This month's headlines
 

Is it time for a makeover? Bringing innovative technologies to hospitals will always be the mainstay of specialty sales and marketing organizations. But as providers become more cost-conscious, IMDA members might consider converting their skills and expertise into new, marketable programs for their customers. Find out how at this year's Annual Conference. IMDA members encouraged to write to Congress. In early January, as Congress continued a heated debate on healthcare reform, IMDA Government Affairs Liaison Phil Reilly of Kol Bio Medical Instruments and IMDA Executive Director Katie Swartz urged IMDA members to write to their representatives in the Senate and House about a provision in the bill that would impose a tax on medical device makers. Sarnova acquires CVC. Richard Manley wasn't hunting for a buyer in recent months. His company, CVC had no broker, and it was enjoying a string of three or four of its strongest years since Manley acquired it in 1993. But when Lincolnshire, Ill.-based Sarnova Inc. -- owner of Bound Tree Medical and Tri-anim Health Services -- approached him regarding a sale, the move made sense.

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

Teledyne Analytical Instruments is looking for you! Vasu Narasimhan, director, life sciences business development/regulatory affairs for Teledyne Analytical Instruments, is seeking a few good medical device distributors. Actually, he's seeking distribution throughout the United States for the company's oxygen sensors, analyzers and monitors. His company is IMDA's newest allied member.

Third vendor credentialing firm offers IMDA discount. VendorClear has joined Vendormate and Status Blue as the third vendor credentialing firm to offer discount rates to IMDA members. The Eden Prairie, Minn.-based company has reduced its current retail rate of $129 per person per year to $85 per person per year.
 

Annual Conference Is it time for a makeover?

Bringing innovative technologies to hospitals will always be the mainstay of specialty sales and marketing organizations. But as providers become more cost-conscious than ever, IMDA members might consider converting their skills and expertise into new, marketable programs for their customers. Perhaps it's acting as a master distributor, providing logistics services to manufacturers, or pursuing a new customer base.

Whatever you may be thinking now, chances are you'll get some fresh insights after attending the IMDA Annual Conference, May 16-18, in Keystone, Colo. That's because IMDA friend and sales consultant Gerry Layo will offer his ideas -- and solicit yours -- on "reinventing your business" in a dynamic keynote presentation. Following the keynote, Layo will lead an interactive discussion on the topic among IMDA members.

"Tough times always create opportunities for those who look," says IMDA President Kevin Trout of Grandview Medical Resources. "Gerry Layo can help all of us do just that."

IMDA members will recall Layo's presentation on "Building a world-class organization" at the 2007 Annual Conference in Coeur d'Alene, Idaho. Many IMDA members participated in his "Smart Selling" seminars in January 2008, developed specially for IMDA member companies. And all members have enjoyed his periodic articles in the pages of this newsletter.

Layo began his career more than 20 years ago in a business-to-business sales capacity. He has co-founded and run three companies, and served as vice president of sales and marketing for ITEX, Bellevue, Wash., a marketplace for cashless business transactions. His current company, Granite Bay, Calif.-based Sales Coach International, helps executives in the areas of sales, sales leadership and customer service.

Located about 90 minutes from Denver International Airport, the Keystone Resort occupies more than 3,000 acres spread across three mountain peaks in Colorado's Rocky Mountains. In addition to a variety of outdoors activities, the Resort is home to AAA 4 Diamond, Wine Spectator and Zagat Survey-rated restaurants. One restaurant, the Alpenglow Stube, is only reached by taking a gondola to the top of the North Peak at 11,444 feet. The Keystone Lodge contains a 10,000-square-foot luxury spa.

Annual Conference topics

At press time, IMDA Executive Director Katie Swartz was working with manufacturers of innovative medical technology to exhibit their products and talk about business opportunities at IMDA's Annual Manufacturers Forum. Other topics being considered for the Conference include:

• Learning CFOspeak. Healthcare CFOs have a lot on their mind, and it's easy for them to "miss the boat" on the potential benefits of new medical technologies. How can IMDA members capture the CFO's attention? Can they enlist their clinical customers to do the same?
   
• Sharing best practices. Put a bunch of IMDA members together in one room, and chances are, you've got experts on a wide variety of business challenges. Tap into that collective expertise in this stimulating session, in which members share their business problems. . .and offer constructive solutions.
   
• Inventory management. It may not be the most glamorous aspect of your business, but efficient ordering, warehousing and delivery of products can make the difference in your bottom line. Share ideas about processes that have worked -- and haven't worked -- in your shop. Listen to others as they share their stories.
   
