PHYSICIAN OFFICE LAB

Every Step of the Way

How to help your customers successfully establish, and maintain, a CLIA moderate complexity laboratory.

Investing time and energy in creating best-in-class customer solutions is a top-of-mind

activity for the experienced distribution account manager. Nowhere is this truer than guiding customers to consider establishing a laboratory. While PAMA reimbursement cuts have impacted the economic benefits of a lab somewhat, the clinical value continues to be a powerful enhancement to even the best medical practices.

In this article, I plan to outline key steps in a sound consultative approach in establishing and maintaining a CLIA moderate complexity laboratory. Our customers are constantly on the look out for solutions that provide improved clinical outcomes, better office efficiency and financial benefits. A physician office lab provides all three while providing the tests needed to initiate or modify a patient treatment program during the office visit.

Setting the stage

This key first step involves comprehensive customer discussions that identify key needs and wants of the practice. Which clinical conditions do they see most frequently that would benefit from an in-office lab? Where do you draw the line between adding tests for improved patient care and adding cost and complexity to the lab? What is the staff viewpoint on lab testing? Are they ready or reluctant? Don’t forget site readiness for power, space and water needs. Your key lab supplier will perform a site survey to alert you and the practice to site requirements for a properly functioning lab. They can also help with assessing training and CLIA compliance issues to smooth the transition and provide sound management post installation. Finally, the best-in-class office labs consider LIS and EMR connectivity for staff and patients alike.

The classic “crawl, walk, run” approach allows the fledgling POL to grow into its laboratory at a reasonable pace, with staff and management learning along the way.

Getting the deal right

Expectations are everything at this stage. You need to consult and provide a realistic view of time and budget considerations related to needed equipment, staff training, regulatory and space considerations and down stream management time and effort. While a test menu that rivals that of the local hospital looks impressive on paper, it is likely to lead to inefficiency, reagent waste, staff frustration and potential issues with maintaining high quality results. The classic “crawl, walk, run” approach allows the fledgling POL to grow into its laboratory at a reasonable pace, with staff and management learning along the way. A good quarterback leans heavily on their key lab suppliers and is not afraid to advise the customer to take establishing a laboratory “one step at a time.” Needs for ancillary supplies like centrifuges and lab accessories are often neglected or poorly planned. Make sure your key lab supplier is prepared to address connectivity and result availability issues for LIS and EMR.

Customer satisfaction is an ongoing time investment

While it may be tempting to help the customer get the lab established and then “move on to the next opportunity” neglecting proper follow-up inevitably leads to customer frustration and headaches for all over time. The savvy distribution account manager plans time to assure their customer’s on-going satisfaction with periodic structured post installation visits. It is not enough to do “fly by” visits to the lab during your routine customer visit, asking if everything is ok and heading down the hall. Meetings dedicated to spending structured time with the clinical and lab teams are critical to a properly functioning lab and meeting customer expectations. Quarterly business reviews with agreed upon agendas make all the difference. Assign someone to keep notes on action items and follow up. Be sure to focus on both “what is working well” and “what needs to be addressed or improved.” Often new testing opportunities present themselves during these business reviews. While management of the customer experience takes time, it pays big dividends down the road.

your planning activities. Be sure to take the lead in making ordering reagents and ancillary supplies easy and convenient. Standing orders for frequently needed supplies and tracking practice spend and stocking levels are necessary tools. Be sure to proactively manage these elements to avoid customer remorse and dissatisfaction. Avoid being blind sided by customer issues that seem to crop up quickly if you do not actively pay attention to customer needs and feedback post sale. Every piece of capital equipment comes with a substantial initial customer investment. The skilled distribution account manager works with their key lab suppliers to create credible and appealing financial proposals. But, where many could improve relates to product life cycle management. Have you informed the customer of the importance of system maintenance? Do they know the supplier schedule for routine maintenance they need to perform as well as preventative visits? Service contracts keep expectations in line and avoid surprise repair bills down the road. Every multiple year lease needs to include a service contract. Make it a part of every proposal you create. At the same time, plan for system upgrades Which clinical conditions do and replacement early in the lease term. Too often customers do not they see most frequently that plan for end-of-lease term issues until they receive a notice from the leaswould benefit from an in-office ing company that their lease is endlab? Where do you draw the ing and they need to decide whether to keep the equipment, upgrade it or line between adding tests for go month to month. The best practice of skilled account managers is to improved patient care and begin discussing end-of-term options adding cost and complexity well before the lease is due to end. Many account managers begin these to the lab? What is the staff discussions while there is still one year left on the lease. This allows the pracviewpoint on lab testing? tice to plan for budget and site needs for new equipment and provides time to assure that the new equipment is up and running smoothly without dis-

