This month's headlines
 

Ernie Douglass winner Ed Boracchia is a lifelong learner. It's no surprise that Ed Boracchia joined IMDA in 1982, four years after the association was founded. He was always a risk-taker, seeking new opportunities and willing to learn. Still is. Five ways to get customers for life. As a selling organization, you have two goals: Find customers, and keep them forever. And, if you're bold, you can add a third one: Get them to brag about you to everyone they meet. Pulsion Medical looks to IMDA to help with ‘2.0 launch.' Having received FDA clearance for its PiCCO2 technology in October 2007, Pulsion Medical is eager to get out the word on its technology. And it's looking for IMDA members to help. Distributor Selling Agreement updated on Web. Among the modifications to IMDA's "Distributor Selling Agreement" are provisions that address certain laws and regulations, such as the Stark Act and the Medicare Anti-Kickback Statute. Next generation. The University of Alabama at Birmingham has put together its medical expertise with its industrial distribution program to offer a program for prospective medical sales reps.

The 2009 Annual Conference will be held June 12-14, 2009, at the historic Francis Marion Hotel in Charleston. Check it out at www.francismarionhotel.com.

Ernie Douglass winner Ed Boracchia is a lifelong learner And IMDA is a good place to learn, he says.

Editor's note: At the June 2008 Annual Conference in Oak Brook, Ill., Ed Boracchia of Boracchia + Associates was honored with the Ernie Douglass Award. The award was established in 1994 in the memory of Ernie Douglass, a founder of IMDA in 1978, and the association's third president. It recognizes a person in the healthcare industry who exhibits support and encouragement of associates, a willingness to share his or her business and distribution knowledge, and professional salesmanship and ethics in business. This month, IMDA Update completes its coverage of the award with a short profile of Ed Boracchia.

It's no surprise that Ed Boracchia joined IMDA in 1982, four years after the association was founded. He was always a risk-taker, seeking new opportunities and willing to learn. "Being flexible and creative -- that's how I've survived," he says today.

Boracchia is from San Rafael, Calif., located in the San Francisco Bay area. He joined the U.S. Marine Corps Reserve in 1967, and received an Honorable Discharge after a car accident. At 19, he went back to school, first to a junior college, then to Sonoma State College (now Sonoma State University). He graduated from the school -- which is located in wine country, about 50 miles north of San Francisco -- with a degree in human resources and management. He did some graduate study, focusing on international business, but elected to go to work before finishing his thesis.

He gravitated to medical sales and marketing for two reasons. First, he wanted to get involved in a fairly recession-proof industry. Second, he wanted to be surrounded by intelligent people. Surgeons -- who thrive on constant change and innovation – fit the bill. He went to work for a Zimmer distributor, which covered northern California. But in 1978, the distributor went out of business. Convinced that he had what it takes to succeed, Boracchia launched his own business and became a distributor for Biomet, which had been founded by a group of engineers the year before.

For the first two years, Boracchia's warehouse was his parents' house in San Rafael. Finally, he got a place of his own. Then, in 1989, he built a 20,000-square-foot facility in Petaluma, about 20 miles north of San Rafael on Highway 101. That's where Boracchia + Associates is located today.

From the beginning, Boracchia has focused on surgical implantables. But the company has expanded to the point that it also provides post-op products, patient insurance billing, even consumer sales. "I've always followed the surgical patient," he says. Boracchia + Associates is a licensed intermediary human tissue bank in the state of California, offering both human allografts and orthobiologic (synthetic) grafts.

IMDA in 1982

It was largely through his association with fellow orthopedic distributor Ron Lawson – a founder of IMDA – that Boracchia got interested in the association. "I'd ask him, ‘How do you do this or that?' and he'd say, ‘Join IMDA.' I didn't think I could afford it." But he attended a meeting in San Antonio and joined.

As an early member of IMDA, Boracchia got to know Ernie Douglass. "He was a very sharing guy," he recalls. "He was a great mentor and coach. He would stand up at the meetings and say, ‘I do this' or ‘I do that.' Many guys who are successful don't want to share." But Douglass wasn't one of them.

