Antoinette Horn was waiting in her assigned 10-by-10-foot cubicle on the JW Marriott's cavernous exhibition floor, readying herself for an unleashing of zealous suppliers pitching everything from a new high-tech fabric "marrying comfort with protection" to penile and breast implants. She was perched on a high stool in front of a small table spruced up with a plate of square, crystal blue mints and a small bouquet of purple flowers that she had purchased from the hotel's gift shop.
Call her a glutton for punishment or naive, but Horn, president and chief executive officer of Cleveland-based Catholic Community Care, was actually looking forward to the four-hour onslaught of some 531 salespeople in the so-called "reverse exhibition": hospital systems in the booths and hospital vendors stalking the floor. "You try to be inviting so people will stop by," Horn said, explaining why she had purchased the flowers. "It's collaboration and partnership. That's why we're here."
Catholic Community Care, a loose network of four hospitals and nursing homes, represented one of 54 healthcare systems--roughly 90 people--that had accepted an invitation to be held captive for four hours as vendors swarmed at the ninth annual IDN Summit & Expo, hosted by NCI. The Palm Harbor, Fla., consulting company specializes in healthcare purchasing and considers itself a neutral party in the densely populated universe of providers, group purchasers and vendors that make up the healthcare supply chain.
NCI's open forum for healthcare vendors and customers offered a rare, albeit upside down, view of how healthcare supplies are purchased in this country. In 1997, nonpharmaceutical supplies collectively ate up 13% of hospitals' expenses, according to a study by PricewaterhouseCoopers for the American Hospital Association. Expositions such as the NCI event provide the theater for much of the networking behind the business of purchasing.
A number of companies and organizations host similar conferences and exhibitions, though the tables are almost always turned, with vendors enticing providers into their booths with richly appointed displays and complimentary mementos such as ergonomically correct squeeze balls, ballpoint pens and key chains. One can only guess how many prospective customers are being wined and dined off the exhibition floor.
The Federation of American Hospitals, a trade association for investor-owned hospitals, and the Health Industry Group Purchasing Association, a trade group representing group purchasing organizations, annually host somewhat similar exhibitions, except GPOs rather than providers sit in the booths. Unlike NCI, the FAH, which is considering copying the NCI format in 2005, closes its exhibit floor to the press, said Bonnie Moneypenny, the trade group's senior vice president of administration.
The only major national GPO absent from NCI's event this year was hospital alliance Premier, which had concurrently collected its hospital CEOs in Aspen, Colo., for its annual leadership conference. "We look forward to attending and participating in the NCI summit in the future," Premier spokeswoman Gina Clark said.
NCI staged this year's summit late last month in Orlando, Fla., the global capital of long lines and cheap souvenirs. The event drew 730 attendees--up from the 480 people representing distributors, GPOs, providers and suppliers that attended last year, the first year of the reverse exhibition. On the provider side, NCI sent out 150 invitations, mostly to vice presidents of materials management at highly integrated hospital systems or to systems that "show an interest in looking to improve their level of sophistication," said Philip Isham, NCI's senior vice president of professional education.
The two-day summit is open to "all stakeholders" in the supply chain, but NCI footed the travel, hotel and hefty registration fees--ranging from $1,595 to $1,995--for the hospital representatives in exchange for their promise of full participation. Besides the reverse exhibition on Sept. 25, where attendance was mandatory, the summit featured a shotgun golf tournament, two full mornings of education sessions, a cocktail reception, dinner and entertainment. From a financial standpoint, the event was designed to produce modest profits to sustain the educational programs offered by NCI. But more important, it generates referrals for NCI's consulting business, NCI officials said.
Corporate sponsors such as Huntleigh Healthcare, a United Kingdom-based manufacturer of medical equipment, and hospital bed manufacturer Hill-Rom, Batesville, Ind., kicked in anywhere from $15,000 to $75,000 to promote their brand name in signage and printed and electronic advertising aimed at the 54 hospital system captives.
Sponsorship opportunities included breakfasts and snack breaks, the welcome cocktail reception, the golf tournament, lunch and the expo, a dinner of grouper and filet mignon with entertainment by an '80s band, the education sessions, speaker fees or a $75,000 marquee sponsorship. Other than the advertising, sponsors have no "input whatsoever on any of the content, selection of the IDNs, or the speakers," Isham said. "We're the third-party education provider. ... Everything is handled by NCI from soups to nuts."
