Annual conference wrap-up.
Create value, create success.
What's the most important thing for a business
leader to have or to do? It's not having all the
answers. Rather, it's knowing what questions to ask.
That's what management consultant and keynote
speaker Barry Banther, CMC, CSP, told IMDA members
during his presentation on "Value Principles" at the
IMDA 2013 Annual Conference.
Manufacturers Forum: Venue for
Innovation. The show floor was active at
IMDA's annual Manufacturers Forum, held in
conjunction with the 2013 Annual Conference. See who
Are you licensed to sell?
Have you signed up with our vendor credentialing
firm?" By now, most IMDA members are well-prepared
to answer this question from their customers. But
increasingly, they're being asked yet another
question: "Are you licensed to sell medical devices
in our state?" Frank Fazio, Esq., principal, Porzio,
Bromberg & Newman P.C., brought IMDA members up to
speed on the world of licensing. And what a complex,
often burdensome world it is.
President Hal Freehling of O.E. Meyer (left)
recognizes outgoing President Tony Marmo for Marmo's
contributions to IMDA at the Awards Dinner.
Healthcare reform: Ready or
not. As Yogi Berra might say, you have to
worry about making predictions -- especially those
that concern the future. Yet that's what leaders are
called upon to do all the time. Peter Carmel, M.D.,
a pediatric neurosurgeon and past president of the
American Medical Association, offered IMDA members
his take on the future in his keynote presentation
at the 2013 IMDA Annual Conference, "A physician's
perspective on the Affordable Care Act."
Watch next month's issue of IMDA Update for
more Annual Conference coverage.
2013 Conference wrap-up
Create value, create success
Know and demonstrate value to 3 important groups
ï¿½ customers, associates, supply chain partners,
Banther tells attendees
ORLANDO, FLA -- June 10, 2013 -- What's
the most important thing for a business leader to have
or to do? It's not having all the answers. Rather, it's
knowing what questions to ask. That's what management
consultant and keynote speaker Barry Banther, CMC, CSP,
told IMDA members during his presentation on "Value
Principles" at the IMDA 2013 Annual Conference.
And those questions should be
focused on three constituencies: your customers,
your associates, and your supply channel
Customer value principles
Take a look at your important customers and ask
yourself the following questions, advised
What is the competitive
advantage this customer has in the
marketplace? Is it market position? Most
likely, if that customer is a hospital or
Who are my customer's
customers? A hospital's No. 1 customer is
its physicians, said Banther. They are the
determining factor in helping hospital
administration get the patient outcomes they
What are that customer's
These questions aren't just
intended for the leader or business owner to
ask, said Banther. Sales reps need to do the
same. If they can't answer them, they're
probably doing little more than disturbing their
accounts, instead of helping them, he said.
IMDA members need to know how their
customers measure value, continued Banther. To that end,
specialty sales and marketing organizations need to ask
themselves these questions:
How does the customer measure
What is the customer's internal
value? Every hospital has expressed value, but they
also have an internal value goal. The successful
specialty distributor will identify that internal
goal and help the customer achieve it. Banther
pointed to one Florida-based doctor who performs
cataract surgery. That doctor spends generously on
his staff and his facility, and when patients walk
through the door, they get a feeling of their own
importance, and they know the staff will take care
of them. "They know it's not the quality of care,
but the quality of caring, that matters," said
Banther. Suppliers who are clued into that internal
goal increase their chances of success in the
What do your customers value about
you? Banther drew upon the example of Walmart
founder Sam Walton, who instituted a practice of
installing a mannequin -- representing a Walmart
shopper -- at the executive conference table, to
remind them that every decision they make must
represent value to him or her.
Other value-related questions:
What is your customer's value
How do they communicate that value
to the market?
How do their employees express that
Your customers don't wake up in the
morning wondering how their favorite supplier is faring
in the market, said Banther, who recalled this piece of
advice from his father: "You'll care less about what
people think about you when you realize they're not
thinking about you at all." That's why successful
suppliers know their customers' value proposition, how
they communicate it, and how their employees express it.
"It allows you to get on the same page as them," he
Another customer value principle: Study your customers'
external drivers, that is, their biggest market
influences. Know what is influencing their customers,
and become obsessed with it. In fact, become obsessed
with your customers. "If you do, your buyer senses you
really care about them, and that you really know their
business. That's when you move from being just a dealer,
to being a real partner.
"Authority doesn't win; market share doesn't win," he
said. "Influence wins."
The tyranny of the urgent
After hashing out these questions, successful
distributors hard-wire their discoveries into their
systems. "Demand that anyone on your sales team can
answer all these questions at any moment," Banther said.