"IMDA has been a springboard for opportunities," he says. Through his involvement in the association (he has served as president three times), he has been introduced to new companies, new opportunities and new ideas. "It really changes your mindset," he says. "You find out it's OK to share ideas with competitors, because everyone executes the way they execute, and they build different relationships. To have that bigger perspective has been great. And the people who belong to IMDA are people who want to improve their businesses." Those are the kind of people Boracchia wants to be around. 

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As a selling organization, you have two goals: Find customers, and keep them forever. And, if you're bold, you can add a third one: Get them to brag about you to everyone they meet.

Bold or no, you can achieve all three goals, even in this tough market called medical specialty sales -- GPO contracts, vendor credentialing and all. That was the message that Scott Fanning and Jim Niekamp of 95% Share Marketing presented during their presentation on "How to get customers for a lifetime" at IMDA's recent Annual Conference.

In a spirited presentation, supported by real-life stories as well as movie clips, they made the following points:

1. If you own the relationship, you own your customers for life.
2. The best story always wins.
3. Pound the beaches for your sales reps.
4. Stress fundamentals, fundamentals, fundamentals. And then stress fundamentals.

Even in an era of cost-cutting and transactional relationships, it is still possible to get customers for a lifetime. In fact, vendors that rise above the transactional fray will be the winners. How can they do that? First of all, by understanding the difference between a transactional buyer and a relationship buyer. . .and the much greater value of the latter.

According to marketing expert Paul Wang, a transactional buyer is one who takes great pride in getting the best, rock-bottom price from his or her vendors. Loyalty is not this person's strong suit. Yes, it's true that hospital buyers are driven by the bottom line, according to Fanning and Niekamp. But vendors who approach their customers on this basis can expect nothing more than transactions. In fact, buyers become accomplished at transaction-style exchanges partly because vendors treat them as transactional buyers, by continually lowering their prices in the face of resistance. Vendors who resist the urge stand to be winners. It's relatively simple, but it does call for continual effort.

Citing Wang, Fanning and Niekamp pointed out that most people prefer to be relationship buyers. They prefer to do business with friendly companies with reliable products. They appreciate being recognized, and they appreciate favors. "Even in this transactional era, it's relationships that still will allow you to get customers for a lifetime," they said.

How does a vendor cultivate relationship buyers? Lots of ways, some of them as old as merchandising itself, according to Fanning and Niekamp. Marshall Field had some good advice when he instructed his people to "give the lady what she wants." To further illustrate the point, they asked, "Why does a hotel like the Ritz-Carlton in Chicago -- which is the city's most expensive -- also the one with the highest occupancy?" Answer? "Because they treat their customers special." The first time a guest comes into the Ritz-Carlton bar, he or she must be greeted within 30 seconds. Second time (even if it's a year later), he or she must be greeted by name. Third time, before 30 seconds have elapsed, he or she must have been greeted by name and have his or her favorite drink brought to them – without being asked. "And they don't just inspect," said Fanning. "They inspect the inspectors." The Ritz-Carlton knows its customers will be delighted every time, he said. And the hotel doesn't wish this will happen; it makes sure it does.

Second way to earn a customer for life? "Find a way to say ‘yes' when everybody else says ‘no,'" said Niekamp. "You can always come up with options."

Third way: Make it fun. To illustrate the point, Fanning and Niekamp showed a clip from The Music Man. In the clip, the entire town of River City eagerly awaits the Wells Fargo Wagon. Fanning recalled how he used to spice up his sales calls to doctors when he was a sales rep for Midmark. As Bill Murray says in the movie Groundhog Day, you can plan the perfect day – it just takes a lot of effort. "Can you plan the perfect sales call for your people?" asked Fanning and Niekamp. "You can. It just takes a lot of work."

Fourth way: Show your customer how much he or she means to you. Don't just tell them. How? Fanning told the story of First Union Bank, which developed a program to take care of its top-tier customers. Each of these customers was assigned to one of the bank's vice presidents. Those customers got the VPs' phone numbers (office and home), and the VPs themselves were instructed to never, ever use the word "no" with those customers. "Treat your customers special, and they will tell others about you," said Fanning.

