This month's headlines

Ed Boracchia wins Ernie Douglass Award. Ed Boracchia -- CEO of Boracchia + Associates, 26-year member of IMDA, and former president of the association -- was the recipient of the prestigious Ernie Douglass Award.

A plea for some common sense. IMDA members left the recent Annual Conference with little doubt in their minds that if they are to catch the attention of the Joint Commission in the vendor credentialing discussion, they must speak the language of patient safety.

IMDA insurance program gets off the ground. It might have been a year or two in the making, but IMDA’s new product and professional liability program could prove to be well worth the wait for IMDA members.

Oridion receives manufacturers award. Oridion Capnography received IMDA’s Manufacturers Partnership Award in recognition of its outstanding relationships with specialty sales and marketing organizations.

Don Sizemore brings technical, sales skills to bear on market. You wanna get technical? Don Sizemore can mix it up with the best of ‘em. You wanna close a sale? He can do that too. Given those two strengths, is it any wonder that Sizemore found his way to IMDA?

Matt Arbuckle comes from the school of hard(ware) knocks. Matt Arbuckle has been selling specialty products to doctors for some time, although in the beginning, they weren’t medical in nature. In fact, his first product offerings -- when he worked in the hardware industry -- were high-end products for homes.

OAK BROOK, ILL--Ed Boracchia -- CEO of Boracchia + Associates, 26-year member of IMDA, and former president of the association -- was the recipient of the prestigious Ernie Douglass Award. The award was presented by former IMDA president and Award recipient Dave Campbell at the recent Annual Conference.

The award was established in 1994 in the memory of Ernie Douglass, a founder of IMDA in 1978, and the association’s third president. It recognizes a person in the healthcare industry who exhibits support and encouragement of associates, a willingness to share his or her business and distribution knowledge, professional salesmanship, and ethics in business.

“I first met Ed Boracchia when I joined IMDA in 1991,” said Campbell. “I felt a bit unsure of myself as I joined a group of fairly successful business owners in this industry. I’m sure many of our new members feel the same way today. But Ed was not one to hang back from making new friends, and I think his ever-present smile was part of what made getting to know each other just that much easier.”

Past award winners are:

• John Ahern, The Specialties Group (1994).
• Frank and Betchie Bistrom, former IMDA executive administrators (1995).
• Ron Lawson, Professional Orthopaedics Inc., IMDA co-founder and first president (1997).
• Steve Picheny, Stepic Medical (1999).
• Duke Johns, Medical Specialties (2002).
• Dave Campbell, Vital/Med Systems (2004).
• Bob Wahlenmaier, Products for Surgery (2006).

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OAK BROOK, ILL--IMDA members left the recent Annual Conference with little doubt in their minds that if they are to catch the attention of the Joint Commission in the vendor credentialing discussion, they must speak the language of patient safety. That much was clear following remarks by Laura Smith, associate project director for the Joint Commission’s division of standards and survey methods, following a panel discussion on the topic at the conference.

What also was clear, however, was the fact that many languages indeed are being spoken about vendor credentialing. For example, panel participant Mike Carey, director of purchasing for the University of Chicago Hospitals, defended vendor credentialing as a means of certifying that the vendors who call on the hospital work for companies that are financially viable and will remain so throughout the life of the contract. Carey added that with as many as 150 reps calling on University of Chicago every day, it is imperative that he knows who’s walking the halls. Vendor credentialing can help him do that.

For his part, IMDA member Bob Byers -- another panel member -- made it clear that he and the entire IMDA membership understand the provider community’s desire to protect patient safety. But, he added, the current, chaotic vendor-credentialing status quo may actually impede or bring to a halt the introduction of innovative technology -- including technology to promote patient safety -- by imposing an overwhelming economic burden upon the companies that bring them to market.

Meanwhile, Peter Sheehan, founder of REPtrax (a vendor credentialing firm), argued that a properly functioning credentialing system can actually benefit vendors by sparing them the hassle and expense of jumping through the hoops of hospitals’ home-grown credentialing systems.

