This month's headlines
 

Vendor credentialing gets industry’s attention. IMDA president Shawn Walker reaches out to provider and supplier organizations, GPOs and others to air the issue publicly. Manufacturer supports IMDA’s vendor-credentialing efforts. Illinois-based small manufacturer expresses support for the leadership IMDA and President Shawn Walker have shown in the vendor-credentialing debate. Your reps are invincible…if you give them the tools they need to succeed. Great sales calls don’t just happen. They are the result of hard work, thorough planning, consistency and motivation. And they are far more likely to occur if your sales reps feel confident, even invincible. And there are many ways to help them feel that way. For Tim Wynne, medical devices are frosting on the cake. After you’ve sold food service equipment to chefs, selling medical devices to surgeons is a piece of cake, says Tim Wynne, president and founder of Surgical Principals. Gregg Alexander’s entrepreneurial itch. The founder of Xelamed is a man who follows his impulses, including starting a specialty distribution company. Paul Marinelli takes a different route to specialty distribution. Founder of Alliance Communications started his healthcare career as a pharmaceutical rep, then founded his own company specializing in marketing, meeting planning and research for Rx companies. 2009 Conference in Charleston in early summer. The last time IMDA held its Annual Conference in Charleston, S.C., a snowstorm spoiled the golf outing. Not likely in 2009.

The 2009 Annual Conference will be held June 14-16, 2009, in Charleston, S.C. Photo: Charleston Convention & Visitors Bureau

Vendor credentialing gets industry’s attention Shawn Walker reaches out to air the issue publicly

IMDA has joined forces with several other supply-chain associations to address the vendor-credentialing issue.

IMDA, along with the Health Industry Distributors Association, Medical Device Manufacturers Association, Healthcare Manufacturers Management Council and Health Industry Representatives Association, have formed the Innovative Healthcare Access Coalition, or IHAC, “to get our parameters for credentialing in front of the shareholders of the major GPOs,” says IMDA President Shawn Walker. IHAC members hope that hospitals and IDNs will take heed of the coalition’s message about the necessity to maintain access to clinical decision-makers.

Walker says IHAC will combine IMDA’s recommendations for credentialing clinical sales reps (that is, those who call on patient-care areas) and HIDA’s recommendations concerning non-clinical sales reps, to formulate a unified message to the entire supply chain.

Busy month

The formation of IHAC capped a busy month for Walker. In August, she participated in teleconferences, conferred with the directors of provider and supplier organizations, and sent letters on the vendor-credentialing issue to a number of publications, associations, group purchasing organizations and others, including the Joint Commission, which is working on industry standards for vendor-credentialing.

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IMDA members can visit the vendor-credentialing page of the IMDA website to view three documents that Walker and IMDA’s vendor-credentialing committee drafted and disseminated: 1) a statement of the issue, 2) suggested attributes of vendor credential organizations, and 3) recommendations regarding vendor-credentialing requirements.

On Aug. 18, Walker and IMDA legal counsel Mitchell Kramer met with legislative aides for Congressman Joe Sestak of Pennsylvania to discuss the issue. Sestak is a member of the healthcare subcommittee of the House of Representative’s Small Business Committee (called the Regulations, Healthcare and Trade subcommittee), the Armed Services Committee and the Education and Labor Committee. “We feel [vendor credentialing] is an issue that the House needs to be aware of, and we don’t think they are,” says Walker.

That said, awareness of the issue does indeed seem to be building. Since sending out her letters, Walker has received responses from many interested parties, including AdvaMed, AORN, Novation, MedAssets, Yankee Alliance (a Premier member), the Health Industry Group Purchasing Association and others. In addition, she has received letters of support from several manufacturers, including Howie Milstein, president, MediStim USA, a manufacturer of cardiac and vascular surgery devices; and Douglas S. Hein, Lincoln Diagnostics Inc. (See below.)

“We have prepared a lot of the tools,” says Walker. “Now we need to rely on our individual members and their manufacturers to go out and use them. It’s not practical to expect everyone to come to our website. Rather, we need to pursue lawmakers, materials managers and others to talk about this issue, because there’s a lack of awareness about it.”