Uwe Reinhardt, a healthcare expert and economics professor at Princeton University, expressed some delight when the event was explained to him. "It's just ingenious what American entrepreneurs will dream up to get a transaction initiated," he said.
Reinhardt said the NCI summit seemed "competitively structured" with "no market rigging here." The suppliers are merely guaranteeing themselves an audience rather than investing the time and expense to build a booth "where no one comes or only comes by for the ballpoint pens," he said. He compared paying the way for providers to a mother bribing a child with ice cream to get him to sit still for a piano lesson. "You'd have to pay me more than golf to get me to listen for four hours, but from an economist's point of view, it is an efficient exchange of information," Reinhardt said.
Shows attempting to match buyers and sellers are as prevalent as traveling salesmen. NCI's format appears "as much as anything to supply an efficiency for the vendors," said Peter Lurie, deputy director of the health research group for Public Citizen, a consumer watchdog organization based in Washington. "If you are going to be (making sales calls) at these hospitals anyway and you can do it by flying around to less of the country" rising healthcare costs might be contained, he said. "On the other hand, if they wind up selling products more expensive than necessary, that could wipe out the efficiency. ... If some of the smaller companies (can't pay the registration fees) that gives companies with more expensive products a leg up," Lurie said.
Although NCI's exhibition was open to any vendor willing to pay the registration fees, the opportunity did not hit the radar at Little Elm, Texas-based Retractable Technologies. The safety needle manufacturer has led the charge against GPOs in recent years, alleging that anticompetitive business practices have impeded small device manufacturers from gaining a foothold in hospitals to market their innovative technologies.
"We have no record that we were ever invited to this thing," said Phillip Zweig, a company spokesman. "I've heard about this deal, but I heard that it was more of a conclave for GPOs. I was not aware that it was a marketing type opportunity. Now that I know it is, I'll make a point of contacting people and get on the mailing list."
Kohl aide was speaker
Presumably, the NCI event did reach the radar of Sen. Herb Kohl (D-Wis.), the ranking minority member on the Senate Judiciary Committee's antitrust panel. For more than a year, Kohl has spearheaded an inquiry into GPO business practices based on the complaints of small device manufacturers like Retractable Technologies.
Indeed, Seth Bloom, Kohl's senior counsel, was a speaker at the summit, providing an update on the Senate panel's inquiry into GPO business practices. NCI paid Bloom's travel expenses to Orlando, but he did not receive a speaker's fee, which would have been in violation of Senate ethics guidelines, said Jeff Miller, chief Democratic counsel on the subcommittee. As for the reverse exhibition as a forum where providers and vendors meet, Kohl had no comment, said Lynn Becker, Kohl's spokeswoman.
At least initially, Horn's modest enticements of candy and flowers produced mediocre results from the suppliers. As she waited for visitors, lines rapidly formed around her at the alphabetized look-alike booths inhabited by San Francisco-based Catholic Healthcare West and Christus Health, headquartered in Irving, Texas. Representatives from Huntleigh, Nestle, Nova Biomedical Corp., Fisher HealthCare, Universal Hospital Services, Megadyne Medical Products and Puritan Medical Products were cooling their heels in the Christus line. Christus recently switched GPOs from Premier to Broadlane.
"I think they're probably interested in knowing how we work with Broadlane," said Dianne Lewis, Christus' corporate manager of contracting and materials resources. "A lot of them want to know how to get in the hospitals and start selling their products."
It wasn't the freebies attracting the long lines: Seated in their spare, black-draped surroundings, the two representatives from 40-hospital Catholic Healthcare West merely offered visiting vendors a stapled, two-sided handout highlighting some "key processes" in its supply chain management.
Gene Tierney, director of national accounts for W.L. Gore & Associates, a manufacturer of synthetic material used to make surgical sutures, blood vessels and patches for soft tissue regeneration, didn't mind the wait.
"We've got only four hours to do it, but this is a great way to make eight to 12 sales calls in a single day," Tierney said. Waiting behind him was Deborah Deinstadt, senior vice president of USCS Equipment Technology Solutions, based in Brookfield, Wis. She likened the experience to a land mine video game "where when you land on a land mine and get blown up, you move on to the next one."
This year Falls Church, Va.-based Inova Health System came prepared to set off a couple land mines itself after its experience the previous year. "Last year we brought a PowerPoint presentation," said Gary Wagner, Inova's vice president of materials management. "We were naive. We thought they wanted to talk to us and not about their products. This year we were determined to make sure we get across what we want to talk about--how we do business."
