This month's headlines
 

The Buck Stops Here. President Harry Truman had a sign on his desk that said "The buck stops here." If IMDA keynote speaker Gerry Layo had his way, each IMDA member would have a similar sign on his or her desk. Credit cards a fact of life. It would be a stretch to say that credit card usage among healthcare providers is skyrocketing, but it does appear to be growing. And IMDA members aren't sure whether that's good or bad. Impact looks to IMDA members to build market. Impact Instrumentation -- IMDA's newest allied member -- is growing, and it wants IMDA members to be part of that growth. Small businesses would benefit from Lending Fund. Community banks would be encouraged to extend loans to small businesses through a proposed $30 billion program proposed by the Obama administration in February.

Keystone Resort, Colorado site of the 2010 Annual Conference

Annual Conference The Buck Stops Here

President Harry Truman had a sign on his desk that said "The buck stops here." If IMDA keynote speaker Gerry Layo had his way, each IMDA member would have a similar sign on his or her desk.

In his opening presentation at the upcoming Annual Conference, Layo promises to challenge IMDA members to leave excuses and rationalizations at the door, and focus instead on the market they face. . .and how to succeed in it. The emphasis will be on the owner's or CEO's role in reinventing his or her company and giving his or her sales reps the tools to succeed in a new environment.

It is up to the CEO or owner to redefine what exactly is expected of the sales force, says Layo, who is a sales trainer and consultant. If reps are too comfortable with traditional selling techniques that don't work anymore, they may have to be nudged in a new direction. Owners and managers might find it necessary to train their people how to talk about total value instead of product features and price, or how to provide value to the materials manager instead of merely to the clinical buyer. They might find it necessary to insist that their reps do whatever they can to access the C suite in addition to department heads.

"In a good economy, anybody can sell," says Layo. But in a tough economy such as the current one, owners need to be looking at their processes, their philosophy and the productivity of the sales reps. "Sometimes, what you did in the past doesn't make sense anymore," he says. "So take your company apart before your competitor does, and decide whether you're doing the right things to succeed."

Schedule

The Conference will begin with an opening session at 3:30 p.m. on Sunday, May 16, and will end at 12 noon on Tuesday, May 18. The Manufacturers Forum -- the industry's only gathering place for manufacturers of innovative medical technology and specialty sales and marketing organizations -- will be open for a total of six hours on Sunday and Monday. Here's a look at the Conference schedule.

Sunday, May 16

• 9 a.m.: IMDA golf tournament.
• 3:30 p.m.: Opening session. Attendee introductions, manufacturer introductions, and sharing of the important business issues they are addressing.
• 5 to 7 p.m.: Manufacturers Forum and Welcome Reception.

Monday, May 17

• 7 a.m.: Continental breakfast.
• 8 a.m. to 12 noon: Keynote presentation, "Reinventing the Specialty Sales and Marketing Organization," by Gerry Layo.
• 12 to 2 p.m.: Manufacturers Forum and Lunch.
• 2 to 3:30 p.m. Brainstorming session: How can IMDA members re-invent themselves to remain relevant and profitable in the decade ahead.
• 3:45 to 5:15 p.m.: Member-led breakout sessions on selected topics.
• 6 to 7:30 p.m.: Manufacturers Forum and Reception.
• 7:30 to 10 p.m.: Awards Dinner.

Tuesday, May 18

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

Stay tuned to IMDA Update and your e-mailbox for more details.

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It would be a stretch to say that credit card usage among healthcare providers is skyrocketing, but it does appear to be growing. And IMDA members aren't sure whether that's good or bad. At least that's the impression one gets after a recent listserv exchange and follow-up conversations on the subject.

Most of the members with whom IMDA Update spoke pointed out that the government accounts -- particularly, Veterans Administration hospitals -- lead the pack in credit card usage. The so-called "purchasing cards" allow individual buyers, with the proper pre-authorization, to place orders in the course of their duties. And the purchasing card concept is finding its way into the private sector as well. Providers apparently find using credit cards more efficient as well as a way to gain rewards, such as frequent-flier miles.

Ambivalence

IMDA members are ambivalent about the trend. Tim Wynne's response reflects that of others. "We do not encourage it, and only suggest or require it for customers with credit concerns," says Wynne, of Surgical Principals in Tacoma, Wash.

"We have several accounts that are pre-pay or credit-card only, and it has really streamlined our A/R operations, as we were finding ourselves spending 80 percent of our collections time on smaller accounts," he says. "Also, if it's a smaller surgery center and we really don't have a good idea regarding their creditworthiness, we will require credit card payment only until we get a history with the account."

Adds Jenifer Wynne of SMD Wynne Corp., Plain City, Ohio, "I ask doctors from some offices to pay with credit card authorization prior to shipment when they have abused the net 30 days' payment. And they seem to be fine with that term."

Dave Campbell of Vital/Med Systems finds that a few accounts -- primarily government accounts -- use credit cards to pay their bills. "If an account has bad credit, we also will accept credit cards," he says. To recoup the fee that Vital/Med must pay to its merchant bank on credit card payments, the company adds a couple of percentage points to the provider's bill.

Adds Don Reiter of SRC Medical, "The number of transactions using credit cards is growing. The problem with the trend is the fact that some accounts game the system by waiting until payment is due, then pay with the credit card, in order to take advantage of the float.

Credit cards present challenges

"Personally, I don't like credit card payment, but I will take them," says Bruce Cheatham of CVC Inc. Particularly with customers who lack established credit, the 2.5 percent fee that CVC incurs on credit card transactions is worth it, he says.

