HIDA/99 attendees hear message that change is coming, be prepared

Health Industry Today, Nov, 1999

Attendees at HIDA/99 & the 47th Annual Trade Show and Education Forum held in Chicago in mid-October were told in no uncertain terms that they may be participating in their own demise. Or at least the eventual end of their industry as traditionally understood. That was the message delivered during the Executive Strategic Forum, presented, said the Health Industry Distributors Assn., exclusively to CEOs and top corporate officers with medical product manufacturers, distributors and home care companies. About 250 executives attending the sold-out forum were told they'll have to participate in the shift from what presenters Ian Morrison and Oren Harari called "bricks and mortar" business models to "clicks and mortar." The medical industry, attendees were told, has been slow on the uptake in adjusting to the new Internet business plan. And in order to survive, the industry must make concessions to "the networking of the world." HIDA/99 hosted 5,400 attendees (including 2,600 distributor and dealer representatives) who crowded around booths from 375 exhibitors. As a major sponsor, Neoforma.com created a presence that seemed especially appropriate in the heightened e-commerce atmosphere. The company took advantage of the occasion to offer online tours of its newly introduced Shop feature, a Web site service that pushes the company into sales of new equipment and med-surg supplies (see accompanying article, page 6). Outline for the future If there was an unofficial theme to this year's event, it was the knowledge that conventional wisdom is about to be totally redefined as the industry heads into a new millennium of still largely undefined e-commerce. Entitled 2000 and Beyond: A Vision for Healthcare, the Executive Strategic Forum presented a scenario that in the not-too-distant future will force both manufacturers and distributors to change their ways of doing business. "Every day, 60,000 people in the United States log onto the Internet for the first time," said Harari, author of Leapfrogging the Competition: Five Giant Steps to Market Leadership. "Every day, one million people around the world log onto mobile phones for the first time." Hence, the networking of the world and the inevitable shift to electronic commerce. Today, said Harari, faster and cheaper is a given. "What's important today is what is the next big thing? You," he told the distributor and manufacturer reps, " have to create the next big thing. If you don't do it, somebody else will." What that requires, Harari contends, is that the industry address fundamental issues that include:

* Why today's competitive market requires radical thinking;

* Embracing perpetual change by looking ahead to tomorrow's customer;

* Understanding that continuous improvement is not enough;

* Why "trend sniffing", not "trend setting," is vital for competitive advantage. And don't rely too heavily on consultants, laughs the consulting Harari. "If you find somebody who says they know what the industry will look like in the next two years, hire him or her," he says. Definition of the past Morrison, author of Healthcare in the New Millennium: Vision and Leadership and The Second Curve & Managing the Velocity of Change, combined light humor and hard facts to confirm that change is upon the industry. Widespread discontent, particularly with managed care, reluctantly empowered consumers ("You're on your own, pal"), and the public perception that managed care is an organized system of health care financing and delivery that takes the excess profits of hospitals, specialists and drug companies and gives them to consultants is fueling the drive toward e-commerce. "Revamping the current system is akin to rearranging the deck chairs on the Titanic," Morrison said. "Physicians and consumers are equally dissatisfied with health care." Morrison said statistics indicate that the public's satisfaction with the health care industry has decreased by 6% in the past two years, and that health insurance company and managed care company ratings are down by 14% and 17%, respectively, in the same time period. On the other hand, said Morrison, 41% of those polled thought the Internet had increased a physician's ability to provide quality patient care. A full 59% of chronically ill patients used health pages created by online services such as drkoop.com, WebMD.com or Yahoo! Sale-ing along The future of the industry lies in using the Internet as a sales and marketing tool, said Morrison. Customer service will be paramount in a consumer-led revolution. Sales people will always be needed, but not necessarily to make a sale; rather, by acting as "micro-consultants" to customers while anticipating their needs. Change, said Harari, is good. And a slave to necessity. He said, "Peter Drucker tells the story that in 1908, Bell Telephone estimated that in the near future, every woman in the country between the ages of 16 and 65 would be employed as a switchboard operator. In 1910, the company invented its first automatic switching device."