Stumbling blocks that lead customers to consider ruption to the practice or patients. closing their in-office lab includes staff frustration based A commitment to planning every step of the way on new and unfamiliar duties. Ongoing training with your from the initial recommendations to consider a lab key lab supplier in the lead and a commitment to man- through implementation of the exciting new solution, agement by the practice medical director are important solving issues uncovered effectively as they occur and elements to emphasize up front in the sales process and planning for life cycle management keeps your customto keep in view after the laboratory is up and running. ers happy, avoids unpleasant surprises for all and leads to Assume there will be staff turnover and integrate it into excellent, patient centric solutions.

CLINICAL SCALES

Sonar height rod scale for touchless height and weight measurement

DETECTO has been in the manufacturing business for 120 years supporting our distribution reps with high-quality medical products and first-class customer support. With a storied history and active R&D department, tradition meets technology every day at DETECTO. As we turn the corner on this pandemic, here’s to the next 120 years of working together!

Interested in Learning More?

Contact MedPro, DETECTO’s New Nationwide Manufacturer Representation

Executive Interview: NDC’s Mark Seitz

Medical distribution is seeing immense change, as well as immense opportunity, says NDC’s president and CEO

Mark Seitz is closing in on having two equally long careers in two very different fields. He

spent about 20 years practicing law, and now he’s in his 17th year in medical distribution as President and CEO of NDC, Inc.

“It was quite a change,” he said, when asked to compare the two experiences. “While practicing law, I started as a prosecutor with the attorney general’s office, and then ended up as a corporate attorney representing NDC.”

As an attorney, engagements were very compartmentalized. “You would go out, do a transaction or consult on a tax matter or something similar. There was a beginning, a middle and an end to the work that you were doing as a lawyer. And then, you would move on to your next project. Sometimes you had two or three going at once, but it was very much compartmentalized. And you were marketing yourself and your individual capabilities and your experience as a professional.”

In medical distribution, your body of work is never over until you retire, according to Seitz. “You start developing relationships. You build a team around you. If you’re leading a company, whether it’s a manufacturer or distributor, it’s a constant evolution of experience. So, it’s really a marathon of evolution compared to this isolated case-by-case pattern that you got into as a lawyer.”

Executive Interview: NDC’s Mark Seitz

Regardless of what your role is in the healthcare ecosystem, you have a profound impact on the human condition, Seitz said. “That sounds a little extreme, but not really if you step back and think about it. We may get lost in the forest of what we are doing every day, but we are all connected to one mission and one goal, which is to improve the quality of care for the people in the U.S. and in some cases, throughout the world. That was a big win for me. While practicing law, there was a certain satisfaction from successfully conducting a large business deal or solving a legal crisis for a friend or client; but what I love about our industry is being part of making a difference in the quality of life for people in my community and for that matter, throughout the United States.”

In a recent conversation with Repertoire Publisher Scott Adams, Seitz discussed how the industry has changed during his tenure, how NDC as an organization has changed, leadership lessons learned, and what he anticipates for the industry’s future.

There was a whole myriad of things internally that drove NDC to make the decision to consolidate our legacy buying groups. What we suspected at the time, and seems to have proven true, was that we would not have been able to stay relevant to manufacturers if we did not consolidate.

Scott Adams: The industry has changed quite a bit during your tenure. NDC as an organization has gone through some serious change. Talk a little bit about some of the changes you’ve seen during your tenure.

Mark Seitz: Internally at NDC, I have had a lot of talented people join the organization. Many are still here, and some have come and gone on to different opportunities. It has been quite a journey, but we are committed to changing alongside the industry to make sure that we keep the organization relevant.