Doing all this isn't easy or quick. It takes practice
and time. But those who want to be successful are
willing to pay the price, he said, citing golf legend
Arnold Palmer, practicing his game even into his 70s.
What is there to prevent you from making this approach
an integral part of your business? "The tyranny of the
urgent," said Banther. There's always something at the
moment to take precedence over adopting a
"But the tyranny of the urgent is a myth," he said. "You
always have a choice. And this is a tough choice. We
have to take the time to define what's important to us.
Too often, we [revert] to the urgent, because we don't
know what's important. We use it to avoid the important
things." Your people are one of those most important
The most expensive inventory you have gets in the car
and comes to work every morning, Banther told attendees.
Yet it's the one leaders often ignore -- their
employees. The second set of value principles about
which he spoke at the IMDA conference were associates.
Every person who works for you carries a natural
resistance to being open with you, Banther said. Owners
or managers have to break through that resistance and
understand their associates' goals ï¿½ and even their
goals for their families. Failing to do so will have
repercussions, said Banther, pointing out that most
people leave their jobs not because they got a better
offer, but because they can't take their boss any more.
Openness begins with listening with empathy. "Listening
has nothing to do with hearing, but with the environment
we create." Employees know when their boss isn't really
listening to them, but only pretending to. "Remember
this: People will forget what you say and what you did,
but they will never forget how you made them feel."
The successful leader of the mid-20th Century was the
person who came into the office earliest and left last.
In the mid-70s, as the electronic age began to open up,
the most successful leaders were the "smartest" ones,
that is, those who understood technology. Today, the
successful leader is not necessarily the hardest-working
or smartest one; it's the person who facilitates work
being done by others. Management guru Tom Peters said it
best when he advised leaders to manage by walking
around, said Banther. "You have to invest time with your
team. You can't afford to be secluded. They have to see
Successful leaders help their associates see and
appreciate their associates' strengths, he continued.
People get their fill of negative feedback, and face
more than enough personal and financial struggles. "They
get the messages, ï¿½You're not smart enough.' ï¿½You're
late.' ï¿½You're the wrong color or ethnicity.' But you
have the opportunity to view that person differently, to
be a source of strength, and to help that person
contribute to the bottom line," he said. "Every employee
has a strength. It's your job to draw it out of them."
Supply chain partners
Just as leaders must provide value for their customers
and associates, so too must they provide value for their
supply chain partners, said Banther. Those partners may
be complex, so value may be added incrementally.
Start by building seamless and virtual communication
systems, he said. "Communications are important, but
systems trump everything," because automated systems
remember things that people forget.
Seek collaboration with your supply chain partners. And
keep in mind the critical distinction between
cooperation and collaboration: Cooperation is in the
moment; collaboration requires partners to plan
together. Align your resources, so each party knows what
it has to contribute, he said. "And when something goes
wrong, realign them."
Successful businesses work with their supply chain
partners to measure success, and they celebrate
together. "Our world is more like a spider web," said
Banther. There's not a straight line between business
partners. Rather, there is an intricate network of
overlapping relationships. And the leader is the
ringmaster in the middle. "Remember: You're not the
hardest-working or the smartest. You're facilitating."
IMDA dealers can take some comfort in the fact that the
demand for innovative healthcare products will only
grow. "But the competition is smarter, and the only
competitive advantage you have will be the value [you
can demonstrate to others].
"That is yours to create."
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2013 Conference wrap-up
Manufacturers Forum: Venue for innovation
ORLANDO, FLA -- June 10, 2013 -- The
show floor was active at IMDA's annual Manufacturers
Forum, held in conjunction with the 2013 Annual
Conference. Exhibitors were:
Air Safety Ltd., Hendersonville,
Tenn. (air filtration products),
Ken Haas, 615.886.8047.
endOclear, LLC, San Ramon, Calif.
(technology for cleaning endotracheal tubes),
Ken Watson, 414.517.7153.
Flexicare, Irvine, Calif. (airway
management, anesthesia and oxygen delivery and
Brant Nave, 949.450.9999.
Flight Medical Innovations, Lod,
Israel (portable life-supporting respiratory
Bill Timmel, 813.334.9400.
Heartland Medical Sales and
Services LLC, Louisville, Ky. (computer
integrated with anesthesia machine),
Mike Dirr, 502.671.1014.
Maxtec, Salt Lake City, Utah
(oxygen analysis and delivery products),
Bruce Brierley, 801.201.2682.
Medmarc and The Hartford,
Chantilly, Va. (insurance products and risk
management solutions for medical
manufacturers and distributors),
George Ayd, 703.652.1309.
OakMed Products LLC,
Clarkston, Mich. (pressure care,
falls-prevention and skin integrity
David Baetens, 855.625.3678.
