This month's headlines
 

One number for all? Everybody's talking about it. But then, they've been talking about it for 20 years or more. The topic? A universally accepted numbering system for medical products and providers. Such systems exist in the pharmaceutical and food industries, but not in the medical/surgical market. Vendor credentialing: 'Still a mess.' IMDA Executive Director Katie Swartz has been busy working with vendor-credentialing companies on discounts for IMDA members. And while the discount programs have been welcomed by several IMDA members, others feel the issue hasn't been put to rest. Far from it. IMDA welcomes new members. Health Care Technology and Counter Pulsation are IMDA's newest members. Uniform Commercial Code: Something you should know about before signing contracts. The UCC isn't just legal gibberish. While it might not change the terms of your written contracts, it will flesh out the meaning of the words in them or fill in the blanks when contracts are silent. IMDA legal counsel Mitchell Kramer gives you the details. Get your new reps trained and producing from Day 1. Sales trainer Gerry Layo believes it's imperative to get new reps "into the game" as soon as possible. In Part 2 of his two-part series, he demonstrates that sales managers and CEOs can shorten the "ramp up" time for new reps, and get them producing results right away.

Keystone, Colo., is the site of the 2010 IMDA Annual Conference. Mark your calendar for May 16-18.

One number for all? Industry debates the merits of a universal system to identify products and providers

Everybody's talking about it. But then, they've been talking about it for 20 years or more. The topic? A universally accepted numbering system for medical products and providers. Such systems exist in the pharmaceutical and food industries, but not in the medical/surgical market.

The Food and Drug Administration is taking a look at it, and is expected to unveil some form of "unique device identification," or UDI, system next year. The reason is, unique device identifiers could aid in product recalls and help the FDA monitor adverse events related to medical devices.

Although adoption of a UDI seems as American as apple pie, the issue has become tangled up in politics, PR and marketing, according to an article to be published in the January 2010 edition of Repertoire magazine.

For one thing, two competing systems -- the Health Industry Business Communications Council (HIBCC) and that of GS1 Healthcare US, formerly known as the Uniform Code Council, or UCC -- are presumably vying for the right to be the system for the entire industry. Group purchasing organizations and the materials management association are strongly lobbying on behalf of GS1, while many manufacturers -- many of whom already subscribe to the HIBCC's UPN (Universal Product Number) system -- are content with HIBCC.

IMDA Announcement Looking for lines? View a list of all medical devices receiving FDA marketing clearance in October by visiting the FDA Website. You might find a company in need of your expertise.

To complicate matters, some in the industry believe the HIBCC-vs.-GS1 debate is spurious. They maintain that the industry has already agreed on the components for a universal product number system (e.g., a code for the manufacturer, product, unit of measure, etc.), and that today's computers and scanning technology can easily read and translate both HIBCC and GS1 systems. The bigger issue, they say, is getting bar-code-readable labels on the smallest products, that is, at the unit-of-use. Some believe it's doubtful the FDA will even come down on one side or the other -- that is, in favor of either HIBCC or GS1 Healthcare US.

"What the FDA has said very clearly is, 'We're not in the business of picking the tools or technology needed to [adhere to] our standards,'" Andrew E. Van Ostrand, vice president, policy and research, for the Health Industry Distributors Association, told Repertoire. (HIDA is one of six member organizations with permanent seats on the HIBCC board. The others are the Advanced Medical Technology Association, American Hospital Association, Federation of American Hospitals, Healthcare Distribution Management Association, and the Pharmaceutical Research and Manufacturers Association.) "That's why the FDA has kept up a dialogue with both GS1 and HIBCC."

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IMDA Executive Director Katie Swartz has been busy working with vendor-credentialing companies on discounts for IMDA members. And while the discount programs have been welcomed by several IMDA members, others feel the issue hasn't been put to rest. Far from it.

The first program, with Atlanta, Ga.-based Vendormate, calls for IMDA members to pay one annual fee for access to all 600-plus Vendormate hospitals. As part of the so-called "Vendormate Open Access" plan, IMDA members with just one rep pay $450, while those with five pay $1,800. (Those with six or more need to call the company directly for fee information.) "As the leading credentialing service, Vendormate respects your privacy and never asks for SSNs or driver's licenses," says the company in its description of the plan on IMDA's Website.

