In the Pink

May 15, 2005 9:30 PM  By

When you’re profiling the chief executive of an operation the size of SmartHealth, covering a mere day in the life just won’t cut it. That’s why our visit with Curt Hamann, M.D., president/ CEO of the healthcare products mailer, encompasses nearly two days.

Just how big is the $100 million-plus SmartHealth? The company produces 16 catalogs selling more than 20,000 SKUs of clinical supplies and more than 15,000 SKUs of business-building products to physicians, dentists, veterinarians, and real estate professionals. It is spread across seven buildings in Phoenix as well as drop-ship facilities in California, Tennessee, and Georgia, not to mention four healthcare apparel stores in California and Arizona, operations in Calgary, manufacturing facilities throughout Asia, and a division in Japan. SmartHealth is also the largest commercial printer in Arizona, even though it doesn’t print its core catalogs inhouse.

You haven’t heard of SmartHealth? You’re not alone. The family-owned business keeps a low profile, except among the dentists, OB-GYNs, dermatologists, veterinarians, opticians, chiropractors, medical technicians, and real estate professionals who buy appointment cards, germicides, dental alloys, patient history forms, promotional mugs, scrubs, and myriad other products from the company.

SmartHealth wasn’t always such a wide-reaching company. In fact, it wasn’t always called SmartHealth. When Jim and Naomi Rhode founded the company it 1971, they named it Semantodontics, and it sold printed and promotional materials for healthcare providers. It didn’t expand into gloves and clinical supplies until 1984. The company changed its name in 1997; in 1998 it reached beyond the medical/dental market with the launch of SellSmart, which sells personalized marketing and promotional products to real estate professionals. The next year the Rhodes sold a majority of the business to their daughter, Beth Rhode Hamann, DDS, and her husband, Curt.

A compact man with vaguely rust-colored hair, Hamman is in town only about two weeks each month. The rest of the time he’s overseas meeting with partners and suppliers or visiting SmartHealth facilities; speaking at conferences nationwide on infection control and contact dermatitis; or volunteering at a clinic in Central America.

This particular week in mid-January, Hamann is in Phoenix. As usual when he’s in town, his days are jam-packed with meetings.

WEDNESDAY, 3PM

Hamann meets in his office with vice president of marketing David Kline, director of marketing Greg Banks, and director of creative services Michael Muscarella to discuss the schedule for the Art of Skin catalog the company plans to launch in September. Though it has a prime view of Piestewa (formerly Squaw) Peak, Hamann’s office isn’t huge. It is cluttered, though, with magazine and newspaper clippings, with photos of his tow-headed family, and with shelves and stacks of books that range from Atlas Shrugged to Dental Practice Tool Kit.

Art of Skin is the dermatological version of Art of Smile, a 32-page catalog launched in 2002 to sell appointment cards, wall decor, statement inserts, and the like to dental professionals offering cosmetic treatments. The new book will mail to dermatologists, plastic surgeons, and doctors who prescribe cosmetic treatments such as Botox. “We’re looking to a whole line of products for the physician who’s looking to get discretionary procedures,” Hamann explains. Because the catalog will target doctors with a well-heeled clientele, the creative has to project an upscale inage — a look that Hamann feels Art of Smile fell short of.

A dose of preventive medicine is in order: “What I do not want to happen is get a bunch of stock photography” and then have a competitor “knocking us off,” Hamann says, quietly but forcibly. He wants to be involved in the photo shoots for the products themselves — the posters, the reminder postcards, and the other business-building materials — as well as for the catalog.

The team starts discussing dates for the photo shoot. It needs to be no later than April so that the merchandise can be created by midsummer. Hamann pulls out not a BlackBerry or an elaborate daybook but rather a dog-eared calendar with a worn leather cover.

The discussion shifts to the name of the title. Not everyone likes “Art of Skin.” Kline thinks it sounds pornographic; Banks says it sounds like the name of a tattoo parlor: “It needs to simultaneously appeal to the plastic surgery folks and the dermatology folks.” They schedule a follow-up meeting.

(Ultimately they stick with Art of Skin. Says Kline: “We conducted some research and found the Art of Skin name well received by the target audience.”)

4PM

Chief financial officer Dan Nahom, director of acquisition integration James Lanphere, and vice president of sales Scott Maloney come to Hamann’s office to discuss the integration of Allerderm, which SmartHealth acquired the previous spring. Allerderm sells, as its Website puts it, “unique skin diagnostic, treatment, and prevention products” to both consumers and physicians.