Northampton, Pa. (specialty respiratory
Suzanne Moyer, 610.262.6090.
Ind. (full face and nasal masks,
tracheostomy tube systems, speech cannula,
subglottic suctioning disposable inner
Todd Laderach, 317.246.5505.
Respiratory Motion, Waltham,
Mass. (respiratory monitoring),
Dominic Spadafore, 781.373.1636.
Westmed Inc., Tucson, Ariz.
(respiratory care and anesthesia products),
Rick Kelly, 520.294.7987.
Return to top
2013 Annual Conference
Are you LICENSED TO SELL?
ORLANDO, Fla. -- June 10, 2013 -- "Have
you signed up with our vendor credentialing firm?"
By now, most IMDA members are well-prepared to
answer this question from their customers. But
increasingly, they're being asked yet another
question: "Are you licensed to sell medical
devices in our state?"
Following up on an interview in September 2012
IMDA Update, Frank Fazio, Esq.,
principal, Porzio, Bromberg & Newman P.C.,
Morristown, N.J. (and a pharmacist as well),
brought IMDA members up to speed on the world of
And what a complex, often burdensome world it
"Laws demanding medical distributors to be
licensed were originally put into place
primarily to prevent the diversion of
pharmaceuticals, explained Fazio, who is also
vice president, distribution and licensing
services, for Porzio Life Sciences, LLC. The
firm focuses on helping companies remain
compliant with federal and state regulations
governing distribution licensing, marketing and
sales in the life sciences industry.
But some states have opted to lump medical
devices in with pharmaceuticals. Today,
approximately 20 states require that
manufacturers and distributors of medical
devices be licensed to sell medical devices.
(More than twice that number require licensure
for companies shipping prescription drugs.) In
many of those states, the requirements for
wholesalers, or distributors, are more stringent
than for manufacturers.
Licensure requirements -- and fees --
differ from state to state. To be licensed in Missouri,
for example, a manufacturer only has to fill out a
one-page application and submit a $10 fee. Those selling
in Florida can expect to fill out a 15-page application,
while manufacturers and distributors selling or shipping
into Maryland can expect to pay $1,750.
Many states require the distributor to have an approved
license in its home state before applying for a license
as a non-resident distributor.
In most circumstances, the state board of pharmacy
grants licenses. But in others, some unlikely agencies,
such as the Department of Education in New York, are in
charge. In California, two agencies have jurisdiction
over the device distribution chain: the board of
pharmacy (for wholesale distribution) and the Medical
Device Safety Section of the Food and Drug Branch (for
In some states, licenses are granted quickly; in others,
the distributor can expect a delay of months. Some
states demand that even suppliers that never touch a
product, but only sell it on behalf of another entity,
must be licensed. And the definition of "device" differs
from state to state as well. For example, some states
only regulate the sale of medical devices if they
contain a drug component, others demand licensure if the
distributor sells devices intended to introduce drugs
into the body (such as syringes), and others regulate
durable medical equipment.
Some states demand that personal information, such as
corporate officers' social security numbers,
fingerprints, background checks, etc., be provided as
part of the licensure process. That is in order to
prevent unscrupulous companies from closing shop, then
opening up under another name weeks later. Other types
of required information include facility photographs and
floor plans, articles of formation, inspection reports
(state and FDA) and documentation of FEIN, or federal
employer identification number.
Penalties vary for non-compliance to state licensing
requirements, ranging from fines to closing down of the
vendor's facility. Some states not only prohibit vendors
from selling medical devices without a license, but they
prohibit buyers from buying products from unlicensed
vendors. In those states, IMDA members can expect to be
asked by their customers, "Are you licensed to sell
medical devices in this state?"
Licensure is a fact of life, and will be for the
foreseeable future, predicted Fazio. "As states seek new
sources of revenue, it's possible the number of states
entering this area will increase in the next few years."
For that reason, device companies need to keep track of
the myriad of state requirements and monitor changes in
state laws, he said.
Return to top
2013 Annual Conference
Healthcare Reform: Ready or Not
ORLANDO, Fla. -- June 10, 2013 -- As
Yogi Berra might say, you have to worry about making
predictions -- especially those that concern the future.
Yet that's what leaders are called upon to do all the
Peter Carmel, M.D., a pediatric neurosurgeon and past
president of the American Medical Association, offered
IMDA members his take on the future in his keynote
presentation at the 2013 IMDA Annual Conference, "A
physician's perspective on the Affordable Care Act."
