Supplier and provider organizations
aligned with IMDA were at press time poring over a
document that they hope to submit to the Joint
Commission as the latter continues work on an industry
standard on the vendor credentialing issue. “It’s a slow
process,” says IMDA President Shawn Walker of Bay State
Anesthesia. “But I think the issue [that is, vendor
credentialing] is here to stay. So it’s a matter of how
manageable and how fair we can make it.”
Accordingly, IHAC’s initial thrust has been on vendor credentialing as it affects clinical reps. (Work on non-clinical reps will follow, says Walker, though in fact, the issues of who is a clinical rep and who is a non-clinical rep are intertwined.) Representing IHAC, Walker has been in close touch with the Association of periOperative Registered Nurses (AORN) and AdvaMed as those organizations prepare their own statement on vendor credentialing. The end result, presumably, will be one document submitted to the Joint Commission on behalf of all the organizations mentioned above. IMDA and its fellow IHAC members have long been concerned about the potential costs of vendor credentialing, particularly those imposed by vendor credentialing companies that charge suppliers on a per-hospital or per-IDN basis. But IHAC members’ concerns run deeper than that. Vendor credentialing or vendor management? “One problem is vendor credentialing’s ugly stepsister, vendor management,” says Walker. “The terms are being used interchangeably, but they’re really not the same thing. It’s not just ‘Did you have your [vaccination] shots?’ It’s turning into a management tool. Providers are monitoring who the sales reps saw, where they went and what they’re talking about. And our concern is that this evolution promises to stifle innovation.” Closely related is concern about how information is being collected, how it is being stored, and what will be done with it, continues Walker. “We’re concerned about the bigger issue of privacy and the safety of our information, and making sure that any standard is do-able on a national basis from a legal perspective.” Left unchecked, acute-care customers’ demands could lead to untenable situations for vendors, says Walker. For example, in a number of states, employers are legally prohibited from demanding that their employees get drug tests without probable cause. Yet some customers are demanding that vendors show proof of such testing. “We felt it was problematic to have a standard that reps in companies headquartered in seven states would not be able to adhere to,” she adds. While it’s likely the final document will still call for drug testing, it will reference the difficulty of obtaining such tests in certain states. “While we would have preferred to have the whole thing removed from the document, at least now, we’ll be able to provide some perspective as to why the drug testing issue isn’t so cut and dried,” says Walker. Other concerns IHAC members have shared other concerns with AORN, AdvaMed, AHRMM and the American Association of Critical Care Nurses. As a result, the proposed document ultimately intended for the Joint Commission has undergone some revisions. For example, at press time, the organizations were leaning toward adopting a narrower definition of “clinical rep” as one who is in “the immediate vicinity of patient care.” Says Walker, “a clinical rep is not someone who’s visiting the OR in the middle of the night, or someone visiting the ICU but staying at the desk, or someone who goes into the OR but only to talk to the manager in her office.” In other words, not every sales rep who is in a clinical area should be considered a “clinical rep,” she says. A reclassification could lead to lower fees and less exacting credentialing requirements for reps who had previously been classified as “clinical.” IHAC also suggested that the combined groups back off the requirement that all reps -- even those whose companies don’t stock products -- carry medical product liability insurance. IHAC preferred that the document submitted to the Joint Commission call for reps to carry product liability insurance only if they stock products. Otherwise, they should carry general liability insurance, says Walker. “We weren’t necessarily expecting that all our recommendations would be completely endorsed,” says Walker. “But we wanted to make sure we were in alignment with organizations in the industry with the people and influence to have an impact on what the Joint Commission adopts. The most important thing here is getting visibility and influence in the industry. That’s something that IMDA alone isn’t built for.”
How successful are you in keeping up with the cost of
health insurance for your employees? IMDA members – like
all U.S. businesses – are struggling with that one. Yet
they are doing what they can, according to several
members who responded to a recent “Listserv” question.