• Finding innovative manufacturers. IMDA members differentiate themselves from the box-movers by the technologies they carry. Where can you go to find the movers and shakers of new technologies? How can you position yourself as their "go-to-market" partner? Share your thoughts with an industry veteran who knows what new-technology companies are thinking.
   
• Approaching GPOs. Group purchasing organizations are expected to deliver rock-bottom pricing to hospitals. But these days, even GPOs know they have to bring more to the table. How can IMDA members show GPOs that specialty sales and marketing organizations can be their potential partners in helping hospitals improve cost and quality of care?

Tentative schedule

At press time, the tentative conference schedule looked like this:

Sunday, May 16

• 9 a.m.: IMDA golf tournament.
• 4 p.m.: Opening session. Attendee introductions, manufacturer introductions, and sharing of the important business issues they are seeking to address.
• 5 to 7 p.m.: Manufacturers Forum and Welcome Reception.

Monday, May 17

• 7 a.m.: Continental breakfast.
• 8 to 10 a.m.: Keynote presentation.
• 12 to 2 p.m.: Manufacturers Forum.
• 2 to 3:30 p.m. General session: Followup on morning session.
• 3:45 to 5:15 p.m.: Breakout sessions.
• 6 to 7:30 p.m.: Manufacturers Forum
• 7:30 to 10 p.m.: Awards Dinner.

Tuesday, May 18

• 7:30 to 8:30 a.m.: Continental breakfast/Annual business meeting.
• 8:30 to 10 a.m.: Breakout sessions.
• 10:15 to 12: Closing session.

Watch IMDA Update for more developments.

Return to top

Editor's Note: In early January, as Congress continued a heated debate on healthcare reform, IMDA Government Affairs Liaison Phil Reilly of Kol Bio Medical Instruments and IMDA Executive Director Katie Swartz urged IMDA members to write to their representatives in the Senate and House about a provision in the bill that would impose a tax on medical device makers. Here is the e-mail Swartz sent to IMDA members:

As the House and Senate hammer out a healthcare reform bill, IMDA members should keep their eyes out for one important provision -- the proposed tax on medical devices. And you might consider writing your Senator, Congressman or Congresswoman a letter about it, particularly if that person is a Democrat (as most if not all Republicans will vote against any bill that comes up for a vote).

As you may know, there are two versions of the healthcare reform bill. The first is that of the House (H.R. 3962), and the second is that of the Senate (H.R. 3950). Both bills call for the tax on medical devices, amounting to an estimated $20 billion over 10 years. But of the two, the Senate version appears to be more favorable to IMDA members.

That's because the Senate bill calls for the tax to be collected from manufacturers, while the House bill calls for the tax to be collected at the point of sale. In the House bill, then, the distributor would be taxed for its sales to providers.

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

Further, the Senate bill exempts Class I and some Class II devices (that is, those that present the least potential for harm to a patient), while the House bill calls for a tax on Class I, Class II and Class III devices.

There is one more consideration IMDA members might want to address in their correspondence with their lawmakers. As we write this, there is discussion about exempting small medical device businesses from paying the tax. But the definition of "small medical device businesses" is far from resolved. Some have talked about exempting companies with sales under $100 million, while the Senate bill would only exempt companies with sales under $5 million.

All things considered, in the opinion of the IMDA board, IMDA members would be better served by the Senate version, because it would levy the medical device tax on manufacturers instead of on any company (including distributors) at the point of sale.

Return to top

Most well-run businesses with value will, at some point, probably be sold, says Richard Manley, co-owner and president of IMDA member CVC Inc., Arlington, Texas. Indeed, Manley figured that at some point, he would sell his company -- a specialty supplier of EMS and critical-care products -- either to an executive within the organization or an outside firm. "This was never a family-run business," he says. "There was never a plan to turn it over to the kids."

That said, Manley wasn't hunting for a buyer in recent months. The company had no broker, and it was enjoying a string of three or four of its strongest years since Manley acquired it in 1993. But when Lincolnshire, Ill.-based Sarnova Inc. -- owner of Bound Tree Medical and Tri-anim Health Services -- approached him some time ago, the move made sense.

Backed by Chicago-based Water Street Healthcare Partners, a private equity firm, Sarnova merged Sylmar, Calif.-based Tri-anim (a specialty distributor of acute care, surgical and EMS products) with Dublin, Ohio-based Bound Tree (a supplier of EMS equipment and supplies) in June 2008. It acquired former IMDA member Metropolitan Medical from co-owner Don Morley in November 2009.