Joint Commission

Indeed, during the panel discussion, all eyes were on Smith. The Joint Commission is planning to issue suggested recommendations about vendor credentialing -- called a “field review” -- by the end of the year. The public will have up to six weeks to comment, after which Joint Commission will refine the recommended guidelines.

Smith told IMDA members that while the organization is intent on coming up with some general credentialing requirements for sales reps (incorporating, perhaps, such things as knowledge of HIPAA, training on infection control, etc.), it is especially concerned about establishing guidelines on the competence and knowledge of reps who call on patient-care areas, such as the OR.

When asked about the “must-haves” in a credentialing process, Smith was clear: “Those related to patient safety,” she said. “We’re looking at our existing requirements for hospital staff, and deciding which of those…would apply to sales reps.”

The Joint Commission is investigating whether it should recommend that reps -- particularly those who call on the OR and other patient-care areas -- demonstrate knowledge of the products they sell. The question is, how would they do so? “We’re looking at how physicians are privileged insofar as new equipment is concerned,” said Smith. “Maybe we can use that as guidance.”

Smith asked IMDA members to offer their input on how the industry could monitor incompetent reps. “There currently is no system to track ‘bad apple’ reps,” she said. “For nurses, you can go to state nursing boards. The same is true for physicians. But there is no way to track complaints or issues with sales reps. So that’s something we’re throwing out there to think about as well.”

Hospital perspective

Carey’s remarks were the subject of much anticipation, because the University of Chicago subscribes to Vendormate, a company that has aroused the ire of many IMDA members because of its per-hospital or per-IDN fee.

“There are a number of risks when the medical center does business with vendors,” said Carey. “Companies default, and that threatens patient care. If you’re a sole-source vendor…and the source of a critical supply, and your company has filed for bankruptcy, I won’t know that. But I will with a vendor credentialing company. [In addition], vendor fraud costs hospitals money. We can’t afford issues with vendors, such as lawsuits. [Vendor credentialing] is about making sure we’re doing business with viable organizations.”

But hospitals have other concerns, which vendor credentialing can help address, he added. “We don’t know who’s wandering our halls….I don’t want to keep [vendors] away from Dr. Smith, but I do want to see that the right people are coming in, and that they’re seeing [doctors] at the right time, so as not to be an annoyance to them.” Hospitals have an obligation to make sure that sales reps know and adhere to HIPAA regulations, he added. What’s more, a vendor credentialing firm can help a provider such as the University of Chicago keep on top of the thousands of individuals who are on the government’s list of vendors who have been prohibited from doing business in Medicare institutions.

“There has been a lot of pushback [from vendors],” admitted Carey. “And I know there’s a lot of expenses [associated with credentialing].” Carey conceded that vendors will probably pass on these additional costs to their customers.

REPtrax

A former medical device sales rep himself, Peter Sheehan admitted “it is alarming where a vendor rep can go in a hospital.” The need for some kind of controls has been clear for some time, he said. He decided to found REPtrax in 2005 because he sensed a market opportunity. “I saw the writing on the wall -- that hospitals were creating their own [vendor-credentialing] systems. If there weren’t third-party credentialing, you would have a per-hospital charge. You’d be negotiating with each hospital you call on.” The Lewisville, Texas-based company has a seven-year, sole source agreement with MedAssets, and a three-year agreement with Consorta, he said.

Sheehan had a sympathetic audience among IMDA members, because the REPtrax model gives the sales rep access to any REPtrax hospital or IDN for just one fee. In addition, the company does not provide financial analyses of vendors, nor does it collect personal information, such as a sales rep’s social security number or driver’s license number.

Watch for next month’s IMDA Update for more coverage of the Annual Conference.

IMDA member

Meanwhile, representing the voice of specialty distributors, Tri-anim CEO Bob Byers argued in favor of a passport-type system for sales reps. Such a system would ensure that after meeting one universally accepted set of credentialing requirements, the rep would have access to any hospital in the country. Such a system would promote patient safety without damaging specialty distributors financially, he said.