A prickly response

Not all the responses to Walker’s letters were positive. One need only look at VendorMate’s company blog to see that IMDA has touched a nerve in the vendor-credentialing debate. In its “Vendor Compliance” blog, the company – which is a third-party vendor-credentialing organization -- takes exception to IMDA’s argument that no one should pay a third-party vendor-credentialing company to scan the U.S. Office of Inspector General’s database to see whether a sales rep or the supplier for which he or she works has been excluded or sanctioned from participating in federally funded healthcare programs.

Walker has argued that some vendor-credentialing firms claim that the fees they collect from vendors are used to purchase third-party data, but that much of the information they are compiling (including the OIG’s list of excluded vendors) is actually available to the public for free.

The unnamed blogger says that the information may be available for free, but it takes time to collect it. “True, most, if not all, of IMDA’s members won’t appear on any of these lists, just as I expect most, if not all, of the members won’t set off the alarms at airport security,” the blogger writes. “But the screening needs to occur, nonetheless, and it’s not ‘free’ no matter how you do it.”

IMDA’s Dave Campbell responds on the blog: “The writer seems to have the ‘cart before the horse’ with regard to HHS/OIG Alert look-ups as part of vendor credentialing. Certainly a hospital would not want to conduct business with a company on these lists, and supposedly the hospital has done its due diligence, and shouldered its responsibilities in the past, as vendors (one by one) were chosen for a business relationship and added to Accounts Payable.

“For new relationships (which don’t come along in ‘train loads’), once a new product has passed review by hospital committees and the supplier is being vetted for issues such as this, there is merely ONE company to look up, and practically zero expense to do so, since government makes the information available.” 

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Editor’s Note: The following letter was sent to IMDA President Shawn Walker in August.

Dear Ms. Walker:

Today I read with interest your article dated November 2007 regarding vendor credentialing, since our company is increasingly encountering credentialing systems that are cumbersome, costly and inappropriate to our supply relationship with our customers. Obviously, you are well aware of the problems presented by such systems, as you have outlined them in your article.

Lincoln Diagnostics is the leading manufacturer and supplier of disposable allergy skin testing devices in the U.S., and as such, we supply our products to major hospital clinics and teaching institutions throughout the country. We are a small, but important, company in a niche market, and therein lies our difficulty with these credentialing systems, which seem geared to a “one size fits all” approach. In most cases, we simply supply our products with extremely limited or no presence of our personnel at the healthcare facilities.

While we understand healthcare institutions’ needs for qualifying their vendors and controlling representatives’ access to facilities, the rapidly emerging third-party credentialing services do not provide a sound long-term solution. The fact of the matter, which does not appear to have been openly addressed, is that these third-party “solutions” are highly profit-driven exploitations of institutions’ frustration and confusion in attempting to understand and meet current regulatory and liability issues. Healthcare institutions see the third-party suppliers as their saviors, freeing the institutions of their administrative burdens at little or no cost to themselves, and the third parties view the vendors as a deep pool of potential profit, generating multiple streams of income with each registration. The vendors are stuck holding the proverbial bag.

Perhaps large pharmaceutical companies can begrudgingly afford to fund the institutions’ credentialing activities and line third-party pockets with cash. However, the structure as it is emerging does not promote positive relationships between suppliers and health care providers. Furthermore, the cumbersome, time-consuming and costly registrations create a serious challenge for small companies that provide innovative or niche products that are of real benefit to healthcare providers. Eventually, such credentialing systems may drive such companies and products away, depriving healthcare providers of needed diagnostic and treatment options. Additionally, the cost currently being shouldered by suppliers will find its way back to the institutions in the form of increased prices, driving up overall healthcare costs in an already sensitive environment.

I sincerely hope that industry efforts underway, such as yours, are successful in creating an approach that is mutually beneficial to both suppliers and health care providers.

Regards,
Douglas S. Hein
President
Lincoln Diagnostics Inc.
Decatur, Ill.

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Editor’s Note: This is Part 2 of the coverage of the keynote presentation, “How to get customers for a lifetime,” from this year’s Annual Conference, presented by Scott Fanning and Jim Niekamp of 95% Share Marketing. See July IMDA Update for Part 1.

