Blog · Forecast and pipeline · Healthcare and med-tech
The complete tier gap and utilisation calculation on three health system agreements, small enough to check by hand: each agreement's tier thresholds and the tier the customer is priced on, the trailing year's volume from the invoice lines, the tier that volume earns, the price difference per unit between the two tiers times the volume, contracted categories against categories actually bought, the agreement inside its renegotiation window with no activity, and the identity that revenue under agreements plus off-agreement equals the ledger, so a reader can reproduce every figure and then run it on their own agreement register.
Tier earned against tier on is a threshold lookup and a multiplication, and on three agreements it can be done by hand with the utilisation and the window. This page works the tiers, the gap, utilisation, the renegotiation window and the identity.
| Agreement | Customer | Type | Tier thresholds, annual units | Tier on | Price per unit by tier | Categories contracted | End date | Window | Activity in window |
|---|---|---|---|---|---|---|---|---|---|
| AG-1 | System S-1 | System | T1 ≥ 100,000; T2 50,000 to 99,999; T3 < 50,000 | T2 | T1 $38; T2 $40; T3 $43 | 12 | 30 Jun 2027 | 12 months: from 1 Jul 2026 | None |
| AG-2 | GPO G-3 | GPO | T1 ≥ 200,000; T2 < 200,000 | T1 | T1 $36; T2 $38 | 11 | 31 Mar 2027 | 9 months: from 1 Jul 2026 | Yes: meeting 4 Sep |
| AG-3 | System S-7 | System | T1 ≥ 30,000; T2 < 30,000 | T2 | T1 $39; T2 $41 | 8 | 31 Dec 2027 | 12 months: from 1 Jan 2027 | Not yet in window |
From invoice lines, trailing twelve months, on the contracted categories:
| Agreement | Volume | Tier earned | Tier on | Gap |
|---|---|---|---|---|
| AG-1 | 90,000 → 112,000 this year | T1 | T2 | Customer overpaying |
| AG-2 | 180,000 | T2 | T1 | Customer underpaying |
| AG-3 | 27,000 | T2 | T2 | None |
Gap = (price on tier on − price on tier earned) × volume
| Agreement | Per unit | Volume | Annual |
|---|---|---|---|
| AG-1 | 40 − 38 = $2 overpaid | 112,000 | $224,000 the customer will raise |
| AG-2 | 36 − 38 = −$2 underpaid | 180,000 | $360,000 the supplier is giving away against its own tiers |
| Agreement | Contracted categories | Categories bought | Utilisation | Revenue |
|---|---|---|---|---|
| AG-1 | 12 | 4 | 33% | $4.1m |
| AG-2 | 11 | 10 | 91% | $6.5m |
| AG-3 | 8 | 7 | 88% | $1.1m |
| Agreement | In window? | Activity | List |
|---|---|---|---|
| AG-1 | Yes, since 1 Jul | None | Renegotiate now: tier gap against the supplier, four of twelve categories |
| AG-2 | Yes | Meeting 4 Sep | In progress; the tier question is the supplier's to raise or not |
| AG-3 | From 1 Jan | Calendar |
Ledger revenue on the facilities under these three agreements and on unmapped facilities: $12.4m.
Σ agreements = 4.1 + 6.5 + 1.1 = $11.7m; off-agreement = $0.7m; total = $12.4m. Holds.
The $0.7m off-agreement is two facilities buying at list with no mapping, listed.
Tier on read as the tier. AG-1's system raises $224,000 at the table and the supplier learns it there.
Utilisation not computed. AG-1 renegotiated as a twelve-category agreement; eight of them are theoretical.
Activity not logged against the agreement. AG-1's account manager may have met the system; the register cannot say.
Off-agreement dropped. $0.7m of list-price revenue nobody owns.
The same threshold lookup, gap, utilisation and window per agreement, every month. Covirage runs it on the agreement register, the invoice lines and the activities. The agreement expiry calendar guide covers the measure, and the price compliance guide covers the tier errors that show up on invoice lines first.
The one the volume earns. A customer priced at tier two on tier one's volume knows it, or its supply chain team will find it, and the renegotiation starts there. A customer on a better tier than it earns is a conversation the supplier chooses whether to have.
Contracted categories with purchases over contracted categories. An agreement covering twelve categories where the facilities buy four is renegotiated on four; the other eight are a compliance question or a scope to drop, and the shape of the next agreement.
Because revenue on a facility mapped to no agreement, or to an expired one, is a finding: purchases at list, or an agreement running on without a signature. The three agreements' revenue plus off-agreement equals the ledger, and the off-agreement figure is listed.