But credit cards present challenges to the business owner over and above the fee that goes to the merchant bank, he adds. First, if the customer disputes a charge, "you've got this intermediary called the credit card company trying to determine if services were actually rendered," he points out.

Second, matching credit card payments to invoices isn't as easy as with checks. "If I pay one of my vendors with a check and a remittance attached to it, that says, ‘I paid this invoice and this invoice and this invoice,'" he says. "That paper doesn't exist with credit card payments."

And third, when a hospital buyer pays with a purchasing card, there's always the possibility that the hospital can audit the purchase after the fact and determine the buyer was unauthorized to make the payment. It can pull money out of the business owner's account. "Now, does that happen all the time?" says Cheatham. "No. But how many times do you want it to happen before you get a little upset?"

It all evens out

Samantha Weber, who handles A/R and A/P for St. Louis-based Bell Medical Inc., says that credit card usage is growing among the company's customers. And she's just as glad it is.

"I prefer [credit cards] over checks," she says. "If the customer pays that way, we get our money sooner." That money in the bank balances out the fee that Bell must pay its merchant bank.

Like other IMDA members, Bell encourages its smaller customers, including dentists and veterinarians, to pay with credit cards. That's because they tend to be less systematic about paying their bills. Hospitals, on the other hand, don't need much persuasion to pay via credit card, as more are using purchasing cards to make their payments.

IMDA Announcement Stay in touch . . .with IMDA's listserv. Now it's easier than ever to electronically communicate with your fellow IMDA members. It's called a listserv, and it's up and running now. It replaces the electronic bulletin board. Simply write your message, address it to the IMDA listserv address (found in the "Members Only" section of the IMDA Website) and click "send." All your colleagues will receive the message. Plug into the power of IMDA through IMDA's listserv.

Not only does Bell Medical accept credit card payments from its customers, but it also pays about 40 percent of its manufacturers that way, says Kevin Lueders. It does so for two reasons. First, it gives the company a little extra float. "We get billed, and when our 30 days are up, we give [the manufacturer] our credit card number," he says. That's OK with many companies, though others insist on payment as soon as Bell buys the products.

The second reason Bell prefers to pay by credit card is the same reason many consumers do -- for the miles. Bell finances virtually all business trips exceeding $250 with the frequent-flyer miles it earns through its credit card purchases. "It becomes a huge benefit of paying by credit card," says Lueders.

You'd better shop around

Bell Medical found that shopping around for better rates pays off. The company managed to save 8 percent annually by switching merchant banks, says Weber. Other IMDA members have discovered the same thing.

Medical Specialties in New Orleans, for example, was working with one bank whose rates -- at least at first glance -- appeared to be 2.15 percent for Visa and MasterCard. But a closer look at the statements showed something quite different. After adding up the incremental fees, rewards programs, and transaction and processing costs, "the total, total, total was almost 5 percent, which drove me up the wall," says Duke Johns. He asked his bank to come in to talk, but "they gave us doubletalk." He switched, and knocked a couple of percentage points off his fee.

According to Bruce Cheatham, "You may have to create a competitive environment, where one company is bidding against another. It can make a significant difference. You can knock off 50 basis points fairly easily."

"Always ask," says Johns. "You need to ask. If they give you guff, try someplace else."

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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Impact Instrumentation is growing, and it wants IMDA members to be part of that growth. Founded in 1977, West Caldwell, N.J.-based Impact makes ventilators, portable aspirators, on-board aspirators, mobile aspirators, in-wall suction controllers, vacuum pumps and accessories, mounting systems, calibration analyzers, a battery pack rapid charger, and accessories. In 1993, the company acquired the trademark, trade name, manufacturing and distribution rights to Sorensen^(R) mobile aspirators. Impact is IMDA's newest allied member.

Historically, Impact has used a combination of direct sales and local medical device distributors to sell its products, according to David DeSantis, vice president of sales and service. That approach has served the company well as it focused its attention on the military/government market, as well as emergency medical services. But now, as it introduces new products well-suited to the hospital market, "our challenge is to build our sales channel to cover that market," he says.

"We are now focusing on larger regional specialty distributors with experience introducing new technology to the hospital market. This strategic shift of sales channel partners will better support the introduction of Impact's new and more clinically sophisticated products."

IMDA members can reach David DeSantis at (973) 882-1212 or by e-mail. The company's Website is www.impactii.com.

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Community banks would be encouraged to extend loans to small businesses through a proposed $30 billion program proposed by the Obama administration in February. Called the Small Business Lending Fund, the program would target community and smaller banks (that is, those with assets under $10 billion), which lend the most to small businesses, according to The White House. It would also offer incentives for banks to increase small-business lending by reducing the dividend paid to Treasury on their capital investment.

"This new $30 billion small-business lending fund would help small businesses fuel local job creation and economic stability," said the Independent Community Bankers of America in a statement following Obama's proposal to establish the fund.

Community banks appear to need all the help they can get. Since the beginning of 2008, 192 banks have failed, with 27 of those failures occurring in 2010, according to the Wall Street Journal ("Bank Failures Threaten Small-Business Lending," March 15, 2010). Total lending by U.S. banks fell 7.4 percent, the steepest drop since 1942.

These failures could lead to a lending shortfall for small businesses of as much as $250 billion to $500 billion as the economy recovers, according to Raj Date, executive director of Cambridge Winter Center for Financial Institutions Policy, who was quoted in the same article. Small-business lending typically runs almost $1 trillion annually in the United States, he said. Cambridge Winter Center (www.cambridgewinter.org) identifies itself as a "non-profit, nonpartisan organization dedicated to fostering a rational and informed discourse on U.S. financial institutions policy."

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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.