The lack of a universal credentialing system is extremely costly, and it may drive some specialty distributors out of business, said Byers. “Yes, eventually you can pass those costs on, but you have to survive long enough to be able to do that.” Ironically, then, the healthcare system’s attempts to ensure patient safety through credentialing may backfire, as the companies that specialize in introducing innovative technology to the market -- and then training clinicians how to use them -- are priced out of the market, he said.

Byers urged IMDA to join forces with manufacturers and major distributors to provide information to the Joint Commission as it investigates solutions to the vendor credentialing situation. He urged all parties to use “common sense” on the credentialing issue. Reps are well-groomed and educated on HIPAA and infection control, he pointed out. In fact, they present less of a threat to patient safety than many visitors, he said. Yes, some standards should be in place for reps who call on the OR and patient care areas, he said. “But reps should only have to meet the [same] level [of requirements] as anyone else in the OR.”

What’s next?

Following the panel discussion, IMDA President Shawn Walker of Bay State Anesthesia facilitated a brainstorming session on the vendor credentialing issue among IMDA members. Of critical importance is how the Joint Commission ultimately categorizes salespeople, she said. That’s because the category into which an individual rep is placed will, in all likelihood, determine the requirements he or she will have to meet in order to be credentialed. Presumably, reps who are in relatively close contact with patients, such as those calling on med/surg floors or the OR, will have to meet stricter guidelines than those who call on the materials management staff.

But simply lumping reps into two categories -- those who call on patient-care areas and those who do not -- may be too broad, said Walker and others at the brainstorming session. The IMDA vendor credentialing committee will explore options to suggest to the Joint Commission.

(Editor’s Note: AdvaMed, an association of medical products manufacturers, has already asked the Joint Commission to develop definitions of “healthcare industry representatives” that would reflect their diversity, and develop specific credentialing requirements relevant to the rep’s role. To view a copy of the association’s Sept. 26, 2007, letter to Laura Smith, go to http://www.advamed.org/NR/rdonlyres/D13CA862-1836-45DF-891F-CC009B5EAC99/0/AdvaMedcommentsonHCIRCredentialing0926074.pdf.)

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OAK BROOK, ILL--It might have been a year or two in the making, but IMDA’s new product and professional liability program could prove to be well worth the wait for IMDA members. In fact, at press time, 20 members had already submitted Information Request documents for the program. The program was unveiled at the recent Annual Conference.

The new program, offered through Phoenix, Ariz.-based Alliant Insurance Services, offers members a minimum of $1 million of coverage at extremely competitive rates, according to Alliant First Vice President Matt Cohn. Alliant will serve as the broker, while Chantilly, Va.-based Medmarc will provide the coverage. Thus far, one IMDA member has already confirmed about $11,500 in savings in annual premiums through the program, and another is estimating about $10,000 in savings.

Unlike the program that had been discussed at the 2007 Annual Conference, the recently announced program allows each member to buy virtually as much coverage as it wants, said Cohn. (The previously discussed program would have established an aggregate cap of coverage for all participating IMDA members.) Participants must be IMDA members to participate.

Medmarc was founded in 1979 by a group of medical device manufacturers. Today, the company continues to focus on product liability insurance and risk management for the medical technology industry.

IMDA members and prospective members who are interested in finding out more about the insurance program should contact Matt Cohn at (602) 707-1917, or IMDA’s Patti Perillo at (866) 463-2937.

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OAK BROOK, ILL--Oridion Capnography received IMDA’s Manufacturers Partnership Award in recognition of its outstanding relationships with specialty sales and marketing organizations. Oridion is an Israeli company with U.S. offices in Needham, Mass. Founded in 1987, the company developed a superior measuring technology for capnography, which is the graphical depiction of the amount of carbon dioxide being exhaled by a patient -- a sure sign of ventilation.

The IMDA award recognizes a vendor that offers exceptional clinical and sales support; communicates openly, frequently and honestly; responds promptly to questions, suggestions and problems; aggressively and creatively markets its products through such vehicles as advertising, trade shows, promotions and direct mail; and actively contributes to helping IMDA members increase revenues on its product lines.