By way of perspective, the cost of healthcare to business has increased 140 percent over the past 10 years, according to Tom Daschle, the designated Secretary of Health and Human Services, in his 2008 book called Critical: What We Can Do About the Health-Care Crisis. Since 2000, the cost of premiums for employer-based plans has outpaced wage growth nearly fivefold, he says. Ironically, small-business owners (such as IMDA members) are the hardest hit, says Daschle. Because they lack leverage with insurers, they often end up incurring the highest costs. The results are predictable: The percentage of Americans covered by employer-sponsored plans has dropped from 70 percent in the mid-1970s to 64 percent in 2000 to less than 60 percent in 2006. And those who work in small companies are feeling the brunt. “No wonder small-business employees are one of the fastest-growing segments of the uninsured, and now comprise about one-fifth of the total,” writes Daschle. Caps on expenditures When asked how they are addressing rising healthcare costs, several IMDA members responded that they are sharing the cost of premiums with their employees, sometimes capping their (that is, the business owner’s) contribution. “We contribute a set amount to our employees -- $200 per month – and they choose the program,” says Don Reiter, president, SRC Medical, Northridge, Calif. Plans offered by SRC’s insurer, Blue Cross of California, vary based on a number of factors, such as the employee’s age, number of dependents, amount of deductible, etc. When premiums rise, employees either bear the increase or select a less expensive plan, he says. SRC Medical instituted its current program five years ago. Prior to that, the company had relationships with several insurers, with no standard program. “We had minimal resistance per se,” says Reiter. “But some people had to then consider the cost of the program they were selecting, where they did not before. Additionally, we try to keep our employees informed on the increase in insurance, so they know we are not the bad guys.” St. Louis-based Bell Medical has experienced 10 percent increases in premium costs for several years, says President Kevin Lueders. In response, the company has experimented with a variety of high-deductible and low-deductible plans. “We tried a high deductible, but people did not like it, so now we are at a $500 deductible,” he says. The company currently pays 50 percent of its employees’ premiums, as well as 50 percent of their premiums for disability and dental insurance. “The nice thing about this is that [employees] share in the decisions on coverage,” says Lueders. “We also request from our insurance company that we have a high and low option, so if an employee wants to be more aggressive and bet that they would not use insurance, then they could go with a higher deductible and save money on a monthly basis.” Professional employer organizations Several IMDA members have turned to so-called “professional employer organizations” -- such as Administaff, Extensis, ADP and Gevity -- to help them deal with rising healthcare costs. And while they disagree as to which is the best provider of such services, they agree that PEOs can be a big help for small companies.
Professional employer organizations are firms to which small companies can outsource administrative functions, including payroll, workers’ compensation, hiring and firing, legal assistance as it relates to employee issues, and implementation of health and welfare benefits. In some cases, the professional employer organization and the client (such as an IMDA member) “co-employ” employees. In other words, the PEO not only takes on personnel administration functions, but it also assumes liability for payment of wages and payroll taxes. Regarding health and other welfare benefits, professional employer organizations act like group purchasing organizations in that they use the combined volume of all the companies they represent to get better prices and better coverage than individual companies can on their own. At least that’s what they say. And IMDA members agree. SOTA Medical Products Inc., Cedar Grove, N.J., has used professional employment companies for seven years, including Extensis, Administaff and ADP, says President Keith Lambie. “We have found it necessary to change to a new PEO almost every year, as health insurance rate increases have been substantial,” he says. Still, “[s]hopping a new PEO has helped keep our health insurance costs in line, and we have been able to provide the same benefits to our employees [without] changing or significantly increasing their portion of this expense. “[PEOs] become your HR department, payroll, and you can purchase workers comp at many times better rates,” says Lambie. They will provide employee manuals and, if the client wishes, make certain the company is compliant with rules and regulations in case an employee must be terminated. Lambie speaks freely about disagreements he had with Administaff over unexpected charges and what he says was Administaff’s misrepresentation of the out-of-network benefits of its health insurance program. “The one thing that is important in selecting any PEO is to ask the right questions,” he says. Kevin Trout, president of Grandview Medical Resources Inc. in Bridgeville, Penn., has enjoyed a much better relationship with Administaff since becoming a client soon after attending his first IMDA conference in 2001. “They solved a lot of my employee headaches,” he says. “They provided us with an employee handbook, which we tweaked; they provide us with significant help on recruiting by doing pre-hire background checks; they handle all of our unemployment claims from people we fire; and, much to my surprise, they provided legal representation for us at no charge in a bogus employee lawsuit.” More to the point, “Health insurance is offered at rates significantly lower than what I could get on our own,” says Trout. “Our workers’ comp premiums dropped 40 percent when I signed on with them. At one point last year, we began looking at going it alone without them, comparing costs per service, and we determined it would actually cost us more money to leave them.” Meanwhile, Dave Campbell, president of Centennial, Colo.-based Vital/Med Systems Corp., is another user of professional employer organizations. “We have used Administaff with success in the past, and switched to Gevity a few years ago because the insurance plan was less expensive overall,” he says. IMDA offering? One IMDA member – Candace Keaton of MarCal Medical Inc. in Millersville, Md., questioned whether IMDA could negotiate for a policy on behalf of its members. It has been tried in the past, but unsuccessfully, says IMDA Executive Director Katie Swartz. That said, she is in discussions with a broker about the possibility.
