The Arguments For Vendor Credentialing: Because We Can

Way back when there was purportedly a Vendor Representative in the operating room that became directly involved in a case and caused a problem that resulted in a law suit. So now thousands of professional medical sales representatives are subject to registration, vaccinations, testing, suspicion, escalating costs, restricted access, and an ever growing list of "Vendor Credentialing" companies. The argument for Credentialing began because the hospitals claimed they needed to know who was in their facility and what they were doing. Of course they have every right to have that information. In most cases it was a simple matter of visiting Material Management before a scheduled appointment and signing in. A badge was generally available to fill out and all of it was done on the honor system and often no one in the office needed to be involved. Sometimes there was a check in time and a check out time that required the sales person to return to Materials and sign out. It was a pretty good system.

If anyone ever checked the logs it was unclear, but they were there if someone wanted to keep track. The first parasitic credentialing company to arrive on the scene was RepTrax. This falls under my "Because we Can" view of why so many unnecessary things are done in our world today. The written logs for some unknown reason needed to be computerized. None of the hospitals would have wasted personnel or funds on this effort because it just wasn't that important. But enter stage left: RepTrax. Here was a company that would put a kiosk in at little or no charge to the hospital because they could transfer that cost to the sales representatives and their companies. And Vendor "Credentialing" was born.

At first it was a very simple system of  "Signing In". But remember the axiom "Because we Can". As new Vendor Credentialing companies arose and competition ensued, the VC (in my day VC meant Viet Kong or even worse Venture Capital) companies had to find new and better "services" to provide their client hospitals. The first new service was innocuous at first. Each hospital had Policies. And of course the sales representatives needed to read those policies. And since they now had this nifty system to deliver the policies the hospitals got busy writing new policies. Reading those policies may be important for employees of the hospitals, but in most cases are totally irrelevant to the outside sales representatives. In the case of my company we represent products in 22% of the nation. Which equates to approximately 1500 hospitals. All with their own unique policies that change often. But not to worry, the Vendor Credentialing companies sent irritating emails to all of those pesky sales people and MADE them read all of the "important" information! And it didn't cost the hospital a dime. But wait, the VC companies are now having to provide more and more services like Policy Delivery so naturally SOMEONE has to pay.

In addition to the policies, the hospitals now require that all of the vendor sales people be vacinated for everything that they would encounter in Sub-Saharan Africa (we always knew that hospitals were Jungles).

Note: Many hospital have 100 to thousands of the general public entering their hospitals daily as visitors. They actually go to the patients rooms and often touch the patient. Not one visitor in any hospital (other than high risk patient visits) is asked anything about their vaccination status, TB, or if they have read and understand the hospital policies. Remember, Vendor Credentialing is a fraud. The purpose is to Restrict Access. It isn't to protect patients and staff otherwise everyone entering the hospital would be required to meet the standard now required of professional sales people. Point to ONE instance of TB being spread by a sales person in a hospital. "Because We Can" is not a reason, VC is about Restricting Access.

So the hospitals and VC companies asked themselves how are we going to pay for the Vendor Credentialing and the new services the VC companies were constantly inventing to increase their revenue? RepTrax had a simple system of charging $150.00 per year to provide the service that allowed the sales representative to fax in their vaccinations etc. and they would then be available to their hospital members. But that of course was only one revenue model.

Enter Stage Right: Vendormate. Vendormate created a model that charged PER HOSPITAL. It started out to be $25.00. It was annoying, but not too bad. But as always happens with those in the Protection Business they weren't satisfied with a reasonable fee. They invented the "Risk" factor. They will tell you (and I have had voluminous correspondence with them) that the "hospital determines the risk factor". Hogwash. I and no other sales person is any more "risk" to a hospital because they go to the fourth floor, OR, or Cath Lab than any other place in the hospital especially when we don't have patient contact. Make up a "risk" and what can you do? Charge more for it. And that is exactly what they did. As you fill out Vendormates on line form if you answer the questions incorrectly (honestly) when you get to the end you find out that your "risk" factor now costs you $200 plus per year to enter that hospital. The purpose of the higher charges is so that Vendormate can escalate the free services they are providing the hospital all paid for neatly by the professional sales people that enter the hospital. I have asked Vendormate to explain to me exactly what "risk" means and why that risk cost more to process? There of course is no greater "risk" only greater revenue to the VC companies.

