Making Contracts Work

Once an agreement is signed, then the tough (but rewarding) work begins

Patric Merritt, senior director of national accounts and strategic alliances for Cantel, was recently named National Account Executive of the Year by the Association of National Accounts Executives. The Journal of Healthcare Contracting interviewed Merritt and found that, all things considered, the job of the national account director isn’t all that different from that of the supply chain executive.

For both, negotiating win-win contracts is essential. But the tough part is what follows – making those contracts work. For the national account director, that includes introducing the contract to GPO members, promoting standardization as a key to operational and clinical efficiencies, and continually monitoring members’ participation in the contract.

It’s selling. And it sounds a lot like a supply chain executive’s job, doesn’t it?

Following is an edited version of the interview.

The Journal of Healthcare Contracting: A little bit of bio.

Patric Merritt: I grew up in Waco, Texas, and graduated high school in 1982. I went to Texas Tech University and received a bachelor’s degree in business administration in marketing in 1986.

Prior to my medical career, I was fortunate to have world-class training in the grocery industry with Colgate-Palmolive and M&M Mars, who taught me how to ask questions, listen and provide solutions for customers.

My first job was a territory manager for Colgate-Palmolive in Oklahoma City. I was named Rookie of the Year after my first year. Then M&M Mars hired me to manage four clinical specialists and also a large national account grocery wholesale distributor named Skivner.

While at M&M Mars, I finished my MBA, attending off-campus night classes, from Oklahoma City University. I was promoted to key account director in Dallas, where I managed the Albertsons and Winn Dixie corporate accounts. In my fourth year at M&M Mars, I was named Key Account Director of the Year out of 600 other directors around the U.S.

I began my medical sales career in 1992 as a territory manager for Boston Scientific. For the next two years I carried a bag and won President’s Club, Founder’s Club, National Contest Winner of the Year, 1st Place Bonus Award and Best Presentation Award. I was promoted to region manager, with responsibility for eight reps in a 10-state area.

Between 1997 and 2004, I directed sales for two start-up medical companies: Urologix (minimally invasive products for the treatment of urological disorders) and Neothermia (minimally invasive devices for detecting breast cancer). It was at Urologix that I learned how to sell to the C-suite; that’s because we had a $150,000 piece of capital equipment along with our disposable technology.

JHC: Tell the JHC readers something they probably don’t know about the challenges of bringing a new product to market.

Merritt: I love launching new products. They usually represent clinical and technological breakthroughs, which lead to substantially different ways of treating patients. You have to be able to communicate this difference and show key doctors and RN staff a “new way/innovation.” In new-product launches, you are either selling a different technology in an existing segment of a developed market, or you are creating a new market that has not been developed. The latter is more difficult, but it also is more rewarding.

JHC: In what ways does the national account role differ from that of a territory manager?

Merritt: Our company’s core competency is infection prevention and control. Our territory manager’s responsibilities are much more clinical in nature than mine. Their role is to support and assist the physicians, RNs and staff to drive cost-effective, clinical solutions for patients. They create remarkable relationships, and through our education and training programs, they share with caregivers the most up-to-date society guidelines on infection prevention and control.

My role is more financially focused with regard to providing a comprehensive program that assists an IDN with its goals and objectives regarding infection prevention. I build strong relationships with key sourcing and contracting personnel to help develop, implement and manage all aspects of broad GPO and IDN agreements. In my role, I am discussing a customer’s three-to-five-year plan toward standardization and reducing clinical variation, while providing quality products that add value.

By 2020, supply costs will most likely eclipse labor as the largest expense in a hospital or health system. So my conversations are about improving financial, operational and clinical outcomes in the most cost-effective manner possible.

Nowadays, IDNs want to collaborate with suppliers who carry quality products across the board, who understand their pain points, and who provide significant value-added programs, such as staff training. We talk with trust and transparency about the long-term benefits of a particular program that improves total cost of ownership.

JHC: As a national account director, how do you help a national GPO keep its IDN members happy, even if those IDNs want a better price than the GPO contract allows?

Merritt: Ten percent of my time is spent with the national GPO; the rest is spent talking to IDNs about savings goals, operational efficiency goals, and standardizing to our products. By standardizing, they reduce clinical variation, and they improve quality, efficiency and staff satisfaction. I like to say that the No. 1 enemy of quality is clinical variation. If an IDN commits to our product line, that is, if I know we have the business, we will offer better pricing to them.

JHC: What does it take to “work” a contract?

Merritt: I always advocate getting an announcement out to IDN members when the agreement is signed. That can be done with a letter (under the GPO’s letterhead) or webinar.

If the agreement is a win-win, and everyone knows the expectations and danger zones upfront, together we can more easily maximize the agreement moving forward. For large IDNs to meet and exceed their goals and objectives, there must be constant communication to review what is working and what isn’t. After all, getting one hospital to comply with a contract is difficult enough; but getting 10, 20 or 30 to comply is harder still.

Quarterly business reviews with the supply chain director are essential. These give us a chance to review sales and identify facilities that not complying with the contract. I have found that if I take the time to develop a true collaborative relationship with the IDN, they will address those issues as they arise.

JHC: Anything else to share about the role of the national account director?

Merritt: I have been at Cantel over three and a half years. I truly love my job, our team and the culture here. A lot of people don’t know the many talented internal team members at Cantel who do the hard work. Those team members in finance, legal, marketing and compliance make us look good in front of our key customers. They deserve a ton of the credit.

Finally, this is a job that is constantly changing. All the consolidation and mergers/acquisitions keep you on your toes and you have to be strategic with situations that involve multiple agreements across multiple IDNs.