The first “dump” of Allerderm’s house file — some 30,000 records — showed that most of the names were new to SmartHealth’s database. The order-taking capabilities will migrate from Allerderm’s former parent company, Cardinal Health, to SmartHealth the following week, and everyone wants to be sure that the transition appears seamless to customers. “I don’t want the customer to think that anything’s changed, except that everything’s better than before,” says Lanphere. The SmartHealth inbound telemarketing team will be “inheriting” about 40 calls a day from customers and prospects.

The primary inbound/outbound call center is in the same building as the executive offices. This main building also houses the catalog design and product design departments, the printing facilities, and the warehouse for fulfillment of paper products such as the reminder cards. It’s dubbed the Saguaro campus; all seven Phoenix SmartHealth buildings are named after varieties of cactus, as Hamann is, in addition to a physician and a president/CEO, not to mention the father of six children, a leading cactus collector and expert.

While order-taking is coming inhouse, fulfillment of the Allerderm line, whose keystone product is the T.R.U.E. Test kit of premixed allergens, is not. Cardinal is still handling that from its Tennessee distribution center, as the product is classified as an FDA-regulated biologic and therefore requires specific storage processing. So while invoices used to be sent in the same package as the product, they’ll now be sent under separate cover from SmartHealth. Hamann reminds Lanphere that customers need to be informed of the change.

Cardinal didn’t charge shipping for Allerderm; SmartHealth is preparing to implement a $12.95 flat shipping fee in February. And the company will no longer accept returns that are the fault of the customer. The executives discuss training the phone reps to explain the new policies and giving them latitude regarding waiving fees during the transition.

5PM

While the workday is just about over here in Phoenix, in Japan the next workday is just beginning, making this a suitable time for a teleconference with SmartPractice Japan, an affiliate launched in fall 2001.

Hamann and Nahom head downstairs to the cafeteria/training room, where a computer and phones have been set up for the conference call. Several other team members are already huddled around the white laptop and speakers atop one of the pristine tables. When the executives in Japan become visible on the computer screen, Hamann bows forward slightly in his chair and greets them in Japanese, then nods at their greeting in return.

The primary purpose of today’s call is to discuss the creation of Disney-licensed products in Japan. The meeting, like the others led by Hamann today, is brisk and to the point, but not rushed or dismissive. By 5:25, Hamann and the Japanese execs have signed off, and Hamann is off to dinner with his family.

THURSDAY, 8:45AM

Hamann is at his desk, checking his e-mail and speaking on the phone in Spanish. He’s dressed slightly less casually than he had been yesterday, wearing a jacket and a dark scoop-neck shirt instead of the striped Lauren polo shirt of the day before.

9:07AM

The first meeting of the day is devoted to an update on the company’s humanitarian efforts. SmartHealth, which partners with 20-30 nonprofit groups worldwide, is trying to ship 500,000 boxes of rubber gloves to post-tsunami Indonesia. Red tape is delaying the transport of the gloves from SmartHealth’s Asian factories.

“It’s just a question of working out the logistics,” says Mark Walker, senior representative from MAP International, a Christian-based humanitarian group that has worked with Hamann on several initiatives. “They need those gloves just to haul corpses around.” Hamann consults an atlas to point out the locations of the company’s Asian factories and routes the gloves would have to take.

The meeting with Walker had been scheduled before the tsunami struck, to discuss Café por Favor, an initiative to help independent coffee growers in Central and South America. Also present is Kevin Causey, SmartHealth’s director of e-commerce and, as Hamann puts it, the “curator” of the company’s microsite dedicated to its partnerships with nonprofits.

Hamann is more forthcoming about his nonprofit work in Guatemala and Honduras than he has been about SmartHealth per se. In 1976 he traveled to Honduras to work in a clinic there, “to determine whether I wanted to be a physician.” Why Honduras? “Well, I spoke Spanish, and some people at my church knew of this doctor down there who needed some help, and I figured, Why not? … It was providence.” In the years since, Hamann and his wife have gone back to the Honduran community to donate services and other assistance 50-60 times.

