Magazine Article | January 14, 2014

Discover New Bar Code Scanning Revenue In Healthcare

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By Jay McCall

This IT service provider’s consultative sales approach and understanding of important healthcare trends are keys to its projected 30% revenue growth this year.

According to research from the 2112 Group, spending by global healthcare providers for IT services is growing 6 percent annually and will reach nearly $33 billion by the end of the year. Additionally, healthcare IT consulting is growing at 9 percent each year, making it the fastestgrowing subsegment in the global healthcare provider IT market. When you consider all the political (Affordable Care Act), economic (skyrocketing healthcare premiums), sociological (aging baby boomer population), and regulatory (HIPAA) factors driving healthcare reform, it’s clear that stakeholders ranging from the smallest family practices to the largest hospitals have to embrace change in order to remain in business. VARs and MSPs (managed services providers) that are open to constant change can make a good living by providing IT solutions and services to this vertical.

Embracing change is a business philosophy that aligns perfectly with IT solutions provider Atlanta Computer Sales (ACS), which ever since its inception 28 years ago has operated by the motto, “If you don’t accept change, you won’t be around to change.” This could partially explain why, for the past 18 years, healthcare has become its top vertical focus, accounting for 75 percent of ACS’ overall sales revenue. David Dean, president of ACS, recently shared with me some additional secrets behind his company’s success in the healthcare vertical.

Make Your Healthcare Expertise Visible
Resellers with no obvious healthcare focus find it difficult to penetrate this market because healthcare decision makers tell them, “You guys just don’t get our business.” ACS recognized this reality early on and, after considering its options, made a couple of big changes to its business in order to boost its credibility with healthcare decision makers.

One of the first steps ACS took was to develop a strategic partnership with EHR (electronic health record) software vendor MEDITECH by becoming a preferred integrator, which led to ACS working with MEDITECH to provide the first telehealth solution used in home healthcare 18 years ago. The telehealth solution monitored patients’ clinical measurements and enabled doctors to keep updated on patients’ progress remotely. ACS also attended many trade shows that focused on healthcare and the technology needed to access providers’ healthcare applications, such as MEDITECH regional events, forums, and conferences. The years of experience in telehealth and home healthcare led to an expansion into the LTAC (long-term acute care), acute care, and ambulatory markets by providing similar IT solutions and services.

To make its preferred integrator status more visible to prospects, ACS spun off a healthcare division called ACS MediHealth and launched a special website for its new division, www.acsmedihealth.com, that would allow it to more easily highlight its healthcare expertise. “Rather than trying to fit this healthcare-specific information on our general website [acs-ebiz.com], we felt this was the best way to reach our target audience and to stand out in this market,” says Dean.

And just who is the target audience that ACS engages? According to Dean, it’s usually a group of people, often referred to as a core team, which includes titles such as CIO, clinical director/manager, CNO (chief nursing officer), pharmacist, and one or more individuals from an administration team which could include a social worker and/or someone in human resources. By engaging these core teams early in the process, ACS gains a better understanding of the challenges healthcare clients face. This allows it to provide better feedback and create a plan with clients to help meet their goals and timelines.

In addition to using its new name and website to distinguish itself from its competitors, ACS discovered that among the myriad of bar code scanning and personal computing hardware vendors, there were some that were much more suited to the healthcare environment than others. ACS decided to certify each vendor partner with MEDITECH and to publish those vendors on its site once they met MEDITECH’s software requirements as well as ACS’ service level agreement requirements. “Some manufacturers have devices that are very cumbersome to use in a hospital or home care environment,” says Dean. “For example, it’s important to validate that a nurse actually visited the patient in person to administer medication, so being able to read 2D bar codes with unique identifiers is important, and it has to be accomplished with minimal effort.” In some cases, ACS’ feedback has led to device manufacturers making updates to their products to become certified in a healthcare environment. “Each device used in a healthcare site needs to be disinfectant-ready and easy to use, and have a service agreement that is conducive to a 24/7 environment,” says Dean. “Some devices don’t make the cut due to their inability to be cleaned or to be programed to do certain tasks, or even due to poor ergonomics.”

Subscribe to Business Solutions magazineConsultative Selling Is Nonnegotiable In Healthcare
One of the primary differentiators ACS says is behind its nearly 90 percent win rate in healthcare is its sales approach. Although you can look on ACS’ website and find a long list of product vendors, Dean says his sales team never starts a conversation talking about a specific product — or even a bundle of products. “We’ve always believed that just like a doctor can’t properly make a diagnosis without listening to the patient, we need to hear about the customer’s business challenge and understand their challenges before we can make recommendations,” he says. “Even though a new customer may appear similar to another one that just bought XYZ product bundle, there are a couple of critical steps that must be followed before we can know for sure.”