A second plan, with Marietta, Ga.-based Status Blue, offers a per-rep registration fee of $70 per year.

At press time, Swartz was in discussions with Eden Prairie, Minn.-based VendorClear regarding a discount program for IMDA members.

While some members were already saving money thanks to the programs, others expressed continued frustration with the whole concept of vendor credentialing.

"I will take advantage of [the discount programs], but only when I am forced to comply in order to gain access to an individual hospital," said one member. "I think credentialing is either a scam to be avoided if at all possible, or just another roadblock being erected by some customers."

"I am still not pleased with how this is all rolling out, and the different requirements are maddening," added another member, whose company just signed with Vendormate. The member cited the IMDA discount as a "small factor" in the decision. A much larger factor was the fact that a major customer had also just signed on with Vendormate.

Calling the discounts "a good step," a third member cautioned, "We need to remember that the whole concept is still out of control. There are not only new requirements coming up from hospitals, there are also new companies springing up. The situation is still a mess."

Editor's Note: Details of the Vendormate and Status Blue plans are available on the IMDA Website, at www.imda.org. For a list of vendor credentialing companies, see June 2009 IMDA Update.

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IMDA welcomes two new members. The first is Health Care Technology, Ashland, Mass., with a focus on vascular access and critical care. The second is Counter Pulsation Inc., a mobile high-tech medical/surgical equipment rental company based in Framingham, Mass. Welcome Health Technology to IMDA by calling Bill Coveney or Steve Sutton at (508) 881-6400. Counter Pulsation's director of administration is Eva Collette, (508) 879-0505 or e-mail.

IMDA Announcement Refer a member and get $50 Every time IMDA gains a member, our collective voice grows louder, our collective wisdom becomes greater, and our collective influence in the market grows. It's good for everyone. And there's no better source for new members than current ones. After all, you know the market, you know the people. That's why IMDA is offering members $50 for every new member who joins as a result of your referral. So when you're walking the floor at your next trade show, or taking a break at your next sales meeting, keep an eye out for companies that might benefit by joining IMDA. Collect business cards and send them to headquarters. Fifty bucks is nice. But the added wisdom, knowledge and camaraderie that a new member brings are even greater payoffs.

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By Mitchell Kramer

I find that most medical distributors' eyes glaze over when they begin reading contracts. They note how long the contract is to last, often missing the sentence buried somewhere in the middle of a paragraph that says that either party may terminate the contract on 60 days notice. They look at the size of the territory, often missing the sentence that states that the territory can be changed by the manufacturer. And in those contracts where the words "Uniform Commercial Code" are used, the distributor mutters "legal gibberish," and continues skimming the document.

IMDA Announcement Door Opener If your reps call on the OR, you know the drill: They have to demonstrate their knowledge of OR protocol, HIPAA, blood borne-pathogen regulations and more. Today, with vendor credentialing in the mix, the barriers to entry into the OR are higher than ever. Help your reps pass through those barriers by enrolling them in online OR training courses from HealthStream. As an IMDA member, you'll receive a discount. Upon completing them, your reps will receive a wallet-sized card provided by AORN and HealthStream. That card is a door-opener. To learn more about the program, visit this URL today: www.healthstream.com/products/sts.htm. To take advantage of the special IMDA discount, go to the "Members Only" portion of the IMDA Website (www.imda.org) and scroll to the box on "Surgical Environment Training."

The Uniform Commercial Code started as a suggested law to govern business practices. Each state has adopted the Uniform Commercial Code into its law, but each state has changed some provisions of it. The purpose of this short article is to acquaint you not so much with what the law says, since that would require an encyclopedia discussing 50 states' laws, but with the fact that there is such a law.

Fleshing out contracts

It should be noted that the Uniform Commercial Code will generally not change the terms of written contracts between merchants. What it may do is flesh out the meaning of the words in the contract or fill in the blanks when the contract is silent. While many of the provisions of the Code deal with banking, letters of credit, warehousing, shipment of goods, investment securities and the like, there are many provisions that deal with contracts, and some dealing with the effects of mergers on the rights of those who have contracted with the acquired company.