It makes me feel a little bit old-in-the-saddle to have this conversation, but there’s no denying that buying cooperatives were strongly serving a mission in my early time with the company. Mr. Jim Stover envisioned and then built an impressive business model – partnering with some of the most respected individuals within the industry, including leaders like Ted Almon. After Mr. Stover’s retirement, I had the good fortune to collaborate with industry leaders from some of the most respected companies in healthcare such as Mike Racioppi with Henry Schein and Chris Fagnani with Lynn Medical. I am personally, and professionally, grateful for their vision, hard work and shared success that was realized among the industry.

There was a whole myriad of things internally that drove NDC to make the decision to consolidate our legacy buying groups. What we suspected at the time, and seems to have proven true, was that we would not have been able to stay relevant to manufacturers if we did not consolidate. Luckily, the entire team at NDC recognized the need to change and to continue to evolve the business and, perhaps most importantly with respect to this topic, our distributor partners gave us the chance to evolve our model.

In my opinion, the industry is at an interesting inflection point. We’ve seen healthcare reform, Obamacare, payment reform, ACOs, IDNs, value-based purchasing … pick your flavor of the day. Most of the past reforms, although impactful, were more tactical. They were very important and transformational – yet none of them really had the sweeping magnitude of change that everyone anticipated when they first surfaced.

There is something going on in the industry now that feels different to me. Again, this is just my opinion, and there are probably other people better qualified to answer this question. I call it the “verticalization of healthcare”. You have payers, providers, and then patient populations that are employee-based, whether it’s Walmart or Target or insurance carriers. This change is being driven by the desire for efficiency, predictability and affordability. Healthcare is being used as a tool to recruit talent to your organization. The drivers behind the vertical integration of healthcare in the U.S. is something that’s going to be very interesting and very impactful.

Adams: What are one or two things you’re most proud of NDC over this past year?

Seitz: You hear this response a lot, because it’s consistently true across so many dimensions of healthcare distribution.

The employees that work at this company and their selfless commitment and dedication during the pandemic was truly inspirational.

Today, things are relaxing with soft openings and a vaccine available. But we can all think back to a time during the pandemic where there was genuine fear. It grew into this situation where you didn’t want to touch a surface. You were afraid to get your mail out of your mailbox. You were hesitant to touch a cart in the grocery store. And people had a genuine fear that they could get this virus and didn’t know what it would do to them. Yet during that time, at the height of the pandemic, I had people beating down the door of our distribution centers to come to work and do their job, to serve our customers. It was really something to see. and shortages. I am proud that at NDC we tried our best to support the small businesses throughout the United States that partner with us for solutions. That was a big deal – keeping essential businesses in local communities up and running.

Adams: Shifting gears a little bit, as a leader, how do you continue to develop and grow? Are there things that you do personally around that?

Seitz: I do some of the regular stuff that you often hear about. I have a few books and podcasts that catch my attention. I try to stay literate when it comes to The New York Times and The Wall Street Journal. I try to listen carefully to the folks that grew up in our industry. The relationships I have made as a HIDA board member have been so critical.

Adams: You’re not the first CEO who’s shared a story like that. I’ve said it for the last year, how thankful everyone in the country needs to be to those people. The average American just assumes that gloves, masks, gowns and syringes somehow miraculously end up in a hospital. And you’re right, people were so scared.

Seitz: I’d have to admit that at times, I had fear about where it was going to end up when it was really peaking. We didn’t know the full cascade of consequences. It certainly turned out to be a horrific situation for the country. There’s no doubt about that. It was terrifying for people, and understandably so, but they still showed up to work in all types of essential businesses.

For us, we had another mission too. Besides just supporting healthcare, our model supports many small businesses, and they all have employees and families and customers that depend on them to stay open. So, it was gratifying for us to fulfill our duty to the best of our ability under all the circumstances, including allocations

Executive Interview: NDC’s Mark Seitz

I do all the regular things people do, but I also try to look at my experience capital differently. Just going through the pandemic and having to make real-time decisions in unknown territory has shown me how much I depend on my team. NDC team members come from diverse backgrounds and diverse professional experiences. I’ve got all this experience capital from all these wonderful people that I’ve had a chance to work with at NDC and in the industry. So, I make sure that I don’t ever get in a place where I think I know the answer to anything or everything. I wake up every day determined to listen.

Adams: Within your organization, how do you generate great ideas?

