IMCO National Convention
Edition: July 2011 - Vol 19 Number 07
“Believe” and “Achieve” were the two key messages IMCO executives delivered to IMCO members at the co-op’s recent national convention in Orlando.
“Clearly we are living in very interesting and challenging times,” said CEO Bill McLaughlin, referring to such things as competitive bidding, group purchasing, accountable care organizations, pedigree, consolidation, the growing national debt, globalization and the rapidly changing costs of labor and material. “The good news is that we are in the medical product and supply business, and people rely on us. With change there is always opportunity.”
One big change announced by McLaughlin was the promotion of Executive Vice President Deb Bullock to president. “Deb has done an excellent job managing the staff and building the long-term-care segment of our business,” he said. McLaughlin said he will remain CEO, and focus on negotiations for the betterment of the group.
Other changes discussed at the convention included:
• More aggressive promotions, rep motivation features and vendor compliance rewards for IMCO’s Winners Circle promotion. Five hundred sales reps participate in Winners Circle, and 10 families won vacations for exemplary performance in the promotion, according to Director of Equipment Development Phil Childrey. What’s more, IMCO went from having eight annual focus vendors and 13 quarterly focus vendors in the 2010 program to a more specialized focus on four vendors per quarter, said Karen D’Arcy, director of marketing services.
• A new marketing vehicle for IMCO private label. IMCO has developed individual member brands that can be purchased in high volumes, allowing the company to negotiate and collectively focus on specific vendors, said McLaughlin. IMCO also developed a separate sales contest to reward members for growing their private brands.
• Introduction of a B-to-B shopping-cart-driven, online catalog and marketing flyer generator. IMCO partner Computer Pundits Corp. has agreed to provide its eCommerce21 software to IMCO members, said D’Arcy. In addition, IMCO’s new AccessIMCO.com site includes the IMCO Design Center, which gives members the tools to create sales flyers and specialty brochures and catalogs.
• Development of a training program with a focus on C-suite selling.
• Strengthening of the company’s lab program for members diversifying into physician-office-lab sales.
Predicting the future
The convention featured a number of educational sessions. For example, Professor Bill Cron of the M.J. Neeley School of Business at Texas Christian University told IMCO members that the danger of predicting the future is that you can get wedded to your prediction, and fail to see what needs to be done today. Yet business owners – and distributors are no exception – must keep focused on the developments that may influence their businesses in the future.
Distributors need to pay attention to the so-called macro environment, that is, what’s going on in government, economy and society at large, said Cron. But they also have to zero in on their segment of the economy. In other words, they need to constantly ask the question, “How are providers making their purchasing decisions? How are those decisions evolving, and what are the implications?”
On a macro level, there’s no doubt that providers have to cut costs, said Cron. The government will be going after Medicare and Medicaid, and that will affect providers…and their suppliers. The economy has an effect as well. “The thing that struck me about the most recent recession was that people were willing to postpone their own healthcare,” he said.
Demographics and social norms will influence healthcare policy – and the supply chain – in the years ahead, predicted Cron. For example, society may take a closer look at the high cost of extraordinary care given at the end of a person’s life. Another societal trend worth watching: The desire by doctors and other healthcare providers to balance work with personal life.
Closer to home, many small distributors that have emphasized the role of personal relationships in selling may have to change their approach if hospital systems and IDNs acquire physician practices, said Cron. “IDNs are saying they’re putting more systems into the buying process. What does it mean when I [as a distributor] am not selling to a sole doctor, but instead, to a group or committee? And how about today’s emphasis on data about outcomes and quality?”
As IDNs acquire physician practices, distributors have to acknowledge that the walls between traditional markets – physician, hospital, long-term-care – may be blurring. “Think of the implications of solo physicians joining small groups, small groups joining larger groups, larger groups joining hospitals in some way, shape or form,” said Cron. “It won’t occur overnight. But it’s like Cirque de Soleil, where you’re swinging from one trapeze to another. You face two potential errors: shifting your weight too late, or letting go too early, before the bar is there. I’m not sure which one is the greater threat.”
The new normal?
Not long ago, people were asking when the recession would end. Today, they’re asking, “Since the recession is officially over, is this something we can count on?” “How long will it last?”
The recovery might not be fast enough for many Americans and business owners, but it is in fact occurring, said Jeff Dietrich of the Institute for Trend Research. Dietrich sees three years of growth ahead, though it will be mild by historic standards. Then in 2014, there’s a chance for a mild recession.
Significant events to watch:
• Worldwide, between 800 million and 1 billion people will move from poverty to middle class in less than 10 years, predicted Dietrich. “They’ll need healthcare, drugs, medical equipment.” What’s more, populations in most of the world (the exceptions being Africa and some parts of South America) are aging; they will demand more healthcare services.
• Energy and food costs could accelerate the rate of inflation faster than what the Federal Reserve (whose calculations exclude food and energy) is predicting. Consumers will be forced to make choices about what they buy.
• The weak U.S. dollar means that U.S. exports will be more attractive to other countries. But it also means imports will cost more.
• Corporate profits are increasing, and companies are likely to start spending the cash they’re accumulating. Similarly, consumers are buying less on credit, and at some point over the next one to two years, will probably start spending the money they’ve been saving.
Medical suppliers will need to pay more attention than ever to government regulations, said Dietrich. “If you can borrow money for your business, now is a good time, because rates are low,” he said. “You can pay it back with inflated dollars in the future.”