Fifth way: Find ways to show your customer that you care more about his success than you do your own. And make him or her look good in front of the people he or she cares about most -- boss, employees, and family.

See next month's IMDA Update for strategies on how to make your sales reps invincible, from Scott Fanning and Jim Niekamp.

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IMDA members and their principals know that introducing new technology is a push-pull proposition. If you're too far ahead of the curve, you can only push so far. That's when you have to let the market do a little pulling.

So it is with less-invasive hemodynamic monitoring. When Munich, Germany-based Pulsion Medical Systems AG first tried to introduce the technology into the U.S. market in 2001, it met with limited success. At the time, U.S. clinicians weren't as ready to accept the technology as their European counterparts, says Jay Stern, who is senior vice president of sales and marketing for Pulsion Medical Inc., Pulsion's Dallas, Texas-based U.S. subsidiary. So the company pulled out of the States for awhile. Then, in the beginning of 2007, Pulsion undertook what Stern calls its "Pulsion 2.0 launch." "I think the market now is ready for less-invasive hemodynamic monitoring technologies, which improve patient care and outcomes," he says.

Having received FDA clearance for its PiCCO2 technology in October 2007, Pulsion is eager to get out the word on its technology. And it's looking for IMDA members to help. That's the reason it recently joined the association as an allied member.

The technology

Hemodynamic monitoring is a way to monitor and measure the transport function of the cardiovascular system, explains Stern, who joined the company in January 2008 with 20 years of experience in the medical device and pharmaceutical industries. It has to do with the ability of the blood to transport oxygen throughout the body, and the cells' ability to consume that oxygen. It's important, because oxygen deprivation leads to organ damage.

IMDA Announcement Miss the Manufacturers Forum? If you didn't get a chance to personally attend the 2008 Manufacturers Forum in June, visit the IMDA Website to view a list of companies that exhibited. This year's sponsors are also listed. Go to www.imda.org and click on "Members Only".

For years, the gold standard for hemodynamic monitoring has been the Swan-Ganz or pulmonary arterial catheter. The provider inserts the catheter into a large vein (primarily the jugular or sub-clavian), then into the right atrium and right ventricle of the heart, and finally into the pulmonary artery. The catheter comes equipped with a balloon at the tip, which facilitates placement into the pulmonary artery. The balloon, when inflated, causes the catheter to "wedge" in a small pulmonary blood vessel to conduct the monitoring.

Says Stern, the technology may have been the gold standard in years past, but it comes with its share of risks. "There's a high risk that the balloon can rupture, and there's a high risk of infection too. In addition, the pulmonary arterial catheter cannot be used on the pediatric ICU patient, he says. "This makes Pulsion's PiCCO ideal in this setting, among many others in the critical care environment. Clearly, the use of the pulmonary arterial catheter is and has been declining each year and will continue to decrease in the future as less invasive technologies, like PiCCO, are available in the United States," he adds.

With the PICCO2, the clinician inserts a catheter into the femoral artery, brachial artery or axillary artery. This technique is not only less invasive than the pulmonary arterial catheter, says Stern, but it provides much more information on the critical care patient. And, he says, it is clinically superior technology. For example, the Pulsion device can give parameters of various components of cardiac output, including preload (the volume of blood in the four chambers of the heart before it pumps); afterload (pressure the heart must overcome to eject blood); and contractility (specifically, contractility of the left and right ventricles, a measure of cardiac power).

The product's ability to measure volumetric preload – that is, the amount of blood in the four chambers of the heart before it pumps – is key in helping clinicians determine hemodynamic status, says Stern, adding that other technologies measure filling pressure, but not the volume of blood, as does PiCCO. Another key selling point is the fact that the technology offers the unique ability to continuously monitor and measure pulmonary edema (water in the lungs) at the bedside. Traditionally, providers have monitored this by X-ray, says Stern. But that's not as accurate an indicator as the PiCCO2.

"I almost look at our product as a [global positioning system] for the clinician," says Stern. "It helps them recognize, diagnose and monitor the patient. But more important, it helps guide their therapy."