10:10AM

The second meeting of the day, to discuss the Allerderm Website with Causey, starts 10 minutes late. Hamann wants to improve the online presence of the brand and use the site to connect dermatologists with dentists who suffer from dermatitis. Dermatitis is an occupational hazard for dentists, whose hands are constantly in contact with latex, liquids, and chemicals. About 20% of SmartHealth’s 65,000 dental customers, says Hamann, suffer from contact dermatitis in a 12-month period. He wants to drive dentists to the revamped Allerderm Website, scheduled to launch Feb. 1, to find dermatologists specializing in allergies; he also wants the site to feed referrals to Allerderm customers.

“The benefit’s going to be happy customers on the dental side that we can help with their problem,” Hamann says. “The benefit on the derma side is going to be referrals to our customers to build their business and keep them buying products.”

11AM

Hamann is scheduled to meet with Brian Fairrington, a political cartoonist for the Arizona Republic who also draws SmartHealth’s proprietary Off the Chart cartoons. The strip, which Hamann describes as “the Dilbert of dentistry,” runs monthly in five dental trade magazines; the cartoons are also e-mailed to opt-in customers weekly and have been compiled into a calendar.

But Fairrington is late — apparently a not-unusual occurrence. This time, though, he has a valid excuse: a flat tire. Hamann uses the time to check his e-mail.

11:20AM

Fairrington finally arrives; he and Hamann are joined by senior product manager Karen Burk and Hamann’s executive assistant, Nancy Hillrich. Hamann asks Fairrington about creating an Off the Chart compilation book: “Can you do that and still keep pace with the pace we’re already behind?” he says, only half-joking.

The team brainstorm cartoon concepts. The goal is to come up with a month’s worth. Hamann stresses that he wants the strips to be more timely and pegged into current events.

1:05PM

The brainstorming meeting ends a half-hour later than scheduled. Next on the agenda: a tour of the facilities. Hamann and David Kline lead the way downstairs to the printing facilities, where the clanging din of the presses competes with the pungent aroma of fresh ink. All the patient communications materials are printed and personalized here.

The printing facility leads directly to the distribution center for the printed goods, which also connects to the core call center. (A call center for the Scrubs uniform division is in another facility, along with the majority of the IT department.) A warehouse down the road is the DC for the majority of the clinical supplies. Most orders are picked and packed within 45 minutes after they’re placed, Hamann says.

Yet another facility, the Octillo building, is where the mugs, magnets, name tags, plaques, and other promotional products are personalized and laminated. Another building houses mailroom services — SmartHealth will handle a customer’s entire integrated mailing process, from addressing the reminder cards, statement envelopes, and other collateral to distributing the promotional and communication pieces into the mailstream.

The last stop is a not-quite-finished facility that will house the creative, finance, and HR employees currently crammed in the main building. The new building will also provide more space for staff training and product development testing. It also has room for a dental office where Beth Hamann will provide dental care onsite — one of the perks received by SmartHealth’s local employees.

2:45PM

After a quick lunch and a few errands, yet another meeting about Allerderm begins, 45 minutes late. Joining Hamann and Kline are director of creative service Muscarella and director of marketing Bruce Muller. In a previous meeting, Hamann says, he and Muller had a “healthy debate about product positioning and the differentiation between consumer products and medical products.” The debate continues here, as they try to determine whether gloves (98% of those carried by SmartHealth are proprietary) or lotions should be cross-sold with the T.R.U.E. Test and just how prominently the latter should be promoted at an upcoming trade show.

Hamann ends the meeting with a variation of the question he asks at the end of just about every meeting: “Do you have all the information you need from me?”

4:20PM

A meeting to discuss research surveys was supposed to have started an hour and 20 minutes ago; one to discuss plans for capturing e-mail addresses was to have begun at 4 o’clock. Rather than try to cram in the meetings, Hamann decides to reschedule them — he’s got to get home. But it’s not a night off: Tonight is a recognition party he and his wife are hosting at their home for SmartHealth’s management.

BY THE NUMBERS

Year founded 1972

Number of catalog titles 16, including SmartPractice books of patient communication and practice development products for dentists, veterinarians, chiropractic professionals, medical professionals, and eye care professionals; SmartPractice Dental Supplies; SellSmart, “marketing tools for real estate professionals”; SmartScrubs; Art of Smile; SmartBuys, “your source for clinical products and savings!”; and SmartHands Glove Catalog

Number of SKUs more than 35,000

Size of SmartPractice buyer file 112,098 (source: Direct Media data card)

Number of full-time employees approximately 560, including 425 in Arizona