Greg Caesar, senior director and partner at Medfluence Advisors, a custom healthcare consulting firm;
The healthcare landscape has changed dramatically since I first walked into an operating room in the early 2000s. Over the past two decades, with increased corporate participation in the healthcare industry (including the growth of integrated delivery networks (IDNs)), medical device manufacturers and their sales representatives have had to adapt their strategies to address new challenges while meeting the needs of today’s multi-stakeholder healthcare ecosystem.
Historical background and changing landscape
On my first day as a medical device salesperson, I helped a senior salesperson solve a problem with an endoscopic video camera system (while I watched). Back in 2003, salespeople were often thought of as problem solvers and solution providers, offering expertise that went far beyond the fancy sales aids marketing created for new products. Customers began reaching out to salespeople when considering purchasing a new capital product. Salespeople carefully considered which surgeons to introduce the new product to.
Skills, willingness to change, current product satisfaction, and competitive threats all factor into when and where to introduce new products to existing and new surgeons. We knew there would be work to be done in procurement to convince surgeons that our products and procedures would suit their tastes. But if physicians really like our product, it’s better for patients, and the price is right, we’ll get their business. IDNs, the self-contained healthcare ecosystems established in the 1970s, have begun to reshape the industry.
Approximately 80% of physicians in the United States are currently employed by hospitals or other legal entities, a stark contrast to the private practices of the past. This shift has given hospitals and legal entities more power over purchasing decisions and has significantly altered the influence that individual surgeons have over product selection.
Challenges in the New Healthcare Ecosystem
1. Less physician autonomy: Today, most physicians are employees and have limited influence over product choices. The corporatization of healthcare is forcing medical device organizations to shift their strategies to increase utilization.
2. Value Analysis Committees (VACs): Originally designed to review new technologies and limit duplication of product, VACs have become a significant barrier to entry for new medical devices. VACs require extensive paperwork, data, and cost justification, and often favor the status quo.
3. Value-based care and procurement: Hospitals are increasingly focusing on clinical and economic value in their investments. Salespeople must present value models that resonate with procurement and finance departments, along with clinical evidence sources, while aligning with corporate priorities.
4. Reach multiple stakeholders: Success is no longer determined solely by the support of surgeons. Sales and marketing must strive to create messages that address the needs of multiple stakeholders, including healthcare providers, finance departments and corporate decision makers.
5. Industry consolidation: The medical device industry is seeing an increase in mergers, acquisitions, and alliances, such as the recent acquisition of Acclarent by Integra LifeSciences and the very recently announced acquisition of Vertos Medical Inc. by Stryker. (Disclosure: I previously worked for Stryker.) Large healthcare organizations are ignoring regional preferences and reaching out directly to the sales forces of medical device manufacturers to ensure maximum value and align with corporate efforts.
Strategies for success in the new ecosystem
To succeed in this evolving environment, medical device sales professionals must:
1. Examine annual 10-K reports: Read publicly available annual reports to understand the priorities of key facilities. This knowledge will help you provide key influencers with information that will inform the objectives of company decision makers.
2. Understand value-based procurement: Don’t assume this means “cheaper.” Work with procurement to understand their goals and present products that align with their priorities while demonstrating both clinical and economic benefit.
3. Present a comprehensive value proposition: Communicate the clinical, strategic, and financial benefits of your device to HCPs before submitting a VAC request. Include a detailed list of products your device replaces and offer to accompany you to the VAC meeting. Make sure to have a product champion present at the VAC meeting.
4. Align with organizational goals: Regularly consult with your business’ strategic sales partners to understand the goals and constraints of your organization. Work together to create solutions that maximize value for both your company and your prospects.
5. Navigate GPO relationships: Decipher which group purchasing organizations (GPOs) are best suited for your device success and change your targeting accordingly.
Balancing perspectives
As you adapt to the new healthcare ecosystem, don’t forget the perspective of providers and patients.
• Physicians: Many physicians are frustrated by the loss of decision-making autonomy. Sales reps need to understand this challenge and focus on how their product can enhance patient care within the constraints of enterprise systems.
• Patients: The ultimate beneficiaries of medical devices often have limited say in product selection. Because these factors can influence a company’s decisions, sales strategies must emphasize how the device improves patient outcomes and quality of life.
The Future of Medical Device Sales
As the healthcare environment continues to evolve, successful medical device sales professionals must:
1. Develop a strong understanding of health economics and value-based care models.
2. Build relationships across multiple levels of the healthcare organization, from clinicians to executive leadership.
3. Use data analytics to demonstrate the long-term value of your product.
4. Stay agile, adaptable, and prepared to pivot your strategy as your industry changes.
The medical device sales landscape has changed dramatically over the past 20 years. Corporate Healthcare, IDNs, and GPOs have created new challenges, forcing sales professionals to adapt their strategies and interact with an ecosystem of multiple stakeholders. Succeeding in this new environment requires a holistic approach that addresses clinical, economic, and strategic value propositions.
Despite change and increasing pressure to meet quotas, many sales professionals are adapting to the modern healthcare environment and finding it challenging. Market volatility and performance pressures can lead to job stress and turnover, but for those willing to put in the effort to adapt, there are still opportunities to work with cutting edge technology and reap financial rewards.
Our fundamental purpose in the healthcare business is to enable care providers to improve the lives of their patients. Balancing corporate priorities with the needs of healthcare providers and patients helps medical device sales professionals navigate this complex landscape and continue to drive innovation in patient care.
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