Inova was passing out vendor guides to conducting business, sweetening the discussion with a bowl of Smarties candies, chocolate Symphony bars in tribute to the system's in-house employee awards, and Inova Health System pencils.
Some of the vendors "haven't figured it out yet--they're still trying to sell us stuff," said Robbin Bixler, the system's director of contracting. Wagner was speaking with someone else when Ward Broom, executive vice president and chief operating officer of Duluth, Ga.-based IPA, stopped by to pitch the company's automated scrub dispensing equipment.
A man on a mission, Broom delivered his spiel in less than a minute and learned that Inova does its own laundry and is "looking very carefully at our scrub policy." He walked away with a list of contact names within the system and a pencil "so you remember us here." Scrubs are one of about 400 cost-challenging areas that the system has identified--everything from high-tech equipment to turning off the lights--so Inova might actually be interested, Bixler said after he left.
Down by the Y-booths, Yale New Haven (Conn.) Health was limiting vendors to five minutes. It seemed to be working because there was no line. The system was handing out free blue and yellow yo-yos, and it was raffling off two Yale New Haven stadium blankets and a nylon gym suit.
Patrick Luddy, Yale New Haven's vice president of materials management, was attending the expo for the second year in a row and enjoying it, he said. "Here's the opportunity," Luddy said. "These guys pay $1,800 a person and they get to walk around and see us. Normally it would take three to four months to see us and cost a fortune for the hotel and airplane. And us: I get an opportunity to see people it might take three months to see me." Most of Luddy's business is done on the phone, he added. At the NCI summit, he finally got to put a face to a salesman he had been talking to for two years.
Lots of freebies
The best freebies arguably were down the next corridor at Norfolk, Va.-based Sentara Healthcare, where representatives were handing out multicolored Slinky-type toys, T-shirts saying "Quality First, a team effort," and a stack of brochures and maps. Sentara had a secret weapon in Elizabeth Duncan-Hawker, the system's director of strategic programs, who was relentlessly selling Sentara's own program called DOCxdirect, an e-commerce marketplace for Virginia physicians. Manning the booth was hard work, she said. Too many people, not enough time.
"I want to talk more with everybody," Duncan-Hawker said. "This is very fast-paced. It's like speed dating."
Joy Dicey Phillips, executive director of supply chain management at San Diego-based Scripps Health, was competing with the lines at nearby Disney World for the longest wait of the day. Lora Richards, south central regional manager for DuPont Medical Fabrics, was standing at the end of the long, glacial-paced line, clutching a sample of the company's newest composite fabric. One of five representatives that DuPont had on the floor, Richards aimed to visit eight integrated delivery networks in the one afternoon. Scripps was her sixth. She assessed the situation.
"She's more involved than most I've seen," Richards said, referring to Phillips. "She's alone, too. Some had really long lines, but I skipped those and figured I'd come back later. Ascension had a long line, but we moved through there pretty quick."
Two hours into the summit, Broom of IPA said he had already hit 15 provider booths selling his automated linen dispenser systems and was setting his sights on seeing all 54. The reverse exhibition differed from the usual trade shows in that it was "a lot cheaper," offering "a captive audience" just waiting for his sales call, he said. "But I won't know the end results until about a year from now."
As the exhibition wound into its third hour, the flowers at Catholic Community Care were looking a bit wilted, no reflection on Horn, who had so far collected 37 business cards. "I guess that's a lot. It's a little energizing actually," she said. The plate of mints was still full, though. "You can't talk to people when they are in your mouth, so we haven't gone through a lot," she said. "They are not coming for the candy, I guess."
If there were an award for the best put-together cubicle, it would likely go to AtlantiCare Health System in Egg Harbor Township, N.J. Mel Meck, vice president of materials management, and Sandra Garrett-Baggs, administrator for pharmacy services, were dressed in business suits and offering visitors pens, pencils, note tablets, salt water taffy and colored fact sheets. Meck said the exhibition offered a different perspective from day-to-day purchasing in that the sales representatives walking the floor tended to be national accounts managers. They were both flattered by the attention. "Folks here are selling their company. Sales reps usually just sell the product," Meck said.
The highlight of the day? "Some guy said I had a beautiful smile," Garrett-Baggs said.
What do you think? Write us with your comments. Via e-mail, it's [email protected]; by fax, 312-280-3183.