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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:Lsiedlick@sunriselab.comPhone 631-435-1515