Its acquisition of CVC strengthens Sarnova's presence in the Southwest and gives it access to some product lines it did not carry. "CVC's experienced sales force and strong presence in its ten-state market enhances our clinical expertise and deepens our customer relationships in the Southwest," said Sarnova Executive Vice President of Corporate Development Greg Robitaille, in a statement at the time of the acquisition.

For now, it will be business as usual at CVC, says Manley. COO Bruce Cheatham and Sales Manager Chris Hiltpold will stay onboard, as will CVC's salesforce. (Executive Vice President Jack Burgess will retire this summer.) What's more, Sarnova intends to expand its warehouse capacity in the Dallas/Fort Worth area, and has already opened up an EMS warehouse close to CVC's facility.

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."

Manley will stay with Sarnova in Texas, where he will help shape its strategic direction and its role as a specialty distributor. "We want to focus on having a group of unique and technologically advanced products, around which all our other products will be bundled," he says.

"I always told myself that as long as I was dealing from a position of strength, I might sell the company, so long as three conditions were met: First, it was the right deal -- and that's not just price. Second, it had to be good for my people, and this is. Third (and this was optional), it offered me an opportunity to do something with an organization that afforded me a new challenge. And this option did in fact present itself."

Meanwhile, the challenges facing independent specialty distributors are the same as those facing them when IMDA was founded, says Manley. "You have to be visionary. You have to follow the money. And you have to hire like-minded people around you who are willing to go through the trauma and chaos of constantly turning over your bag of products." Just as surely as an IMDA member takes on a new technology, it is likely to lose another out the back door, either through acquisition, going direct, going to a general-line distributor, etc.

"I would add that successful companies are looking at other strengths in their organization and capitalizing on that," says Manley. For example, CVC has parlayed its expertise in distribution by offering logistics services to some of the manufacturers it represents. Pursuing an opportunity such as this allows the specialty sales and marketing organization to bring in income without having to diverge significantly from its core competency, he says.

Prior to acquiring CVC in 1993, Manley had been national sales manager for Ballard Medical's OR division. Within four years of acquiring CVC, he doubled the company's annual sales through internal growth and acquisitions, and expanded its scope to include anesthesia products and equipment in addition to its traditional offerings in cardiovascular surgery. In 1998, he exited the cardiovascular business.

Return to top

Vasu Narasimhan, director, life sciences business development/regulatory affairs for Teledyne Analytical Instruments, City of Industry, Calif., is seeking a few good medical device distributors. Actually, he's seeking distribution throughout the United States for the company's oxygen sensors, analyzers and monitors.

Teledyne Analytical Instruments -- IMDA's newest allied member - is a strategic business unit of Teledyne Technologies.

Teledyne's medical devices are used primarily in the hospitals, but as the U.S. population demographics change, the company is focusing beyond the acute care markets into segments such as long-term care, home care, and physicians' offices, says Narasimhan.

Until last year, the company's devices were distributed by Tri-Anim. With a mutual decision to part ways, the long-standing relationship between Teledyne and Tri-Anim came to an end at the end of last year. Now, says Narasimhan, Teledyne is undertaking a meticulous search for several regional medical device distributors, and in its search, has approached IMDA. To maximize its efforts, the company recently became an allied member of IMDA.

Narasimhan says that the Year 2010 will be the inflection point for Teledyne's medical device market, and the company is taking deliberate measures to get closer once more to the market that Teledyne knows well, but seems to have lost touch with lately.

Narasimhan has been with Teledyne Analytical Instruments for nearly 17 years, and has headed up regulatory affairs the last six. He has also taken on the challenge of growing the pharmaceutical and medical device product lines via his role as director of life sciences business development. He has a mechanical engineering degree and a master's in international business, both from India. He recently earned his health care executive MBA from the University of California, Irvine.

IMDA members interested in learning more about Teledyne Analytical Instruments can call Vasu Narasimhan at (626) 934-1504 or e-mail him.

Return to top

VendorClear has joined Vendormate and Status Blue as the third vendor credentialing firm to offer discount rates to IMDA members. The Eden Prairie, Minn.-based company has reduced its current retail rate of $129 per person per year to $85 per person per year.

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.)

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

Details of the VendorClear, Vendormate and Status Blue discount plans are available by visiting the IMDA home page (www.imda.org) and clicking on the "Vendor Credentialing" box. For a list of vendor credentialing firms, see June 2009 IMDA Update.

Return to top  

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.