“Oridion’s clinical support has been excellent,” said Tom Birmingham of Bay State Anesthesia, who created the Manufacturers Partnership Award. “Their clinical sales specialists are very business-savvy and dedicated to each region.” Oridion has high-quality support people in place, and it maintains “great presence” at national shows, he added. It also publishes “excellent literature, CEU packages and educational material for the customer.”

Although pre-existing OEM contractual agreements preclude Oridion from working exclusively with specialty dealers, the company has made all its new technologies available to them, said Birmingham. “They see the value of the organizations we run, and they have been 100 percent responsive to making our relationship more effective.”

In his remarks, Birmingham cited Oridion’s receipt of the 2006 Growth Strategy Leadership Award from consulting firm Frost & Sullivan as proof of its commitment to distribution. At the time of the award, Frost & Sullivan said, “The Oridion Distribution Network, aimed at forging relationships with distributors focused on consumable patient interface products, has enabled Oridion to leverage its position as a leading manufacturer of capnography supplies and expand the sales channels for its products. This, in turn, continues to reaffirm Oridion’s superior product quality and design among the medical distributor community, as well as among the professional institutions with which the distributors negotiate.”

This year was the second year that IMDA presented the Manufacturers Partnership Award. Last year’s recipient was Vidacare, the San Antonio, Texas-based manufacturer of the EZ-IO® intraosseous drug-delivery system.

(Editor’s Note: Oridion Capnography is the subject of an IMDA case study. To view it, go to www.imda.org and click on “Case Studies” at the top of the page.)

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You wanna get technical? Don Sizemore can mix it up with the best of ‘em. You wanna close a sale? He can do that too. Given those two strengths, is it any wonder that Sizemore found his way to IMDA? In fact, his company, D&D Medical in Goodlettsville, Tenn., just north of Nashville, is one of the association’s newest members.

Sizemore grew up in Louisville, Ky., and moved to Tennessee when he was 20. He got his start in technical sales in the telecommunications industry, as a sales engineer for Harris Lanier. His job was to sell the company’s business telephone systems, voice data switches and other products to his customers’ technical experts. After calling on some hospitals for Harris Lanier, he found himself drawn to the healthcare industry, and got a job with Lynn Medical, a distributor of the first computerized cardiac cath lab made by Mennen Medical.

In 1991 he joined Medical Data Electronics, an Arleta Calif.-based company that developed the first wireless patient monitoring system. After a couple of years of selling in the field, Sizemore moved into sales management. After he had been with the company for more than seven years, Medical Data Electronics was forced to eliminate a management position. Facing some health issues, Sizemore and his wife decided it was best if he dropped his responsibilities as a regional manager and instead become a distributor for MDE. It worked, and as MDE lost sales reps, Sizemore assumed their territories as a distributor. Hence, D&D Medical was born.

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From the outset, D&D distinguished itself by focusing on training its young sales reps. “We would take reps fairly fresh out of college, with little or no sales experience, and train them on the medical aspect of sales,” he says. He did so well that he caught the attention of Welch Allyn, the Skaneateles Falls, N.Y.-based manufacturer of diagnostic equipment and systems. In 2001, Sizemore joined the company, and was responsible for selling its Acuity Central Monitoring System along with the newly developed wireless patient monitor, a line it had just acquired. “Protocol was at the leading edge of technology,” says Sizemore. The company had developed a wireless monitoring system using 802.11 technology, and had a central station that was UNIX-based. “The networking capabilities were incredible,” he says. The system allowed doctors to view real-time data on their hospitalized patients from within the hospital or at remote sites.

While working for Welch Allyn, Sizemore maintained D&D. “It continued to operate, but I won’t say it thrived, because it didn’t get as much attention as it had.” But then Welch Allyn restructured its sales force, and Sizemore was faced with selling all the company’s product lines, not just the wireless patient monitoring system. In January 2005, he decided to leave Welch Allyn and focus once again on his own company.

