IMCO Today and Tomorrow

New President Bill McLaughlin Jr. speaks about the opportunities for IMCO and its members

Independent distributors have much to offer healthcare providers and manufacturers. And Bill McLaughlin Jr. intends to make sure that IMCO members will continue to do so for years to come. McLaughlin Jr. was named president of the Daytona Beach, Fla.-based co-op in January.

Growing up as the son of IMCO’s long-time president, Bill Sr., “I knew from an early age it was something I one day wanted to be a part of,” says McLaughlin.

McLaughlin received an undergraduate marketing degree as well as a masters in business administration from Stetson University in DeLand, Fla. At Stetson, he played golf, and after graduation, pursued a professional golf career for two and a half years. “I quickly learned that there are a lot of really good players out there, and if you don’t make almost every putt inside six feet, you aren’t going to make enough money to make it on your own,” he says. As his sponsorship ran out, he pursued jobs in the healthcare industry.

In June 2004, he accepted a position with Midmark Corp. as lower Midwest sales rep, covering Kansas, Missouri, Iowa and Nebraska. His boss – and mentor – was Phil Childrey (who later became IMCO’s corporate sales trainer and director of equipment development).

“Midmark was a tremendous company to work for,” says McLaughlin. “Anne Eiting Klamar provided a perfect example of a family-owned business, treating every employee as if they were family.”

Though he had studied and learned about sales and marketing in school, being in the field was an eye-opener. “Until you actually experience sales calls, you never know what they’re like,” he says. “It hits you in the face – learning how to work smart, covering a big territory, balancing your time, making sure you’re as organized as possible.”

Working for Midmark also gave him a perspective on distributors that he might not otherwise have gotten. “I was extremely proud to work with independents,” he says. “I learned they could really influence things quickly for me. They will go that extra mile to work with you. If you give them time, they make it worth your while.”

While working at Midmark, he met his wife-to-be, Ashleigh. “Ironically, we met at an IMCO convention, where she was managing an IMCO distributor,” he says. The two were married in 2008 and now have two daughters, Alexis and Olivia, with a third expected in April.

In 2009, McLaughlin joined IMCO to focus on building its private label program and equipment business, and to manage new projects and build the resource vendor business. “We have grown as a company through our incredible partnerships with our loyal members and vendor partners,” he says. “It is our job to fight every day to keep our independent businesses independent and thriving in an always competitive market, facing changes and consolidation each year as the ACA takes a stronger hold of our industry.”

The power of independents
Independent distributors – like their national counterparts – face a bundle of challenges, says McLaughlin. But with challenges come opportunities. He believes that independents are in a unique position to capitalize on them, especially if they are part of IMCO.

“IDNs will continue to acquire physicians’ groups for the revenue and protection they can bring to a system, but many IDNs are still allowing these groups to operate separately,” he says. The emergence of very large physician “supergroups” presents opportunities. “But our members must work even harder and smarter to ensure these accounts understand the benefits of working with an independent distributor.”

Prior to becoming supergroups, many of these practices used independent local distributors and have a certain expectation of service and support, says McLaughlin. “Our members will still be there to provide that service, because they are part of IMCO, where we can help them get the pricing they need to compete. It has also been our experience with IDNs as well as with ‘supergroups’ that sole sourcing is not as favorable as they once thought. They don’t want all of their eggs in one basket, and our members have a tremendous opportunity in the physician market to be the solution these accounts need.”

The attributes independents have enjoyed in years past – e.g., their ability to quickly adapt to changing market conditions – will serve them well in the future.

“In the ever faster changing world of healthcare, it is more important now to be nimble and respond quickly to changing needs,” he says. “Both are keys to survival, because doing things the same old way will not work in today’s changing market. IMCO members will continue to have a lower cost of doing business compared to our national competitors. [This] provides them the opportunity to balance a commitment by the customer of more volume with a lower customer’s cost on products and services, while still remaining profitable.”

IMCO members enjoy many competitive advantages, he continues, including:

• Outstanding local service from a local source. (People buy from people they know and trust.)
• Dedication to their customers’ business. (Both parties are dependent on the other’s success, meaning goals are aligned.)
• Low cost of doing business. (Lower overhead with fewer levels of management.)
• Ability to be flexible for the customers’ needs. (Quick, local and immediate decisions and response time to changing needs.)