The truth about our healthcare system
The future is clear, but not especially sunny, said
Carmel, who battled planes, trains and automobiles to
make it to the conference, given inclement weather on
the East Coast. In fact, there is one overriding truth
about the U.S. healthcare system: The status quo is not
"The good old days ain't coming back. And they
weren't that good anyway," he said. To wit:
many Americans lack access to healthcare,
and an estimated 50 million lack health
delivery is inequitable. For proof, look at
some of this country's inner city hospitals.
system is too expensive for both the states
and the federal government.
Medicare, which Carmel called "the linchpin of
healthcare reform," faces a rough road ahead.
When the program was created in 1965, the
average life expectancy was 66; now it is 78. In
the beginning, Medicare covered 19 million
people; by 2030, approximately 80 million will
be enrolled, and the number of workers
supporting each beneficiary will have fallen to
In 2011, the average Medicare beneficiary paid
roughly $130,000 into the fund, but consumed
about $420,000 worth of services. "It's not a
good business plan," said Carmel.
Say what you will about the Affordable Care Act,
aka Obamacare, but health system reform was --
and remains -- a necessity, Carmel said. The law
expands health insurance to more than 32 million
Americans, provides subsidies to those who can't
afford insurance, and allows for the purchase of
private insurance through competitive exchanges.
No longer can insurers deny coverage to someone
due to a pre-existing condition. And already, an
estimated 54 million Americans have benefited
from expanded coverage for prevention and
Physicians bearing the brunt?
The good news is, the rate of growth of healthcare
expenditures has been steadily falling for more than a
decade, said Carmel. The bad news, at least for
physicians, is that annual spending for physician
services has fallen dramatically. In 2010, physician
payments grew just 1.8 percent, the lowest growth rate
in 51 years.
Carmel blamed the current Medicare physician payment
formula -- called the Sustainable Growth Rate, or SGR --
for causing physicians to fall behind in terms of
compensation. Instituted in 1997, SGR calls for
physician payments to increase no faster than the gross
domestic product. The upshot is, while spending for
hospitals and skilled nursing facilities has increased
in the double digits since then, spending for physician
payments has not. And though Congress has postponed
cutting physician payments over the past 10 years, as
the SGR law called for, the threat remains that
lawmakers could enact a 24 percent cut in January. It's
a threat the profession has faced multiple times over
the past 10 years, Carmel said.
Given the slowing down of the rise of healthcare
spending, right now would be a good time to end the SGR,
he said. Some lawmakers agree, and legislation has been
drafted to that effect.
The changing physician
Despite what happens on the legislative front, the
medical profession is facing big changes, which
ultimately will affect IMDA members and others who sell
products to them, said Carmel. A growing number of young
physicians, those just coming out of residency, are
rejecting setting up their own practice or partnering in
an existing practice. Instead, they are pursuing
employment, most often by hospitals. In fact, physician
recruiter Merritt Hawkins & Associates predicts that by
the end of 2014, 75 percent of all newly hired
physicians will be hospital employees.
"Physicians have always valued their autonomy, but now
they prefer the security of being employed," said
Carmel. And hospitals are eagerly pursuing them, as
doctors may become their newest profit center. Inpatient
care may become a loss leader, while outpatient care
will bring the greatest profits. "It's the new nature of
the hospital business."
Demographics aside, healthcare reform will also affect
physicians' futures, said Carmel. The rapid -- and to
some, surprising -- popularity of accountable care
organizations, as well as bundled-payment programs, are
changing practice patterns. Already, between 37 million
and 43 million Americans are participating in an ACO.
"The basis for physician payment has been
fee-for-service -- you do something, you get paid for
it," he said. "It's a system that encourages the use of
services, but not necessarily the promotion of health."
ACOs, on the other hand, reward providers and other
participants, including insurance companies, for
providing high-quality, low-cost care, particularly to
those with chronic diseases.
"Our current healthcare system is not sustainable,"
concluded Carmel. "It's too costly, too inefficient, too
inequitable. We need new payment and delivery systems."
Published by IMDA
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|2013-2014 IMDA Board of Directors
Hal Freehling, Jr., O.E. Meyer Company (419) 609-1633
Tony Marmo, Martab Medical (800) 229-2290
Don Reiter, SRC Medical
(818) 717-8807 x19
Chairman of the Board
Duke Johns, Medical Specialties, Inc. (504) 734-1171
Bill Carmouche, Medical Dynamics (916) 624-3952
Todd Endersby, Alamo Scientific (210) 543-1300
George Howe, Mercury Medical (727) 573-4907
Bill Schultz, IPV Medical, LLC (760) 212-2769
Don Sizemore, D&D Medical, Inc. (615) 859-2337
Manufacturer Representative to Board
Suzanne Moyer, Precision Medical (610) 262-6090
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