If the hospital wants more services like record keeping and reporting then THEY should pay for it. Not the professional sales people. And if there was additional cost to the hospital the entire "problem" of professional sales people and VC would cease to exist.     

I have been calling on hospitals my entire career. The process was simple. An appointment was made with a person in the hospital who had either requested product information or who was someone who was likely to have interest in the manufacturer we were representing. For most of my career I simply went to the office of the person I had the appointment with and met with them at the appointed time. If there was interest then I would follow up by meeting with others involved in the decision or possibly conduct a trial of the products. Often I also met with Material Management about the products.

In later years, mostly due to the advent of national GPO contracts, the hospitals became less available for the introduction of new, non-contract products. They began to restrict the free information flow between vendors and providers (doctors, nurses) to "protect" and ensure the utilization of their GPO contracts. The reasons for the restricted access were to prevent the providers from requesting trials of products which were shown to them regardless of the potential clinical or cost benefits that the "off contract" products might provide. The true reason for the restrictions was that the GPO system had set up a monetary reward for contract compliance. Those GPO members that bought a large percentage of their products from their GPO contracts received very large dollar "rebates" at the end of the year. Buying "on contract" became a profit center for the hospitals. The negative effect of the system was that information about small product innovations that improved the clinical efficacy or incrementally lowered costs that "non-contract" vendors might develop, became increasingly more difficult to present directly to providers. The stated reasons for these restrictions were that the providers did not have time to bother with sales people. However the result over the last 20 years has been to effectively strangle clinical innovation in deference to the bureaucratic lowering of cost above all else.

The ever increasing restricted access for "non-contract" vendors had the chilling effect of helping the large vendors to get bigger and the small vendors to struggle. Over time there became less and less reason for the contract vendors to innovate because to do so would only increase their costs. GPO's who receive 3% and more of every dollar spent by their members have very little reason to award a better, fewer selling, product on contract if it didn't already have huge sales. I have personally seen a GPO survey their members to see which vendor the members were already buying most of so that when the contract was awarded it went to the vendor who could provide the largest fees to the GPO rather than the product that might be clinically the most innovative and effective.

Vendor Credentialling is simply the logical extension of this Restricted Access System. Making it more difficult for sales people to enter the hospital by requiring registration further protects the status-quo. One major hospital system in the Pheonix, AZ area requires that a vendor enter a valid GPO contract number into their Vendor Credentialing system before it will issue a badge to the sales person. This requirement strains the argument that the hospital is "protecting" their patients and personnel from the diseased riddled, suede shoe, fast talking, snake oil charlatans that apparently professional medical sales people have evolved into. The entire purpose of Vendor Credentialing is to tighten and further restrict access to providers. All other arguments are specious as I will show in future Blogs.

My name is Ross Rankin. I have been an independent medical manufacturers representative since 1975. My company, Representations, LLC was founded by my father in 1955. We represent manufacturers in the hospital and physician markets in 10 western states. We are one of the oldest and largest independent representative firms in the United States. I am a founding member of the national organization of medical representatives; the Health Industry Representative Association (www.hira.org). I have been a board member and President. My wife and business partner, Lyn Dee Rankin has also been HIRA President. We both hold Certified Professional Manufacturers Representative (CPMR) designations. I have written and spoken throughout my career about industry issues.

In other words, I have "street cred" in the business and a long standing reputation for speaking my mind and continually finding innovative ways of running our business and selling products in an ever changing medical industry environment. My intent for creating this Blog is to expose Vendor Credentialing for what it really is: Systematic access restriction. In addition, even calling the system of sales representative registration "Vendor Credentialing" is a misnomer in what has become a "cash grab" by an ever growing number of misleading, purely profit driven, cost raising, parasitic companies.

In this Blog I will outline the falicies of Vendor Credentialing and expose the system for what it really is. I will propose solutions that will dramatically lower the cost of Sales Representative Registration and lead to a more open and accessible health care industry for vendors. I welcome input from fellow representatives both independent and company employed, as well as hospital personnel, vendor credentialing companies, and interested elected and government representatives.