IMCO members also cover the major multiple markets that mirror the current changes in healthcare – acute care, physicians, long-term care and home care. “This allows us to adapt and make changes very quickly, because we will experience trends in one market and make adjustments as they happen in the next market,” he says. “We also utilize our member board of advisors and market advisory groups to help provide IMCO tactical support and direction along with sharing successes across all markets as they deal with the changes. These advisory groups along with our board meet twice a year with IMCO and are a vital part of our success.”

Message to vendors
McLaughlin believes IMCO’s competitive advantages extend to its members’ relationships with manufacturers and group purchasing organizations. By minimizing competition among members – even to the point of turning down prospective members – IMCO has ensured direct access to key vendor partners, consistent growth, and very little turnover of members or vendors over the years, he says. “We intentionally limit our number of vendors to ensure a true partnership and focus on growing our business together,” he adds.

“Our message to our vendor partners for 2015 is that we are a very viable, cost-effective option for them to expand their businesses and grow their market share through our members,” who cover not only the major medical markets, but dental, veterinary, safety, EMS, government, industrial, pharmacy, physical therapy and dialysis, he says. “We also make it easy to do business with us by having one point of contact for all markets to ensure a consistent message to every member. We are a marketing services organization as well, to ensure our members have all of the tools they need in the field to promote our vendor partners.”

McLaughlin is proud of members’ participation in the IMCO National Convention. For over 30 years, the co-op has averaged 93 percent member participation – 94 percent in 2014. “We sold out booth spaces at our 2015 show by November last year, so we are unfortunately putting vendors on a wait list to see if we can fit in any more booths.

“Finally, with the additions of both Bob McCart, vice president of national accounts/GPOs, and Richard Bigham, director of primary care, and their experiences in the market, we will continue to build momentum for our independent distributors as we move into 2015 and beyond.”

Initiatives

Key initiatives for IMCO include:

• The private label program
• New lab product lines
• Expanded member incentive programs

IMCO’s private label business has more than doubled since 2010, reports McLaughlin. Margins have multiplied as well. “We will continue to add more products to our portfolio, as we have added Richard Bigham, who previously managed over $600 million in private brand business at a national company. We fully anticipate that our overall private brand will continue to grow, because it is a great tool for our members to use in competitive situations.

“However, we are also supportive of our members who want to develop their own private label brand where the volume is large enough. Lastly, as the private label world grows and looks overseas for savings, we will continue to partner with our key domestic vendors on producing high-quality products at competitive, yet profitable, cost.”

Regarding lab, IMCO has added vendor partners Clarity Diagnostics, PTS Diagnostics and BioSys Laboratories, McLaughlin reports. The ability for providers to get test results and start treatment quickly can lead to better outcomes, he says.

Meanwhile, IMCO continues to build its member incentive programs as well as its Sales Emphasis Lines program, announced at the 2014 convention. “The SEL program highlights many of our key vendor partners who want to provide extra support and programs for our members,” he says. Regarding IMCO’s member incentive program, he adds, “It’s been great for us to continue to enhance these incentive programs with all of our vendor partners as well.”

Future
IMCO members have every reason to be optimistic about the future, says McLaughlin. “Small businesses are the glue that keeps this country moving, and they usually lead the way with innovative products and services. Our members are constantly working on offering their customers better solutions, service, support, and personal relationships.

“Our members have the ability to change a program, adjust a shipment, deliver a product after hours and go that extra mile that they need to, whereas most national competitors have multiple levels of management to work through in order to get approval.

“Every market that our members cover is different, but each one has new opportunities,” he adds. “We believe each market will continue to change and evolve as the payment system changes from fee-for-service to fee-for-performance, for cost reductions and for customer satisfaction.

“This is an exciting time in healthcare. Many pieces of the business are changing, from call points to pay structure to the volume of business the Affordable Care Act is hoping to bring to the market. We are and will continue to look for new opportunities for our members, create a stronger portfolio of products that address today’s healthcare provider’s needs, offer multiple options for small units of measure of major branded products, have a database of information on all relevant topics in healthcare, and continue to unite our members while never missing an opportunity to tell our small-business story.”