to NHS is comparable to obesity and cancer
Growing burden of wounds
Majority of pt. contacts are through non-specialist providers, typically community nursing
Lack of standardised pathways and protocols for front line nurses = practice variation
Sub-standard knowledge on treatment optimisation due to wound care complexity = practice variation
High staff attrition creates inconsistencies = practice variation
What’s driving excess costs and morbidity?
Reduce practice variation to deliver optimal outcomes and improve efficiency
Harness digital solutions to provide CLINICAL DECISION TOOLS to improve practice consistency
Harness data generated by digital solutions for further R&D and big- data analysis for continuous improvement
Support innovation with “Outcomes Based” Commercial Contracts
Sector Deal Potential 11

12. Inhealthcare platform

13. Application screenshots

14. Nursing hours released Clinical decision making
Benefits Of ‘Digital Standardised Care Pathway’ For Community Setting
Wound healing Providers can evaluate healing trajectories and proportion of stalled wounds on caseload. Data can be used to drive decision making and enable earlier intervention of products such as PICO.
Nursing hours released
Application integrates with system one, allowing clinicians to spend more time with patients and less time on administration.
Reduced costs
Application helps to ensure product selection is appropriate, reducing waste and optimizing clinical outcomes.
Clinical decision making
Assessments are complete and used to empower dressing and treatment selection. Eases access to referrals and helps senior clinicians identify patients requiring escalation. Major benefits to new and junior nursing who often find decision making hard.
Fewer visits
Algorithm facilitates right product, right patient, right time to give the right decision and naturally reduce nurse burden.
Use of the most effective products and pathways means even progressing wounds can realise a significant resource saving.

15. Potential Impact On National Health Resources – NHS England
Current practice
Proposal
Difference
Estimated volume of dressings (1 yr)
24.4m
15.5m
-8,923,897
Estimated number of nursing hours (1 yr)
12,645,758
6,078 FTE
8,035,080
3,864 FTE
-4,610,677
-2,214 FTE
Estimated weekly hard to heal wound caseload
15,540
8,228
-7,312
Costs of dressings per year
£ 173m
£132m
-£40m
Proposed spend underwritten by Industry through financial risk share contract
Potential to release 4.6m nursing hours across England, freeing up 2200 nurses (FTEs) needed to treat growing demand within current capacity

16. Smith and Nephew has committed to..
1. Free of charge’ digital tool to be used at the point of care to drive new model of care, increase outcomes and support AI/Big Data through evidence generation
2. Partner with regional based AHSNs to identify and validate ‘pilot’ sites
3. Directly fund validation projects at the AHSN regional ‘cluster’ sites – up to 3 sites initially
4. Collaborative approach between AHSNs and identified Trusts/CCGs/ Tissue Viability services to create project teams to assess success
5. Financial agreements with payers to ‘cap’ spend or risk share on costs during year 1 validation of outcomes phase, Outcomes Based Contracts

17. “It is our responsibility to ensure that every patient in the UK and Ireland should have the best wound care possible”