To market

Prior to joining Pulsion, Stern spent four years with Akorn, a specialty pharmaceutical company based in Buffalo Grove, Ill. Prior to that, he worked for eight years for VHA, the Irving, Texas-based hospital alliance and purchasing group.

"Our objective is to launch Pulsion's U.S. business and the PiCCO technology, to increase our installed base, and to help [our distributors] shorten the sales cycle," he says. The company has a group of direct representatives and clinical application specialists (to help manage trials and provide education) in the field, and is seeking specialty distributors to augment its sales efforts.

"Our product clearly is not a commodity," says Stern. "It is changing physician practice and behavior. That's why we need individuals who are capable of talking at a clinical level in the trenches, and who have contacts with critical-care clinicians, to talk about the product and to help those clinicians improve the way they're taking care of patients.

"This is a specialized sale. And the folks we met at the IMDA Annual Conference were very technical and clinical, and business-savvy. They have the relationships with hospitals in their regions. You can't get this unique combination of expertise with mass-market, big distributors."

IMDA members can welcome Jay Stern to the association by calling him at (972) 365-2770 or e-mailing him at stern@pulsion.com.

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IMDA's "Distributor Selling Agreement," a specimen contract for use by both manufacturers and distributors of specialty medical products, has been updated and posted to the IMDA Website. Among the modifications to the document are provisions that address certain laws and regulations, such as the Stark Act and the Medicare Anti-Kickback Statute.

"Basically, we've refined the agreement," says IMDA legal counsel Mitchell Kramer, of Kramer and Kramer LLP, Rydal, Penn. "Every year we learn something new, and we refine the agreement so that it works better." (The agreement was last updated about a year ago. For details, see July 2007 IMDA Update.)

IMDA Announcement Stay in touch. . . with IMDA's listserv. Now it's easier than ever to electronically communicate with your fellow IMDA members. It's called a listserv, and it's up and running now. It replaces the electronic bulletin board. Simply write your message, address it to the IMDA listserv address (found in the "Members Only" section of www.imda.org)  and click "send." All your colleagues will receive the message. Plug into the power of IMDA through IMDA's listserv.

Last September, that "something new" was a $311 million settlement involving five orthopedic device manufacturers, who agreed to pay the federal government a large fine, and to disclose to the feds their financial relationships with their physician customers. The companies were accused of inducing physicians to buy their products by paying the doctors "consulting fees," payment for "continuing medical education programs" and other payments. (Meanwhile, some physicians are under investigation for taking kickbacks in violation of the federal anti-kickback statute.)

Specifically, the new agreement states (in paragraph 16, "Compliance with Law") that "Distributor and Manufacturer agree that they will comply with all governmental laws, regulations and requirements applicable to the duties conducted hereunder and applicable medical devices, including, without limitation, the federal Stark law, federal false claims act, federal anti-kickback statute, federal Health Insurance Portability and Accountability Act provisions, federal civil monetary penalties statute, and similar laws; and will keep accurate records of consigned inventory." In addition, the new agreement calls for both the distributor and manufacturer to warrant that neither they nor their employees or contractors have been sanctioned within the meaning of Social Security Act Section 1128 A.

Another change to the agreement is in the section on "competitive products." Past iterations of the agreement called for the distributor to warrant that it would not sell directly competitive products while the agreement was in place. The new agreement recognizes that manufacturers may add or acquire products that compete with fringe products already being sold by the distributor, and calls for the two parties to allow the distributor to sell such competitive products in those circumstances. "We don't want a merger or acquisition to destroy the relationship between manufacturer and distributor," says Kramer.

The specimen agreement is an attempt to create a win-win relationship between manufacturers of medical devices and their distributors, says Kramer. It is meant to be a form, outline or checklist of a final agreement -- not the agreement itself. It does not take into account the laws of different states, which a final agreement should reflect. For example, states treat non-competition clauses differently from each other – some by statute, some by court-made interpretation, and some by both.

To view the updated Distributor Selling Agreement, go to www.imda.org, and click on "Forms Archive" at the top of the page.

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Editor's note: This article was originally published in Repertoire Magazine, www.repertoiremag.com.