Bottom line? “We think there are enormous opportunities for medical equipment and supply companies that are innovative and entrepreneurial,” he said. “Embrace uncertainty, and come to the market with new ideas and energy, like you did when you started your business.”
Linda Rouse O’Neill, vice president of government affairs, Health Industry Distributors Association, reported on some key legislative developments that medical products distributors should be monitoring. They include:
• Competitive bidding. Implementation of Round 2 was delayed, and HIDA has asked the government to study the impact of competitive bidding before proceeding further.
• Prescription pedigreeHIDA is working to extend the injunction on pedigree, which was set to expire June 30.
• Vendor credentialing. HIDA was instrumental in setting up the upcoming Vendor Credentialing Summit, scheduled for July in Chicago.
• Medical device tax, to be levied on sales by medical products manufacturers beginning January 2013. HIDA submitted comments to the Internal Revenue Service, asking, among other things, that kits, packs and trays be exempted.
Other developments HIDA is monitoring – as should distributors – include: funding for community health centers, federal funding for implementation of electronic health records, changes in long-term-care reimbursement, value-based purchasing initiatives and proposed rules for accountable care organizations.
Selling to the lab
It’s true that the physician office lab can be a profit center for the practice and a sales opportunity for the sales rep. Even so, practices should never run a test for money. That’s according to Tim Dumas, TLD Consulting LLC and author of Repertoire’s “Lab Guy” column. The first question the rep should ask the doctor is, “What do you need?” After that, the rep and doctor should figure out volume. How many tests does the office currently run? How many are they sending out? With that information in hand, the rep can help the practice determine whether to add a test to its repertoire.
As most reps have found out, the physician-office-lab sale must target three customers, each with slightly different priorities and concerns.
• The doctor wants to know about the machine’s reliability and affordability, as well as just what it takes to run. He or she wants to know the benefit to the patient, and the reliability of the results. Cost and potential revenue are important considerations as well.
• The office manager’s first concern is cost and ROI. He or she worries about compatibility of the test with the office’s EHR system. How much space does it take up? How difficult or easy is it to run the test and interpret the results?
• The lab tech, usually a nurse, wants to know how easy (or difficult) the test is to operate. “I have a million other things to do,” the nurse is thinking. What are the work flow requirements? How about accuracy and quality control?
Offices already performing waived tests can make the transition to moderately complex ones fairly easily, added Dumas. They will incur additional fees, but the revenue opportunities are larger, he pointed out. What’s more, they should expect to be inspected every couple of years.
Rookie of the Year
It took about 10 months for Bram Colonna to discover what he wasn’t cut out for – sitting at a desk. “I quickly learned that wasn’t for me,” says Colonna, sales rep for Charlotte, N.C.-based Atlantic Medical Solutions. He turned to medical products sales, and it turns out he was pretty good at it. Colonna was the recipient of this year’s Rookie of the Year award for his participation in IMCO’s Winners Circle promotion.
Colonna, who lives in Raleigh, N.C., was born and raised in east Tennessee, Big Orange country (in deference to the University of Tennessee.) He went to college at Appalachian State University in Boone, N.C., and still recalls with pride the 2007 game in which the Mountaineers defeated the University of Michigan Wolverines 34-32. He graduated with an emphasis on finance, banking, risk management and insurance.
The desk job did have its benefits, giving Colonna valuable experience in inside selling. It was his brother-in-law, a medical equipment rep, who steered him to Atlantic. “He told me I should check them out, they were doing pretty good things in the medical distribution industry,” recalls Colonna. He met with Atlantic founder Jim Macholz and got the job in October 2008.
He spent some months inside Atlantic, learning about the products it sells as well as how a medical distributor operates. Then he went out in the field. “I didn’t think it would be easy,” he says of those first months on the job, “but I was pretty baffled by how many doors close before one opens.” Before you get the hang of it, selling can be tough, he says. “But after awhile, you acquire the feeling for what your customers are looking for, and how to approach them. It’s a matter of asking the right questions, trying to bring new things to the table.” And doing the simple things help. “Followup. Don’t wait a week to get back to somebody. Show them you’re willing to work with them.”
The end result? “It’s fun. Every day is different.”
Colonna finds the Winners Circle fun as well. “It’s a nice incentive to work toward.” And he enjoys the camaraderie of competing amongst his peers.
Member grand prize raffle: David Marion, Seneca Medical ($3,000 travel gift certificate).
Vendor grand prize raffle: Ron Begole, Mediaid Inc.
Best-decorated booth: Innovative Healthcare Corp.
Best costume (group): Midland Medical.
Best costume (individual): Canada Medical.
Winners Circle Key Contact Award: Bettye Maples, Seneca Medical.
Winners Circle Rookie of the Year: Bram Colonna,
Atlantic Medical Solutions.
Winners Circle Vendor Rep of the Year: Willa Moats, Willcare Associates.
Winners Circle Vendor of the Year: Smith & Nephew (wound care). (MedPro Associates is rep firm that works with IMCO members.)
Winners Circle Master Sales Reps:
• Teresa McKensie, Bell Medical Services Inc.
• Brian Webber, Manheim Medical Supply.
• Kathy Bradford, Midland Medical Supply.
• Bob Vandergriff, MMS – A Medical Supply Company.
• Brian Butterworth, MMS – A Medical Supply Company.
• Lisa Calliott, MMS – A Medical Supply Company.
• David Marion, Seneca Medical.
• David Ellis, Tarheel Physicians Supply.
Winners Circle Master Sales Managers
• Drew Borske, Midland Medical Supply.
• Matt Wright, Tarheel Physicians Supply.