Your hospital customers
may soon notice a drop-off in the number of branded
promotional items – pens, Post-It pads, mini-calculators
– given to them by the manufacturers who call on them.
That’s because AdvaMed, the Washington, D.C.-based
association of medical products manufacturers, has
toughened its Code of Ethics.
The changes, announced in December, are set to become effective July 2009. AdvaMed members that adhere to the revised Code are encouraged to submit to AdvaMed an annual certification to that effect. AdvaMed will publish that information to its Website, so customers can view who’s onboard. The new Code allows sales reps to provide “modest meals” as an “occasional business courtesy in connection with business interaction with [healthcare professionals] that involve the presentation of scientific, educational or business information.” That includes substantive discussion of pricing or other contract terms. But the meals may only be provided to professionals who actually attend the meeting. “No meals for office staff where everyone does not attend,” says the Code. “No ‘dine and dash’ or take-out.” Gifts of modest value are OK, but only if they benefit patients or serve a genuine educational function. No more non-educational, branded promo items, even if they are minimal value, such as pens, mugs, etc. No more scrubs or office supplies either. And no more cookies, wine, flowers, holiday gifts, etc. Among other provisions:
At the request of the IMDA board, IMDA legal counsel
Mitchell Kramer is investigating whether IMDA should
adopt its own Code of Ethics. Expect an update at the
Annual Convention in June in Charleston, S.C.
For years, IMDA members calling on the OR have been
expected to demonstrate their knowledge of OR protocol,
including aseptic technique, HIPAA compliance and
bloodborne-pathogen regulations. Today, with vendor
credentialing companies in the mix, the barriers to
entry in the OR are higher still.
We do, however, need to REFUSE some of the things that
hold us back during tougher economic times. We do need
to REFUSE to suffer mediocrity from ourselves or our
people. We do need to REFUSE to drop our prices but
instead raise the bar on our value. We need to REFUSE to
let our customers get a better experience buying from a
competitor. We need to REFUSE to lose! It is in this
vein that I thought I would lay it out, as I often do,
an acronym that I designed for a recent keynote address
in Phoenix.
‘S’ stands for ‘service’ (plus ONE)
We need to focus strongly now on every touch point that our customers experience when doing (or trying to do) business with our companies. We need to offer a Nordstrom level of experience that gets our customers saying WOW! We need to earn the right for them to come back and continue to show us their loyalty. To get that, we cannot be a little better than our competition; we have to be head and shoulders better! Today, not tomorrow, make an inventory of every customer touch point in your organization. At every one of these points, does the customer feel important? Do they feel loved and appreciated? Do they feel like they matter? Sharpen up EVERY customer experience by paying attention to every customer interaction. Focus on PEOPLE, PROCESS, and POLICY! ‘E’ stands for ‘earn it!’ Remember, unless you actually work for the US Mint, you do not MAKE money! You have to EARN profits, EARN margins and EARN commissions. The work you performed yesterday may not be enough to get you where you want to go today. It may take a little more effort, but it may not require working (that is, selling) harder, but rather working (selling) smarter! Look in the mirror and be truthful with yourself. Today, more than in the past several years, this is absolutely imperative. As our customers and clients face challenges that are causing them problems, ask yourself if you truly ADD VALUE to their lives or simply TAKE from them? (Take their time, take their orders, take their money….) Here’s a question that you may wish to consider: “If you had to sell for 20 percent more tomorrow, what would you do different to earn it? We need to REFUSE to LOSE as we head into 2009. We need to refocus our attention on offering more and better things in the marketplace if we are to continue to survive and grow. Gerry Layo is CEO of Sales Coach International, Granite Bay, Calif., which – through speaking engagements, workshops and extended coaching/consulting engagements – is dedicated to helping companies in the areas of sales, sales leadership and customer service. He conducted two IMDA training seminars in 2008. He may be reached at www.gerrylayo.com.
A federal judge threw out a lawsuit in January against
the manufacturer of a device that most likely led to the
deaths of at least five patients.
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Editor’s
Note: In this month’s issue, Gerry Layo covers the final
three letters of the acronym “REFUSE.” See last month’s
issue for “R,” “E” and “F.”