One of the first things ACS tries to discern when it’s meeting with a group of decision makers is whether their problem/ challenge is primarily a workflow issue or an IT issue. “We prefer to shadow a nurse or physician during their shift to discover what technology they’re currently using and how they’re going about documenting patient information,” says Dean. “We also try to understand the work culture, which can vary greatly from place to place. For example, we may find that one facility has a younger staff that prefers doing as many job-related activities on their smartphones, whereas another facility would be totally against having to work with such a small form factor.” In the latter scenario, a full-screen laptop or mobile cart-based solution may be more appropriate. The key is to understand the demographics of the staff and to get buy-in from the core team before making a specific recommendation, advises Dean. “Listening to the core team as well as some of the daily users of the technology takes the guesswork out of the sales process and cuts down on the objections most VARs face,” he says. “We’ve unseated competitors that were several times larger than our company and incumbents for years with a healthcare client simply because we did a better job of listening to the client’s challenges and understanding the situation rather than trying to push a product right away.”

To take its consultative sales approach a step further, ACS doesn’t even base its salespeople’s performance on how many products they sell. Instead, sales managers ask reps, “Who did you help today?” These discussions allow sales reps to recommend products and services they feel would best benefit clients without creating a high-pressure environment.

Future Healthcare Growth Opportunities
Although ACS has been selling into the healthcare vertical for the past 18 years, the IT consultant and service provider sees the aging baby boomer population and radical changes in healthcare insurance creating new opportunities in home healthcare. “Plus, the only way hospitals can remain profitable any more is to turn patients out more quickly — oftentimes before patients are fully recovered, which is another reason home care is becoming more prevalent,” says Dean. “We’ve seen a growing need for medical devices that can communicate with mobile EHR devices and securely upload patient data to the cloud. Physicians can access this data and more easily monitor their patients’ progress rather than seeing a patient in the office in three months and having to make bigger adjustments to medications or treatment plans.”

Subscribe to Business Solutions magazineIn anticipation of this upcoming opportunity, ACS developed middleware that communicates between diagnostic medical devices and mobile devices via Bluetooth to update a patient’s electronic health record and ensure the data is stored securely in the cloud. “We’ve already received a patent on the software, and we’ve begun the certification process with our vendor partners,” says Dean. ACS has a goal to have this live and ready for the general public by the middle of 2014.

One other area ACS is finding new healthcare IT opportunities is Canada. “Following an unexpected hospital visit I had after suffering severe stomach pain during a business trip to Canada, I discovered that Canada is a laggard in technology adoption and depends on the U.S. for much of its healthcare IT buying decisions,” quips Dean. “During my visit to the Canadian hospital, the number of redundant questions I was asked during each step of the examination process was ridiculous, and observing nurses writing patient vitals on their arms as a reminder to manually record it later was even more alarming.” Dean suspects it’s going to take much more than mobile computers to solve that hospital’s issues; there will most likely be a need for patient care policies and workflow changes, which are all part of ACS’ consulting process. No matter what the IT solution looks like in the end, Dean predicts it will include patient bar code wristbands and mobile bar code scanners, which comprise 40 percent of ACS’ overall revenue. “This is an important component to improving patient safety — ensuring patients receive the right medication type and dosage at the right time,” he says. ACS is working with several Canadian hospitals now to guide them in the electronic health record process and avoid some of the frivolous spending some hospitals in the United States made by not understanding what they were buying and how it would benefit their workers and patients.

Although HIPAA regulations are driving many healthcare practices to adopt healthcare IT solutions such as patient bar code wrist banding and electronic health records, Dean says that many of the healthcare practices he encounters are financially strapped, and it’s not uncommon to hear, “How are we going to do this and pay for it?” In addition to helping customers take advantage of government incentives and rebates, ACS offers break-fix and managed services to help clients extend the life of their legacy IT equipment. “One of our customers is a 450-hospital based in the Northeast,” says Dean. “Despite having more than 3,000 doctors, nurses, administrators, and other employees, as well as contractors and vendors using its network and/or IT devices, the hospital has only four IT people on staff. We help them maintain legacy printers, laptops, and bar code scanners. We’ll sell hardware and equipment pieces and parts as needed, and we provide everything from mouse pads to medical carts. Most of our customers are still on a break-fix plan with us, but we are starting to gain a little traction with managed services, especially with smaller acute care facilities.” Like any IT services provider, ACS would like to increase its recurring revenue contracts, and as the market continues to evolve it believes managed services opportunities will become greater in the future. In the meantime, the company’s consultative sales approach and ability to keep up with the latest trends in the market are leading to continued healthy revenue margins.

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