Seitz: One of the biggest challenges I’ve had with COVID and with how large we’ve gotten with being multisite – ten distribution centers and four corporate offices – is that I’ve lost my nexus with everybody in the company. I still have it to some degree, but not like I want to.

Yet during that time, at the height of the pandemic, I had people beating down the door of our distribution centers to come to work and do their job, to serve our customers. It was really something to see.

But, thankfully, I am not the source of great ideas at NDC. My teams are interfacing with customers. People are getting products out to customers, along with all the things that are mission critical for what we do. In the business, the ideas come from the folks that are executing on those responsibilities. They might not always know the answer, but they know the problem. Once you can appreciate the problem, then you are on your way to finding a solution.

Strategic planning is an essential part of bringing the right ideas to the business, and you must commit to it. I call it “reinventing the business”, whether it’s a rebranding exercise or moving forward in a market like we did with Preferred Medical. You must have a strategy and be committed to executing. Making sure that you take the time to think about the business long-term – and what it will look like in a couple of years. In my mind, it is a mistake to try to do too many things at the same time.

Adams: NDC has obviously grown up in front of the entire industry, from a co-op to private equity. How do you manage the cultural change?

Seitz: It’s a collective effort. Somebody must be the leader, but it’s a very collaborative effort to achieve success in business. And anybody that’s had success understands that and appreciates it.

The cultural change is interesting. You cannot have a good culture unless you’re successful. You cannot be successful unless you have a good culture. For me, it is the way that we treat people and build relationships every day. It’s integrity and consistency. Whenever I interview someone, I tell them that the biggest way to get on my bad side is not to speak to our receptionist when you are in our lobby. When you get off the elevator in the morning, you know, there’s a person sitting there. And if I see somebody get off our elevator and not speak to that person, I’m going to have a problem. I know that sounds a little self-righteous, but it’s a metaphor for what’s important to me. It’s about mutual respect.

Once you develop that culture, you have to remember to live it – you must hire and fire by your culture. Unfortunately, I have sometimes fallen short of my own expectations. Nonetheless, you must treat your partners consistent with your culture, while also making sure that the culture contributes to financial success. Ultimately, the responsibility of any leader of a business is to create jobs, support families, and support the trading partners that count on them. I am proud that we have a culture that’s well-respected in the industry. I think people feel appreciated and respected here, and when people feel appreciated and respected, they’ll run through a wall to take care of their customers.

As we have changed ownership in the company, we have been able to make sure that all of our partners appreciated that our culture is an essential ingredient to financial success.

Adams: One last question, and this might be the hardest: What’s your forecast for the future of distribution, and more importantly, the future of independent distribution?

Seitz: As a function in healthcare, the opportunities for distribution are immense from a macro level.

Executive Interview: NDC’s Mark Seitz

Regardless of advances in tech- NDC team members distribution businesses – they’re not nology and changes in care settings, wherever care is provided, a product must arrive so that the caregiver can come from diverse backgrounds and just independent distributors. If you look at our customer base that is independently owned, provide a service. So, distribution is diverse professional they all have carved out a spesafe and secure. It’s about how you experiences. cialty, niche, delivery model innovaadapt to best position your distribu tion business to stay relevant. - I’ve got all this tion, or marketing capability that’s truly unique. It used to be sort of

Looking at macro trending, if experience capital cookie cutter, independent distribuyou just did a market study, which from all these tors serving an alternate site market. we’ve done a couple recently, you’d see that the market’s expanding. The population is expanding. There’s wonderful people that I’ve had a That’s not the case anymore. Maybe they’re specializing in dermatology. Maybe they’re specialized in cardigoing to be more insured lives than chance to work with ology. Maybe they’re specializing in there ever has been before. Unfortu- at NDC and orthopedics, all these markets that nately, there’s more chronic disease states. There is an aging baby boomer in the industry. haven’t been consolidated because they’re great markets to serve. They population. Taken collectively, these developed the capabilities to be macro trends make this time the best able to serve those markets. There’s ever to be in healthcare. immense opportunity with independently owned spe-

Let’s talk about independent distribution for a cialty distribution models. little bit. I think “independent distributor” is a tired I want to close by highlighting that, for me, it is a privilabel. I think they’re independently owned specialty lege and honor to be part of such a wonderful industry.