Great sales calls don’t just happen. They are the result of hard work, thorough planning, consistency and motivation. And they are far more likely to occur if your sales reps feel confident, even invincible. And there are many ways to help them feel that way.

The first is to have the best story, says Scott Fanning and Jim Niekamp, 95% Share Marketing, who spoke on “How to get customers for a lifetime” at IMDA’s recent Annual Conference. Domino’s Pizza, for example, never claimed to have the best-tasting pizza in the world. But it did claim to have your pizza in your hands within 30 minutes of the time you ordered it. Similarly, Timex never said it had the best watch, the fanciest watch or the most expensive one. But it did promise a reliable watch: “It takes a licking and it keeps on ticking.” The Domino’s and Timex stories are simple, clear, concise…and powerful.

Likewise, specialty distributors should ask themselves, “What do I do that’s unique and that differentiates me from my competitors?” said Fanning and Niekamp. Find out what that is, then tell the story. And make sure everyone in your company – sales reps, customer service reps, etc. -- knows the story by heart.

Make it fun

Another way to help your reps feel confident is to encourage them to make every sales call fun. Not only will they feel better and lighter as they get up in the morning, but their customers will have the sense that “something good is going to happen today” whenever that sales rep makes an appointment to call on him or her.

Fanning and Niekamp are believers in making their presentations fun, all the while making a point or two. During their presentation at IMDA, they showed a clip from the movie “Sister Act.” In it, Whoopi Goldberg turns around a stale, boring church choir by making its repertoire lively and fun. Naturally, the older nuns think it’s blasphemous. But people flock to the church to listen to the choir and enjoy its music. A real-life example of the same thing is that of Southwest Airlines, which turned an unpleasant experience – flying – into a fun one, and by doing so, attracted business that its competitors couldn’t match.

The lesson? “People flock to people who have fun,” said Niekamp. He quoted the Greek philosopher Plato, who said, “I can learn more about a person in a half hour of play than I can in a year of work.” So why not let your reps have fun with their customers? You and they might have to swallow your pride a bit, and let your creativity run rampant, as it did when you were a kid. But your customers will appreciate it. And they’ll look forward to seeing you and your reps in the future.

Don’t forget the basics

A third way to make your reps invincible is by giving them excellent, thorough training on the basics. To make the point, Fanning told the story of legendary Green Bay Packers coach Vince Lombardi, who said Super Bowls are won by blocking and tackling. Fanning also said that John Wooden -- the former head basketball coach at UCLA who brought his team to 10 NCAA Men’s Basketball Championships -- did three things to succeed: First, he got the best players. Second, he got them to put the welfare of the team before their own. And third, he trained them on the fundamentals.

It is said that when Wooden got a new player, he would spend his first hour with him showing him how the Bruins tied their gym shoes. Likewise, Tiffany & Co., the jeweler, spends hours training its employees how to tie the white bow around their distinctive blue boxes. Rigorous training instills confidence and a feeling of excellence in your own people, and it makes a strong impression in the mind of their customers.

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Pound the beaches

A fourth way to make your reps invincible is to “pound the beaches” for them in advance. To make his point, Fanning told the story of D-Day, that is, the day the Allies invaded France in June 1944. There’s no doubt that the Allied troops approaching landfall in their amphibious vehicles were scared of what was about to happen. But the Allied bombers flying overhead and the guns pounding the beaches from behind them filled them with confidence, so they could face the task ahead. Sales managers can give their reps the same type of confidence by “pounding the beaches” ahead of them, in the form of great educational materials and promotions for them to share with their customers.

Give your reps a reason to keep going back to their customers, advised Fanning and Niekamp. A successful sales rep is like a kid learning how to ride a two-wheeler: She wobbles, falls, gets up, tries again, falls, etc. Finally, she’s able to ride that bike. Likewise, only a small fraction of customers buy on the first call. A slightly bigger percentage say “yes” on the second, more on the third, etc. “So give your people five excuses to go back,” advised Fanning. “Keep attacking. Make them feel invincible.” The sales manager is like Henry V in the Shakespeare play, who implores his men, “Once more unto the breach, dear friends, once more.”

