2002: Bring It On!

Edition: January 2002 - Vol 10 Number 01
Article#: 1135
Author: Mark Thill

Will the sky be blue in 2002? Or will you? Given the political and economic events of the past couple of months, the future is a little fuzzier than usual. For this month's E-Vent, we asked readers of the Dail-E News e-mail news service to look ahead to 2002. Their responses reveal some questions and a lot of enthusiasm. See for yourself.

What new product or technology (or service) sold by you will have the biggest impact on your customers and your business?
:: Equipment rentals and leasing. Capital is still a little tight in hospitals. (dist)
:: New ''needless'' products, due to regulatory actions. Oncology products, unfortunately due to the increasing demand.
:: Online access to price benchmarking data.
:: Service will have the biggest impact on our customers.
:: New technology to fight foot ulcers.
:: Diagnostic instruments that will have electronic medical records capabilities.
:: Our vision ventilator.
:: Our corporate programs, which guarantee savings to our customers beyond product savings. (mfr/dist)
:: Off site processing centers. Certain or all items that need reprocessing may be done at a for-profit center rather than a hospital facility.
:: The service provided to hospitals that allows for contract and product standardization. (GPO)
:: New product launch will offer detection of kidney disease much earlier than anything else on the market. (mfr)
:: Safety scalpel, because of the OSHA regulations regarding employee and patient safety. (mfr)
:: Bariatric products, because hospitals are becoming more attuned to the needs of their obese patient population.
:: Wellness products and tests.
:: Surgical and non-invasive procedures with new technology applications (i.e., bone transplants, cardiovascular procedures) (provider)
:: Mobile health care. This is an expansion of emergency medical services. (provider)
:: Med/surg supply dispensing cabinets.
:: Direct specialty distribution into the hospitals. There are many new and interesting products that cannot find an outlet through traditional large hospital distributors. (dist)
:: Our new suction liner product (mfr)

What government regulation(s) or other actions will most affect you and your customers?
FDA is starting to slip into their old bad habits. They are taking longer to approve products, and not approving products that are approved everywhere else in the world. (dist)
:: HIPAA [Health Insurance Portability and Accountability Act] might be of most concern. At this point, our client/customer hospitals seem to have met the patient identifiable information goals.
:: The Needle Stick Safety and Prevention Act. (mfr)
:: An outcome on the current enteral feeding pump rental investigation by the DOJ.
:: Medicare and ambulatory blood pressure reimbursement.
:: The decrease in Canadian federal government transfer payments for health care to the provinces will continue to create a situation that forces the provinces to pay a greater portion of the federally regulated health care system. This is forcing the provinces to seek out methods to control health care costs, e.g., by reducing access or by introducing a form of private for-profit health care system.
:: With the DOD hospitals now able to access the VA contracts, this will likely increase some volume.
:: Changes to online security standards could boost or suppress the numbers of physicians who integrate online activities with their daily work routines.
:: Lack of an electronic means of ordering narcotics. The old paper system causes delays for clients. (dist)
:: Reimbursement of molecular testing. This form of testing has the potential to discover previously undiagnosed genetic and physiologic abnormalities or disease ''sub-types.'' (mfr)
:: Federal (and some state and local) government offices mandating that automatic external defibrillators be readily available.
:: OSHA's safety needle legislation, because it will cause offices to re-evaluate the way they do business. The time necessary to identify and document acceptance of the HIPAA directives, guidelines and requirements.(provider)

How will your customers' buying habits change?
:: Increased attention to group contract conversion, and conversion from groups to IDN-direct purchase by some.
:: [Information technology] consulting costs will be scrutinized to ensure a positive return on the engagement. (consulting firm)
:: More ''standardization,'' fewer SKUs.
:: Sudden recognition of the fallacy of price buying relative to the total-delivered-cost buying decision model. Just kidding. It will never happen until our domestic math aptitude closes the gap with rest of the developed world. (dist)
:: I believe we will see more customers negotiating contracts outside of GPO contracts. (mfr)
:: The push for inventory reduction and stockless inventory. Response to this is critical, meaning we must be in a strong inventory position at all times. (mfr)
:: Hospitals must establish protocols for evaluating and deciding to participate in/purchase new technology. (GPO)
:: Online buying of medications and vaccines, plus supplies will increase among our customers [physicians' offices]. Employers' concerns over lost productivity for employees with Internet access will give way to providing access to enhance cost and time savings.
:: Everyone will be trying to stock less- and will expect us to have everything all the time. (dist)
:: As enforcement of the [OSHA safety] regulations is pushed, health care professionals will have to choose between the safety products in the market and the fines that will be levied for failure to comply. (mfr)
:: Our customers want the latest and greatest technology, but don't want to pay any more for their health care insurance premiums. That puts us in a very difficult position, because these technologies are sometimes in the tens of thousands of dollars, and the insurance reimbursement does not cover it. (provider)
:: My customers will be more focused on compliance buying and increasingly trying to minimize ''maverick'' purchasing to reduce the number of active vendors and control costs. (dist)
:: Many will continue to lower the charges of distribution, when they should be looking within to really lower their true acquisition cost, or become a true partner with their distributor, working together to lower costs. (dist)
:: As they become more and more computer literate, they will slowly move toward computer based point-and-click purchasing.
:: Looking to keep on-hand inventory to a bare minimum, placing more of the responsibility on the timely availability and delivery of goods and services. (dist/mfr)

