Seek Privacy in the Health-Care Market
The prognosis for increasing profits is good due to regulation reinforcement.
The hot topic on the table for health-care right now in terms of business forms products is privacy. That's because on April 14, those within the medical industry are expected to adopt one of the last remaining compliances in accordance with the Health Insurance Portability and Accountability Act (HIPAA)—a law mandating regulations that govern privacy, security and electronic transactions standards for health-care information.
For distributors either seeking entry into this market or additional sales within it, this upcoming deadline swings the door of sales opportunity wide open.
According to Jim Magdaleno, account manager for TFP Data Systems, Oxnard, Calif., many large institutions (such as hospitals) and small practices (such as medical offices and dental facilities) will be filling up on products and services that comply with this regulation out of respect for their patients and will need to rely on distributors to provide them.
"This movement is meant to protect the individual rights of patients in treatment, in obtaining payment and improving quality care," said Magdaleno. "And, even though the HIPAA ruling has been in motion for several years, the medical community is doing everything it needs to do in order to catch up now. That means for the next 12 to 18 months, distributors can jump in, develop or strengthen relationships with new and current clients and look forward to ongoing business with them."
Magdaleno explained that before this ruling, patients' information could be utilized in many ways, such as within marketing materials for hospital research. "However, with new confidentiality standards, the patient must be informed of how health information with be disclosed, which leads to the creation of new products," he said. "For instance, this type of information will take the form of hard-copy contracts and security notices, which must include patients' written acknowledgement of receipt of the notice."
Another type of product born out of this privacy act is manufactured by Hospital Forms & Systems (HFS), Dallas. It's a shingled patient sign-in log that allows for discretion by virtue of the way it is manufactured. "It is designed to hide the names of patients signing in so that those coming to a doctor's office after them cannot see the previous names on the log," said HFS President Mike Martin. Because privacy is currently the hot button, HFS provides the shingled product as a stock item.
Additional Antidotes
While confidentiality-related products are expected to be big sellers for some time, there are other products faring well in the field of medicine. For instance, Martin reported that sales are strong for products such as laser-printed auxiliary and vial labels for pharmacies and also integrated cards. "In many cases, integrated cards are used by health plan companies wanting to combine welcome letters with prescription drug and co-payment cards," he said.
Magdaleno suggested claim forms as yet another viable product, stating, "The road to higher profits in this field starts with health insurance claim forms. Non-institutional entities, such as labs and physician practices, are required to submit the CMS 1500 claim form, while medical institutions are required to submit the UB92. Sales are not only available through the forms, but also through the envelopes for these forms."
TFP also provides dental claim forms, home health forms and durable medical equipment forms.
Magdaleno added that distributors should not be too shortsighted when it comes to selling health-care products by limiting themselves to patient-related forms. Since HIPAA governs privacy, security and electronic transaction standards, there are many changes going on that require health-care administration to be more efficient. Along with that charge comes the opportunity for distributors to better understand client operations and offer solutions to better serve them.
"Distributors should have a level of understanding of what is going on in health-care, and TFP offers information to help them stay on top," he says.
Professional Opinions
As far as how distributors can expect to be most successful, the diagnosis is fairly positive, except for the fact that many larger health-care institutions are already under contract. "The hospital market is, in some respects, controlled by group buying and direct manufacturers," said Martin. "There is a fighting chance for distributors who really know the language and can form alliances, but smaller practices and clinics are more open and easier for independent distributors to sell to."
Martin added that 10 years ago, about 90 percent of his forms products were sold to hospitals, with some of his hottest ones being narcotic control sets, unit set physician forms and lab mount sheets. But, times have changed, and now that number is about 75 percent. "Maintaining a strong business comes down to self preservation," he said. "For us, that meant we had to add receipts, journals and integrated products to satisfy laser demands within the market."
In Magdaleno's opinion, distributors should aspire to be one-stop-shop vendors to their health-care clients. "Because of the significant issues facing this market, professionals within it are going to turn to those who can serve all of their needs," he said.
He added that for distributors trying to create a niche in health-care, procurement offices within larger institutions or office managers working for smaller practices are the best points of contact.
The Prognosis
When asked whether or not the prognosis for success within the health-care market was promising, both Magdaleno and Martin agreed that the next year and a half should be very good. This is mainly due to HIPAA and the fact that the absolute final deadline for compliance comes in April of 2005, with security standards being the last to implement.
"The privacy issues have pushed along the need for more forms usage," concluded Martin. "Distributors can feel pretty secure about that."
By Sharon R. Cole