Q&A: Healthcare's Multitechnology Play
Take advantage of distributor tools and services to better understand your healthcare customers' needs.
Analyst group IDC predicts the healthcare market will yield more than $18 billion in IT (e.g. hardware, software, and services) revenue by the end of 2006. The majority of that revenue will be used to resolve three problems that plague this market. First, according to the National Coalition on Health Care, more than 45 million Americans are without healthcare benefits, and healthcare costs continue to skyrocket. Second, according to an article published in the Journal of the American Medical Association, more than 225,000 people die each year due to medical errors. This has become the third leading cause of death in the United States, trailing behind heart disease and cancer. Finally, complying with HIPAA (Health Insurance Portability and Accountability Act) requirements is a challenge for healthcare organizations. HIPAA violators face hundreds of thousands of dollars in fines and possible jail sentences.
In May 2005, Health and Human Services Secretary Mike Leavitt issued a report citing investment in IT as a high priority for the American healthcare system and the U.S. economy. Document management, wireless, network security, and VoIP (voice over Internet Protocol) technologies will play key roles in helping healthcare providers secure their data, reduce medical errors, and offer more affordable services.
There is plenty of room for VAR growth in this market — especially VARs that offer multiple solutions that help healthcare providers solve a variety of business problems. Recently, I spoke with several industry experts at value-added distributors (VADs) Catalyst Telecom, Ingram Micro, NewWave, and Paracon about how VARs can grow their businesses in the healthcare market.
What is the primary challenge VARs need to address with their healthcare clients?
Tom Boyle, VP of marketing, NewWave Technologies: Healthcare organizations continue to base IT decisions on HIPAA compliance, which requires hardware, software, and professional services. Consequently, this requires VARs to invest in obtaining the expertise to address specific HIPAA requirements. For example, scanning documents is one way healthcare organizations can eliminate problems such as missing files. However, digitized documents need to be secured and made available only to authorized personnel.
What steps should VARs take to better understand HIPAA requirements?
Boyle: Considering the size and limited resources of the average VAR, they should target a specific segment of the healthcare market, such as forms processing for doctors' offices or e-prescription solutions for hospitals. Becoming experts in one area will help them get a handle on HIPAA compliance and gain a competitive edge.
What is the biggest challenge for VARs that want to get into the healthcare market?
Boyle: The greatest obstacle for the average VAR that is horizontally focused is to make the shift to a healthcare vertical focus. This takes a long-term commitment and an investment in education, training, and marketing.
What are some resources available to VARs that can give them an advantage within the healthcare arena?
Justin Crotty, VP of channel marketing, Ingram Micro: Distributor-sponsored healthcare symposiums are an excellent way for VARs to get into the healthcare market. These events run one to two days and include presentations from healthcare experts — including physicians and other clinicians — and engineers who are knowledgeable about implementing HIPAA-compliant hardware and software solutions. The other benefit of symposiums is VARs get to interact with other VARs and form partnerships. For example, one VAR may be knowledgeable about implementing document management solutions, and another specializes in mobile computing and wireless solutions. By partnering, the two VARs can present customers with more comprehensive IT solutions.
Penny Honea, Eastern sales manager, Catalyst Telecom: Vertically targeted marketing campaigns are another way VADs help VARs. For example, Catalyst Telecom's Partner Services program assists VARs with co-op money for advertising and literature such as flyers and white papers that address various healthcare needs. Also, VAR partners receive end user leads that are matched to their skill sets, which saves a lot of time compared with cold calling.
Are there any tools available that can help VARs more easily partner with other VARs?
Crotty: We offer a Web solution called IMSN [Ingram Micro Service Network] that enables VARs to partner with more than 800 other VARs across the country. VARs can use IMSN to find assistance with certain projects, or they can post their qualifications and availability to other VARs that are looking for assistance. Many of our IMSN members attribute more than 100% year-over-year growth to new business opportunities created through partnering with other community members.
Besides tools that help VARs partner with other VARs, what is available to help them work with healthcare clients?
Crotty: One of our partners developed an application called TAP [total assessment program], which has been refined over the years and is now in its sixth version. The program, which is available to all Ingram partners, is designed to help VARs gain a thorough understanding of their clients' IT needs. The program is divided into various sections, which enables VARs to sit down with their customers and systematically gather information about customers' IT infrastructures. The information-gathering process takes about five hours and covers everything from hardware and operating systems to budget and expectations. At the end of the assessment, VARs present their clients with reports that show customers areas their networks are lacking.
What kinds of healthcare opportunities do VARs most often miss out on?
Mike Ferney, VP of sales, Paracon: Electrical power supplies often experience surges, current drops, and outages, which can significantly shorten the life cycle of IT equipment at best and cause system crashes and network downtime at worst. Healthcare organizations cannot afford to have a system crash. Healthcare networks are mission critical, and many systems must consistently work in concert for a healthcare organization to function properly. For example, medical imaging and diagnostic equipment is often networked to picture archiving and communications systems, radiology information systems, and hospital information systems via a corporate intranet or the Internet.
UPS [uninterruptible power supply] systems are a simple fix to this problem and a missed opportunity for some VARs. Failing to implement the necessary UPS protection can result in unexpected downtime and safety and compliance issues, which translates into lost revenue and exposure to expensive litigation. Most UPS vendors have ROI calculators at their Web sites that VARs can use to show the value of protecting IT equipment.
Honea: Many VARs offer networking and voice solutions but miss the opportunity to tie the two together on the wireless side. Voice over Wi-Fi offers huge benefits, especially for campus environments. For example, one hospital installed SpectraLink's Link Wireless Telephone System [Link WTS] at four of its buildings and connecting tunnels, allowing its nurses and doctors to communicate over portable, wireless telephones anywhere in its 555,000-square-foot campus. The solution enabled nurses to reach doctors directly via the wireless telephones, drastically cutting the doctor-nurse response time and giving patients a higher level of care.
Wireless voice has become so broadly accepted within the healthcare market that it's not difficult for a VAR to prospect new customers. Therefore, leading with a voice over Wi-Fi solution will allow VARs to discuss other offerings with their customers.
Voice over Wi-Fi sales also add significant opportunities for telephony, networking, and wireless hardware required to support the wireless telephones. Then, by adding services, such as a maintenance contract, VARs can build stronger customer relationships and create opportunities to revisit the site and offer upgrades and new products.
What future VAD services can VARs look forward to?
Keith Bradley, executive VP and president, North America, Ingram Micro: Business intelligence software will be used to give VARs a competitive sales advantage in the future. VADs already have large databases that include information about IT purchases, demographics, and product combinations. Data mining software will be used to help VADs detect buying trends and other meaningful data they can pass along to their VAR partners. For instance, a data mining solution may reveal a VAR sold a hospital a network router three years ago. The program will then automatically send the VAR a reminder that the router is approaching the end of its life cycle. This helps the VAR in two ways. First, it gives the VAR a good excuse to follow up with its customer. Second, it puts the VAR in a position of being a proactive service provider rather than always reacting to networking crises, which makes the VAR more valuable to the customer.