Although she's still in school, University of Alabama at Birmingham senior Amy Musick knows the key to successful medical sales: "The No. 1 thing is to make good relationships," she says. "That's what every single teacher stresses." If she keeps that in mind, she could go places in this business.

Musick is one of the first students to enroll in UAB's Medical Equipment and Supplies Distribution track, part of the school's Marketing and Industrial Distribution program. Although interested primarily in sales, Musick is also receiving training in logistics, anatomy and other healthcare-related disciplines.

The program, launched last Fall, was several years in the making, says Professor Thomas DeCarlo, Ph.D., who is organizing the program. Given UAB's track record in medical care (the UAB School of Medicine) as well as its strong industrial distribution program, "We asked, ‘Wouldn't it be great to put those together to produce a person trained to sell medical equipment and supplies?'"

IMDA Announcement Looking for lines? View a list of all medical devices receiving FDA marketing clearance in June by visiting the FDA Website at: http://www.fda.gov/cdrh/ 510k/sumjun08.html. You might find a company in need of your expertise.

Students in the medical track take many of the same courses as those in the school's industrial distribution program, including supplier relationships, inventory management, customer relationships, and the use of data to better understand customers' buying patterns, says DeCarlo. But in addition, they take courses in allied health sciences, to give them an opportunity to learn anatomy, medical terminology, hospital administration, etc. Students also take courses through the school's newly established Professional Sales Excellence Center. At press time, UAB was in the early stages of forming a relationship with sales-training and sales–consulting firm Miller Heiman, Reno, Nev.

"Business knowledge is part of the training; students will get a complete understanding of reimbursement issues," says DeCarlo, who is the Ben S. Weil Endowed Chair of Industrial Distribution.

"The healthcare industry as a whole has added almost 2 million new jobs in America over the last five years," says DeCarlo. "Employers are crying out for salespeople trained specifically for the medical industry -- everything from disposable hospital supplies to highly technical diagnostic equipment and implantable devices.

"Especially crucial is the need for graduates to have knowledge of the structure of the healthcare industry, medical terminology and medical and healthcare purchasing systems. With the continuing aging of the U.S. population and greater supply of healthcare availability for all Americans, this industry will continue to grow rapidly."

"UAB is the perfect place for this program," Mark Hadley, M.D., was quoted as saying. Hadley is a neurosurgeon and past president of the Congress of Neurological Surgeons, as well as part of the new program's faculty. "UAB brings together key individuals for every aspect -- a business school faculty with strong contacts with industry, tenured clinicians to provide proper training, and a real understanding of government guidelines. To my knowledge there is no other program like it in the country."

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IMDA Update Published by IMDA 5204 Fairmount Ave., Downers Grove, IL 60515 Phone:  (630) 655-9280 (866) IMDA-YES (866-463-2937) Fax: (630) 493-0798 Website:  www.imda.org E-mail:  imda@imda.org   Staff Katie Swartz: Executive Director Judy Keel: Executive Vice President Patti Perillo:  Database & Finance Admin. Mary Moran:  Chief Financial Officer Mark Thill, Editor (847) 255-0716 Laura Thill, Associate Editor (847) 255-4854 Mitchell Kramer, Legal Counsel (800) 451-7466   2008-2009 Directors President Shawn Walker, Bay State Anesthesia (978) 682-6321 President-Elect Kevin Trout, Grandview Medical Resources (412) 914-0950 Secretary/Treasurer Anthony Marmo, Martab Medical (201) 512-1100 Chairman of the Board Dave Campbell, Vital/Med Systems (303) 660-0888 Directors-at-Large Tom Birmingham, Bay State Anesthesia (978) 682-6321 George Howe, Mercury Medical (727) 573-0088 Mack Johnson, Axium Medical Group (910) 454-0299 Bill Schultz, IPV Medical (760) 212-2769 Past-President Ed Boracchia, Boracchia + Associates (707) 765-3100 Manufacturer Representative to Board Rick Pfahl, Bovie Aaron Medical (727) 384-2323 The ideas presented in this newsletter may or may not be applicable to your particular situation.  Always consult your tax advisor, attorney or CPA before putting them into effect.