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Lab Institute ’06Washington, DC
September 27 - 30, 2006
Larry Siedlick, CEOSunrise Medical Laboratories
Capturing Your Capturing Your MarketMarket
Sunrise OverviewSunrise Overview
• Located Just Outside New York City• 1972 – Founded as Local Community Lab• 2006
– 285 Employees– 1.2 million Patients projected– $55 million revenue– Largest Private Regional Lab in NY– Over 450 sites with Electronic Orders/Results– Over 50% of our lab orders are electronic
Sunrise GrowthSunrise Growth
15.418.3 19.3 20.7
25.529.5
37.441.6
48.250.3
55
0
10
20
30
40
50
60
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Revenue in millions
How Did We Get ThereHow Did We Get There
• Great Management Team
• Financial Discipline
• Organic Sales Growth
• Early Adopters of Technology
• Creative Business Solutions
• We Know When We Don’t Know
• We Never Help Our Competitors
Strategies for GrowthStrategies for Growth
• Money and Strong Financial Controls
• Service Culture
• Marketing/Sales Discipline
• IT Connectivity Strategy
Money Money ““An Obvious But Often Missed ConceptAn Obvious But Often Missed Concept””
• Have a lot of money before you start or
Know how to get it once you begin
• Effective Financial Controls and Billing
• Competitive Internal Cost Structure
Reality Reality –– ““What a ConceptWhat a Concept””
• Reality # 1 - Most labs have little or no control over reimbursement levels from third party payers
• Reality # 2 – A major part of a financially successful lab is the ability to manage and control their costs
Required Financial Info Required Financial Info Cost Side Cost Side -- The BasicsThe Basics
•Supply Cost/Accession–For client supplies, lab supplies, etc.
•Total Labor Cost/Accession–All your labor expense
These 2 together give you a pretty good idea of your main cost to
process an accession.
Required Financial Info Required Financial Info Revenue SideRevenue Side
• Days Sales Outstanding (DSO)• Average Time Between Lab Service and Payment • Measures your cash flow – Lower is better• Quest is 46 days and LabCorp is 54 days*• Sunrise is 38 days
• Bad Debt as % of Total Sales• Compare to other labs
• Bad Debt as % of Patient Sales
“ Profit is directly proportional to your billing capabilities”
* LIR March 2006
A Word About PricingA Word About Pricing
• “If you live by price – you die by price.”– Pat Lanza
• No Loss Leaders
• “Pull-through” is a Myth
ServiceService““Hiring for DummiesHiring for Dummies””
• We hire people for what they know…then we fire them for who they are.
• Customer Service is a personality trait and not a technical skill.
• Spend more time in the hiring process finding out who people are
ServiceServiceItIt’’s More Than Lab Resultss More Than Lab Results
• Customer Call Centers (Lab/Billing)– Management Reporting Software for your phone service
(answer times, missed calls, distribution of calls, abandoned calls, etc)
• Turn Around Time– Competitors will use it against you
• Couriers – Treat them right– Face of Your Lab
• Field Client Services– Takes service to next level – lab loyalty
• IT Services– IT Staff needs a culture of service
Service Problem SolvingService Problem SolvingHow Quickly Can You Make Things RightHow Quickly Can You Make Things Right
–Billing Problem–Missed Pick-up– Incorrectly Entered Lab Order–Repeat or Add a Test–Send Another Report–Fix a Printer or Computer–Deliver Supplies
Basic Guerilla MarketingBasic Guerilla Marketing
Marketing is Not Complicated
• Physician Database (www.infousa.com, www.physicianlistline.com, www.skainfo.com)
• Learn to Use Word and Mail Merge
• Buy a Color Laser Printer
Develop Name RecognitionDevelop Name Recognition
• Marketing Letters to Physicians• Marketing Leave Behinds for Sales Staff
– Insurance Lists– CV’s of Pathologists/Key Technical Staff– Test Information
• Patient Education Brochures– Sources: Reagent Manufacturers, state health dept websites,
www.nih.gov, www.cdc.gov• Press Releases• Sales People
Keep Your Friends Close Keep Your Friends Close and Your Enemies Closerand Your Enemies Closer
• Know your competitors weaknesses• Check their websites• Listen to quarterly web casts where they will
discuss new initiatives• Monitor their websites (Get on their emailing
notification list)• Talk to everyone – attend conferences and
belong to industry organizations
SalesSalesThe Good, The Bad and The UglyThe Good, The Bad and The Ugly
• First Sales Rep Should Be from Lab Industry
• Management – Total Commitment to Sales– Give them something new to sell on regular basis
• Basic Sales Compensation – “Cash collected” not “Cash Expected”– Keep them hungry– Performance Incentives– Non-solicitation Agreement
What Does a Sales Person Do?What Does a Sales Person Do?““The Simplified VersionThe Simplified Version””
• Uncover service issues with physician’s current lab
• Present your lab’s solutions that expose the service level differences between national lab and your lab
• Once on-board monitor service level to client
• Develop relationship that results in lab loyalty
Information TechnologyInformation Technology
• Physician Connectivity –Order Entry/Resulting–Demographic Interfaces to Practice
Management Systems
• Lab-EMR/EHR Interfaces - Growing Demand - Government Promoting Adoption
of EHR
Information TechnologyInformation Technology
• Outreach Capable LIS - Reporting Capabilities/Flexibility - Scalable - Efficient Order Entry/Batch Processing
• Laboratory Billing System
• Dedicated Lab IT Personnel (for Hospital Labs) - Important for Success of Outreach - Reduce Dependence on IT resources
Contact InformationContact Information
Larry SiedlickSunrise Medical Laboratories
240 Motor Parkway Hauppauge, NY 11788
Email:[email protected] 631-435-1515