“When I came back, we refined our focus and shrunk our geography,” he says. “We also changed our focus primarily to respiratory, anesthesia and neonatal products.”

Like most specialty medical distributors and reps, Sizemore is concerned about the potential impact of vendor credentialing as well as group purchasing organizations. And like his peers, he always faces the challenge of finding new lines to replace older ones he has lost. He hopes that IMDA will help him address all those challenges.

IMDA members can welcome Don Sizemore to the association by calling him at (800) 883-4366 or by e-mailing him.

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Matt Arbuckle has been selling specialty products to doctors for some time, although in the beginning, they weren’t medical in nature. In fact, his first product offerings -- when he worked in the hardware industry -- were high-end products for homes, “the kind of stuff you see in Architectural Digest,” he says. Since then, Arbuckle changed industries. His company, Arbuckle Medical, Sand Springs, Okla., is one of IMDA’s newest members. “But looking back [to the hardware business], I really did enjoy working with the clients I did. I actually sold products to several of the orthopaedic surgeons I call on now when they were building homes.”

The son of an Episcopal minister, Arbuckle was raised in Tulsa, Okla. He attended the University of Tulsa from 1979 to 1982 studying marketing and business. Just out of school, he got into the decorative architectural and builder’s hardware industry, first as an employee, then as a store manager, and ultimately, as a business owner. Oddly enough, the experience prepared him well for medical specialty sales.

“The business was similar to what I do now in that both fields deal with 'specialty hardware.’ One goes in a house, one in the body. Both offered solutions to needs, required consultation and specialized instruction for proper installation, and both were at the upper cost spectrum, only reimbursement came from the homeowner rather than the insurance company or government. One thing I do miss between the two is the ability to say thanks to your good customers. A dinner or gift basket in medical is now considered a conflict of interest.”

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After 15 years in hardware, Arbuckle was ready for a change. Just having gone through a divorce and a hip replacement (necessitated by avascular necrosis), he was pondering his next career move when a friend -- who was a distributor for an orthopaedic company -- asked if he would be willing to rep the product line in Oklahoma. “I said I would give it a try,” he says. “After about eight different lines and a lot of trial and error, here I am, 10 years later, still making a living.”

Arbuckle operated as a sole proprietor until incorporating as ArMed Inc. in 2006. He carries one manufacturer’s full line of orthopaedic products, including implants, instruments, biologic products, traction, bracing and splints. “I contract with the manufacturer’s distributor to represent the manufacturer’s product in a set territory,” he says.

Today, Arbuckle is ready to take his company to the next level. After operating for 10 years as a one-person operation, he has hired an office assistant, Jo Holman, and is contemplating taking on additional employees, including sales reps. “I need to take some risks and hire additional staff in order to provide service over a greater area on a day-to-day basis,” he says. “I have the ‘outskirts’ territory, and that requires time…to develop multiple key accounts.”

One thing is a lock: Arbuckle will continue to build on his expertise in orthopedics. “I began my career in orthopaedics and that is what I have built my experience around, so that is why I am still doing it,” he says. “It is what I know. The future looks strong for this industry with the aging population, as well, although I believe the extremely lucrative times may be quickly coming to an end due to capitation and contract issues. Additionally, more and more costs are having to be incurred that eat into the bottom line.” He hopes belonging to IMDA can help him meet some of these challenges.

IMDA members can welcome Matt Arbuckle to IMDA by calling him at (918) 245-1478 or by e-mailing 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:  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   2007-2008 Directors President Shawn Walker, Bay State Anesthesia (978) 682-6321 President-Elect Kevin Trout, Grandview Medical Resources (412) 914-0950 Secretary/Treasurer Leo Mindick, Med-Tech Consultant Partners, LLC (516) 708-1111 Chairman of the Board Dave Campbell, Vital/Med Systems (303) 660-0888 Directors-at-Large Hal Freehling, O.E. Meyer (419) 609-1633 Tom Birmingham, Bay State Anesthesia (978) 682-6321 Tony Marmo, Martab Medical (201) 512-1100 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.