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After you’ve sold food service equipment to chefs, selling medical devices to surgeons is a piece of cake. Almost. That’s because few professionals are more – how to put it politely? – “confident in their abilities” than chefs. Tim Wynne knows, having worked in Procter & Gamble’s food service and lodging division in the 1980s. Today, he is president and founder of Surgical Principals, Tacoma, Wash., one of IMDA’s newest members.

A native of Havre, Mont., Wynne graduated from the University of Montana in Missoula with a degree in business finance. He actually began on a pre-med track, but was talked out of medicine by his uncle, an orthopedic surgeon. “He said medicine was going to change in a way that he didn’t see as being good for physicians,” says Wynne.

His first job out of school was that of financial analyst for Electronic Data Systems, Ross Perot’s company. Although he worked directly with Perot for only a few months, he got a good perspective of him. “He was a normal, astute, hard-working business guy who didn’t seem to have any pretensions.”

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After two years with EDS, he moved to Seattle with Procter & Gamble. Two years later, he was recruited by Bard EMS to sell electrosurgery equipment to physicians and OR managers. Shortly thereafter, Bard sold the division to Birtcher, for whom Wynne worked for a year or so. A year later, he joined Bard’s start-up radiology division, but left when the company experienced some delays in getting critical products to market. But he was still on good terms with Birtcher, and the company offered him the opportunity to distribute its products in the Seattle area. So in 1991, he founded Horizon Medical Technologies. At its peak, the company employed seven sales reps and distributed laparoscopic and electrosurgery products throughout the Mountain states.

While still the owner of Horizon, Wynne co-founded Tucson Medical in Arizona with two associates. In 1999, he sold Horizon to Tucson. But he didn’t remain idle for long. In September 2000, he founded Surgical Principals.

Surgical Principals has 18 sales reps and managers who call on customers throughout the West. The company will soon expand into Oklahoma and Texas. From its 3,000-square-foot facility about 30 minutes south of Seattle, the company focuses on vascular, cardiovascular, general, gynecological and urological surgery. Its product lines are a mix of capital equipment and disposables.

Wynne learned about IMDA about a year and a half ago, and finally decided to join the organization this summer. “It was kind of a delayed, prolonged interest,” he says. He is still exploring all the capabilities of the association, but finds IMDA’s involvement in the vendor credentialing issue to be energizing. “We are going to continue to be challenged in the hospital arena,” he says. Vendor access will be threatened for some time to come. “I certainly think we need a united front.”

Welcome Tim Wynne to IMDA by calling him at (253) 441-6509 or e-mailing him. 

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Gregg Alexander is a man who follows his impulses. That’s one reason he likes being an entrepreneur. “I do what I gotta do when I gotta do it,” he says. It’s how he has always lived his life.

An Air Force brat, Alexander’s growing-up years were spent in a variety of states, including South Carolina, Colorado, Texas and Florida. He was a biology major at the University of Tennessee in Chattanooga. But after two years, he left classes to open up a café off campus with a partner. The Prime Time Café, which served pizza, dorm food and soda fountain drinks, broke even after a year. But after three years of running the business, Alexander was ready for a change. (He would pick up his studies years later, receiving a degree in strategic management in 2006 from Dominican University of California in San Rafael.)

He played baseball (as a catcher) at the semi-pro level for three years, but his career was cut short when he sustained a muscle tear. Pursuing his interest in medicine, he went to nursing school for awhile, then moved to Illinois, where he took a job as an anesthesia tech at Edward Hospital in a western suburb of Chicago.

It was at Edward Hospital that Alexander fell in love. The department sent him to equipment training schools and asked him to help buy anesthesia machines. “I immersed myself in that equipment and what it did,” he says. “I couldn’t get enough of it. It came really easy to me. I fell in love with Draeger anesthesia machines – the quality and the safety aspects.”