The Code deals with how contracts are formed and what constitutes a valid contract. Judicial cases interpreting the Code have often said that even if no written contract exists, an oral contract -- supported by some documentation -- can equal a binding contract. In other words, it is a mistake to believe that a contract can only be a document in writing signed by both parties.

The Code provides that every contract imposes an obligation of good faith in its performance or in its enforcement. But that simple statement requires a volume of explanation about its meaning and under what circumstances it comes into play.

The Code deals with warranties as to the fitness of goods sold, and with warranties that a product is fit for the particular purpose for which it is purchased. The Code says it is legal for a written contract to expressly state that the manufacturer will not warrant its goods. But it also says that the disclaimer of warranty must be conspicuous and in certain sized type. The Code speaks to rejection of goods by the purchaser, how that is done and why it can be done.

The Uniform Commercial Code addresses situations in which one buys a piece of equipment that is financed by the seller. If the product is defective, the buyer can sue the seller because of the defect. But if the seller has a right to sell, and does sell the loan to a valid purchaser, the buyer of the product has no recourse against the new holder of the note if the product is defective.

The Uniform Commercial Code provides the method whereby one that consigns products to another can retain its rights to those products until they are actually paid for or returned. The Code sets out the requirements for and the method of filing a document asserting a security interest in the property. In fact, some manufacturers will, in their distribution contract, provide that they will have a security interest in all products shipped to the distributor and that security interest will stay in effect until the distributor pays for the goods. Once you have the forms and know the mechanics of filing a document listing your security interest in products in your own state, it is a fairly routine procedure to fill out and file this form. Filing could make sense if medical devices are consigned to hospitals or other healthcare facilities. This can be extremely important if the healthcare facility files for bankruptcy.

Every word counts

The contract between a distributor and its manufacturer is often the most important business document a distributor can sign. Many contracts appear to give with one hand and take away with the other. It is crucial that the distributor understand what it is he or she is signing and what is absent from what is being signed.

Too many distributors sign contracts that they have barely read and are amazed that, having spent 20 years building up the business of a manufacturer that has now been sold to a mega company, the contract gives them no rights except the right to be terminated without compensation.

The Uniform Commercial Code is just one of many phrases one encounters in a contract, the implications of which should be understood by distributors. Most manufacturers have lawyers on staff or on call who draft contracts favorable to them. It is important that the distributor read each contract to see if it contains what he or she needs and wants before contacting his own lawyer. But a knowledgeable lawyer should then be contacted to discuss both the negatives and the omissions in contracts that are offered to you, if representation of that manufacturer is or will be important to you.

Frankly, if the relationship is not important enough for you to carefully analyze the contract determining that relationship and then get legal advice, the product is probably not worth investing your time and money in promoting.

The Uniform Commercial Code provisions can be important whenever there are dealings between any merchants. The study of the Code is a full law school course. The purpose of this article is merely to introduce you to its importance and it usefulness.

Mitchell Kramer is IMDA legal counsel. He may be reached at (800) 451-7466 or by e-mailing him.

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Last month, Gerry Layo spoke about the importance of tracking down and recruiting top-performing sales reps. This month he talks about the third component of building a world-class sales organization -- getting your reps trained and producing.

Now that we have brought new talent onto our team, it is imperative that we have a plan to get them "into the game" as soon as possible. We often hear from sales managers and CEOs that the "ramp-up" time for salespeople is six months, one year, or longer. It is the goal of this initiative to make sure that we get those salespeople ramped up and producing results quicker than that.

In order to get this initiative under way, the owner or sales manager must be very clear on the roles and responsibilities of the new hire. What is his job description? What are his main priorities? What are the main areas in which he must be trained in order to get a minimal level of effectiveness? What does a snapshot of "a day in the life" of this person look like 30 days from now?

A good first impression

When you first bring your new rep onto the team, make sure that their first "working" impression of your company is a strong, positive one. Here are a few tips:

1. Instead of waiting to throw going-away parties for those who leave your company, why not have a "welcome aboard" celebration? This does not have to be over the top, but it can very easily convey to the new hire that they are an important part of the team. Have a cake at lunchtime. Have your staff sign a "welcome aboard" card. Have the new rep's business cards waiting for her on her desk, with a working computer, set up with her e-mail address. Heck, maybe even send a bottle of wine or some flowers home to his/her spouse welcoming them into the family too! The stage you set in the first few days is very important.