What significant changes might take place in your company in 2002?
:: When we lose an employee, the trend is not to replace them, but to have other people pick up their responsibilities. (mfr)
:: Increased and improved information processing will allow better/quicker access to information for field reps and managers.
:: My company recently experienced a significant reorganization that will dramatically impact the way we address the marketplace. The net result is that we will be focusing on the long-term alternate care market.
:: More team selling with inside sales, which will require open and timely communications to ensure opportunities are followed through to closing.
:: Introduction of more new products.
:: Greater control on expenses -- eliminate unnecessary travel.
:: More emphasis on increasing margin. Will be difficult in a commodity market. (mfr)
:: As a dot-com survivor, I think we will actually turn the corner on recurring revenues and profitability during 2002.
:: We need to focus on training employees better, so we can [give] better customer service.
:: We are hoping for better e-commerce integration and information sharing between all trading partners. This will ensure that everyone is abiding by the right price for the product, and that invoices get paid on a timely basis. (provider)

What significant changes- if any- might take place in the supply chain at large?
:: The large distributors continue to put the squeeze on smaller manufacturers.
:: Market crash and bad economy will help public health care stocks, but not raise profits, and [they] will have to close branches and lay off staff to increase profitability, further slashing customer service levels for frustrated customers. (dist)
:: Continued consolidation of manufacturers and distributors. As an independent specialty distributor/DME provider, I believe we are well positioned short-term to compete against anyone due to the flatness of our corporate structure. (dist)
:: I see the larger distributors getting larger- and the smaller companies disappearing. That will mean more electronic/efficient order processes (EDI).
:: At present, a few national dealers are consolidating their purchasing, which will greatly change my ability to get stocking orders at my local branch. On the other hand, properly timed national promotions and programs will ensure participation on local branch sales meetings.
:: The supply chain will be affected in the acute care market place as more and more integrated health networks and chains of hospitals try to buck group purchasing organizations. This will impact manufacturers, with much more contracting work to be done, and will put a drain on pricing and contracting departments.
:: An increase in the number of hospitals interacting with suppliers, distributors and GPOs via e-commerce. Better data, improved opportunities for standardization and price parity savings may result. (GPO)
:: Supplier needs to reduce SKUs, [which] could hurt manufacturers with limited product lines. (mfr)
:: I think you will see distributors being more loyal to the manufacturers who support them and move away from the ones who sell against them.
:: Reduced competition resulting from the consolidation within the large drug/med-surg wholesalers will provide more opportunity for independent dealers.
:: If any more injectables go on permanent backorder, I will lose my mind.
:: Still looking for an effective and working ordering exchange (i.e., GHX or equivalent) to begin bringing real process value to the industry, but doubt that it will be done in 2002. (dist)
:: Increased use of e-commerce will allow us to be more productive and enable us to make more effective decisions relative to supply chain management -- inventory, pricing, standardization, etc. (provider)

What diseases/disease states (or fear of disease) will most affect you and your customers?
:: :: Nothing, unless you consider increased population a disease.
:: The ultimate disease state of death will become more fearsome, either through war, terrorism, or the most inevitable disease state of them all- aging. (dist)
:: Exposure to bloodborne pathogens. Also, I believe the anthrax/bioterrorism issues will continue to be the primary concern of our customers, and will make it more difficult to see these people. The effective rep will plan for these events and make impactful, pre-planned calls.(mfr)
::Anthrax. Our customers are already concerned with having clean hands, so this could increase sales of our antimicrobial soap and gel products.
:: Any chronic disease is a major concern in our underfunded and inefficient health care system. Trauma and acute care is being addressed, but citizens with chronic conditions are not able to access the hospitals, and home care has not developed enough to handle the numbers involved. (Canadian respondent.)
:: The general concern will increase focus on sterilization and personal protection.
:: Kidney and heart disease/diabetes. Effective screening and disease state management will help the quality of life and decrease overall health care spending. (mfr)
:: The preventative nature of preemptive testing [for chronic disease] will bring out both greater opportunities for dealers and a ''wellness awareness'' in our general population.

What other event/development do you expect to most change the way you do business?
:: The threat of terrorism will affect the way we do business. I have to fly to do my job. It is becoming more difficult to do my job and serve my customers. (mfr)
:: The war is affecting purchases. We are seeing a small war dividend in government business.
:: Bioterrorism will continue to affect how we do business. Access to customers and entry into accounts will become more difficult.
:: Additional time required for security in air travel- less direct time with customers.
:: The rush towards e-commerce has slowed significantly. The issues of who pays for the efficiencies and the inability to establish current baseline costing to obtain a true measure of the efficiencies have not been successfully addressed.
:: International players will have more presence in the United States.
:: New and innovative distribution and IT technologies will impact our clients through a move to bedside scanning to assure quality of patient care and charging of all services.