He left the hospital in 1993 and went to work as a sales rep for a specialty distributor -- Anesthesia Services -- in Oklahoma City, and then Houston. The following year, Draeger went direct in the territory, and Alexander joined the company as a sales rep. One year later, he took a position with Draeger in San Francisco. He worked for the company four more years, then went to work for Spacelabs, and then Marconi. When Marconi was purchased by Philips in 2001, he lost his job. So he took a position with Smiths Medical, selling its Level 1 blood and fluid warming equipment and disposables, and then its anesthesia disposables and spinal trays. He enjoyed working for the company, which he says was “very well run.” But a merger left him without a job once again.

At that point, he joined Westmed, a Tucson, Ariz.-based manufacturer of anesthesia and respiratory products. (He remained in California.) “That’s where I got a lot of experience with distributors,” he says. “I learned a lot of good stuff from them.” He was one of two trainers for Westmed. “I sunk my teeth into improving some products, and I ended up making a couple of them successful.” But in August 2007, he had another idea – to start his own specialty distribution business.

His company, Xelamed, specializes in anesthesiology, respiratory and the emergency department. Alexander and his wife maintain a house in northern California, and he calls on hospitals in that area. He plans to hire a full-time sales rep for the area soon. But he is building up his business in South Carolina and North Carolina too. His brother-in-law has given him some warehouse space in Inman, S.C. “The No. 1 reason [for the move to South Carolina] is that I get to be with my family, and I get to see my nephews and nieces. I haven’t spent much time with them for years. This was a good chance to get to know them better before they get too much older, and to see if we can do something as a family.”

In addition to northern California and the Carolinas, Xelamed is expanding its presence in the Southeast, and recently brought on two reps in the Atlanta area.

Welcome Gregg Alexander by calling him at (864) 921-4966 or e-mailing him.

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Paul Marinelli has taken a route to specialty distribution that differs from many others in the business. He started his healthcare career as a pharmaceutical rep, then founded his own company specializing in marketing, meeting planning and market research for drug companies. Today, he wants to test the specialty distribution market, and hopes to bring in some product lines from overseas as a master distributor.

A native of Westchester County, N.Y., Marinelli is a Fordham University graduate. His degree was in biology and he had a desire to go to medical school. But the competition was stiff in 1972, as draft-aged men sought to enter medical school to avoid service in Vietnam. Marinelli didn’t make it to med school; instead, he went to work in a hospital lab, where he stayed for a couple of years.

Next, he interviewed for some pharmaceutical sales jobs, and was hired by Hoechst (now sanofi-aventis) to call on doctors, pharmacies, hospitals and nursing homes. He was promoted to field sales management and then to marketing. In 1987 he decided to do something he had always wanted to do – start his own business.

Given his experience selling to doctors, hospitals and others, “I figured I would stay in the industry and create a business that helped medical and pharma companies sell to physicians,” he says. Alliance offers a variety of services to pharmaceutical companies, including meeting planning, pre-marketing services, post-launch services, and key-opinion-leader development.

Now he would like to branch out into medical specialty distribution. “I felt [joining IMDA] would be a good way to get involved, get to know people, network, see if I could get leads or lines,” he says. He has done work in the area of infectious diseases, diabetic ulcer care, stasis ulcers, cardiology and critical care, and he is looking at acting as a master distributor for a line of wound dressings from abroad.

Welcome Paul Marinelli to IMDA by calling him at (732) 302-9100 or e-mailing him. 

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The last time IMDA held its Annual Conference in Charleston, S.C., a snowstorm spoiled the golf outing. That’s because it was held in January 2000, before IMDA changed its conference schedule. Next year, from June 14-16, members will be able to give beautiful Charleston a second chance, at the 2009 Annual Conference and Manufacturers Forum. And they’ll be able to do it in style.

The 2009 Conference will be held at the Francis Marion Hotel, located in the heart of historic Charleston. The hotel is said to have been the largest and grandest in the Carolinas when it opened in 1924. Named for General Francis Marion, the “Swamp Fox” of the American Revolution, the hotel reopened in 1996 after a $12 million restoration, which won an award from the National Trust for Historic Preservation. In fact, the hotel is on the National Trust’s list of “Historic Hotels of America.”

For more information on the Francis Marion Hotel, go to www.francismarionhotel.com.

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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.