2. Everyone in the first 30 days with a new company wonders if they made a mistake. Go out of your way to make sure that they know they did not! Help each new sales hire be successful soon after they join you. Get them out on calls with you or your top reps. Let them see client interaction with their own two eyes.

When someone joins your team, they have faith that the product/service will sell and that the customers are happy. By ensuring that they take part in success early, you can move that faith to a belief that the product/service and opportunity is real and ready to be attacked. Then, after you get them involved early and help THEM gain success, you move that belief to a conviction that they are in the right place, selling the right product or service, for/with the right people! DO NOT wait for your new hires to bring themselves down that path at their pace. Help them get the conviction of their purpose in your organization NOW!

3. Everyone deserves to know what is expected of them. That's why it is up to you to clearly explain the performance standards to which the new sales rep will be held. Her job description and role must be clear and concise. Write down and verbally communicate the things for which she will be held accountable. Conversely, the new hire will hold the company accountable to do the things you they say you will do. How will you communicate to her that through this mutual accountability, you will both be working toward her success on your team?

4. Next, you need a very clear vision of what her first 30 days, 60 days, and 90 days will look like. What will be the focus of her training? Will you assign her a mentor or "buddy" from whom she will gain most of her day-to-day knowledge? How much time will be spent building her product knowledge, and what resources does the company provide for this?

What do we want him to be saying during his prospecting efforts? Are scripts (or outlines) written down and available? How much role practice is necessary to get someone to a working acumen on initial phone skills? Will you schedule time for role practice time in the training contract? What type of things will the new hire hear during his prospecting efforts and sales presentation efforts? How are those things typically handled by your top reps? Do you have an "Objection Guide" in writing? Will you schedule time to train and role-practice those things with the new hire? At what point will it be expected that the new rep can "stand on his own two feet" to make a sales presentation? How many presentations will he have to see first? At what point is he expected to close his first sale?

The clearer you can communicate and follow up on this first 30-60-90-day plan, the better. Be prepared to have regular "download" sessions with your new hires. Have a progress review at 30, 60 and 90 days. Test them periodically on their knowledge of your products and services, pricing structures, strategies, competition, etc.

You must realize that simply hiring a salesperson does not guarantee that she knows how to represent your product/service/company. The only way that you can guarantee that is to SHOW them, TRAIN them, TEST them, WATCH them, and REVIEW them regularly. If you are not training you are not gaining!

Decrease the ramp-up time of your new hires dramatically and get them ready to fight the battle for you and your company using the tips and pointers named above. To keep doing what you have been doing and to expect different results is INSANITY!

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. Visit his Website at www.gerrylayo.com or e-mail him.

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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:  Senior Administrator Mary Moran:  Chief Financial Officer Mark Thill, Editor & Communications Director (847) 255-0716 Mitchell Kramer, Legal Counsel (800) 451-7466 Barbara Kramer, Legal Counsel (734) 930-5452 George Ayd, Jr., Insurance Administrator (703) 652-1309         2009-2010 Directors President Kevin Trout, Grandview Medical Resources, Inc. (412) 914-0950 President-Elect Anthony Marmo, Martab Medical (201) 512-1100 Secretary/Treasurer Hal Freehling, Jr., O.E. Meyer Company (419) 609-1633 Chairman of the Board Dave Campbell, PhD, Vital/Med Systems Corporation (303) 660-0888 Directors-at-Large Tom Birmingham, Bay State Anesthesia, Inc. (978) 682-6321 George Howe, Mercury Medical (727) 573-0088 Philip M. Reilly, KOL Bio-Medical Instruments, Inc. (703) 378-8600 Don Reiter, Specialty Respiratory Care, Inc. (818) 717-8807 x19 Bill Schultz, IPV Medical, LLC (760) 212-2769 Past-President Shawn Walker, Bay State Anesthesia, Inc. (978) 682-6321 Manufacturer Representative to Board Tim Beevers, Beevers Manufacturing & Supply (503) 472-9055 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.