Sales Barriers Can Impede the Adoption of the Best New Technology
While many industry-leading futurists are predicting that the “patient will be at the core of innovation,” that scenario is hard to imagine with the barriers for new technology in place at many health systems, hospitals, ambulatory surgery facilities and physician clinics today. This is the result of healthcare environmental factors we see in the market. Careful planning and tactics are required to overcome many of these obstacles.
While consumerism is becoming a factor in healthcare today, many consumers still rely on the expertise and knowledge of their trusted physicians. That’s why knowledge of your products across the spectrum of healthcare is so important.
A whole host of sales barriers are arising in the marketplace, including customer (and consumer) access, bulking up of certain products in exchange for a rebate, more clinical investment by large medical device manufacturers, and the advent of interest in “risk-sharing” agreements. Here are some of the key market trends impacting the healthcare medical device market today, that make it such a complicated marketplace:
Consolidation of healthcare providers with more centralized control of their hospitals
- Hospitals and individual providers are consolidating into what will likely be no more than 200—300 major health systems in the next five years;
- This consolidation is leading to greater centralized control of both services and their supply chains, which makes gaining a sales foothold at individual sites increasingly difficult;
- Administrators at a central office are gaining a larger voice in which products are used. Physician “champions” for medical devices are a vanishing phenomenon.
- Expect to see hospital closures and bankruptcy increasing at a significant rate during the next 24 months or so. For example, over the past six months, 16 of “Becker’s Hospital Review” ‘Top 40’ most requested articles had to do with hospital closures and bankruptcies. That’s 40 percent.
- The services at smaller hospitals that are joining large systems will consolidate at their larger, more specialized facilities. All this adds up to fewer, and generally more important, sales targets.
Healthcare payors moving to quality from quantity of care
- The move to managing and measuring quality—and getting paid for it — will be the way of the future no matter which political party is in office;
- Manufacturers of new and improved technology must move beyond the qualitative features and benefits of their product into quantitative value. This will require significant analytical rigor to get your product’s story right.
Seasoned sales forces are expensive and becoming harder to find
- Recruiting and maintaining an experienced and qualified sales force is becoming extremely expensive;
- Continuous education of your sales force is critical—so they can relate to your customers and better understand the environment they are selling into;
- Having the right access and relationships at key provider corporate offices has never been more important than it is right now. You and your sales representatives can no longer afford to “learn on the job”.
Migration of patients out of the acute-care hospital
- Patients are now becoming better “consumers” of healthcare, and aligning their needs and desires with their healthcare provider is becoming increasingly important;
- For more than 50 years, the acute care hospital has been the center of the healthcare “universe”. That is all changing because providing care in the hospital has simply become too expensive;
- Hospitals are trying to “follow” their patients out the door, but many are struggling to find the right mix of products and services to do so;
- Increased interest by health systems on integrated solutions;
- It is crucial that medical device manufacturers understand how, when, where products are being used—and how they are going to get there.
More administrative control of new acquisitions and technology
- Administrators and non-clinical staff are making more product decisions today;
- Physician and clinician “champions” are disappearing in favor of committee-driven decisions at “new products committees” and “value analysis committees”;
- Even getting opportunities to present new products are becoming scarcer.
Pressure on provider costs continues to rise
- While many healthcare providers talk about Total Cost of Ownership (TCO) and Value Analysis (VA), it means widely different things to different providers;
- Having a clear strategy and process for third-party (insurance) reimbursement for device manufacturers’ products is becoming a vital part of the entire sales process;
- Increased customer focus on value—vis-à-vis clinical benefits of products;
- VA is often used as a barrier to new technology and to drive cost-avoidance;
- Crystal clear analysis and value propositions for new products is more important than ever.
GPOs and large medical device manufacturer “bundling”
- Pricing tiers, higher compliance programs and large product “bundles” promoted by large manufacturers and group purchasing organizations are effectively locking out the consideration of new products—often for years at a time;
- Product marketing materials need to “rise above” these factors, to differentiate new products in better, more meaningful, and quantifiable ways.
Perfect Your Value Proposition to Rise Above the Competition
For Today’s Value-Oriented Buyer, a Compelling Value Proposition is Key
Many new, valuable products and medical devices are being blocked from rapid market adoption because value-oriented buyers are demanding to see a clear reason to evaluate new products. At the same time, over-worked healthcare professionals just don’t have the time they once spent to consider a myriad of new products arriving on their desks each month. That’s why having a crystal-clear value message is becoming so crucial along the healthcare supply chain. In the past, having a physician champion “was enough”, but not any longer.
The length of documents explaining your value proposition is not the key anymore. Articulating your value with a simple, short, easy-to-read piece with supporting documentation is what’s needed. Here are a few suggestions for how to better position and polish your value proposition.
Go for Simplicity
You have probably noticed that people read less and less these days. While a video is nice, getting a solid level of interest is the first step. Therefore, using one page, with two sides printed, is often the best solution.
Sure, you may have a big story you are eager to tell—but don’t try to cram too much into this piece. Make the value clear so that it resonates with the customer.
Use Supporting Documentation that is Available—Not as Part of the Piece
Today, length of documents puts people off. While it may be tempting to consider making a video to tell your story, keep in mind they can be expensive, and it may be too early in your journey to shoot an effective one. Presenting facts, not flashy production techniques, is your first key to success.
Provide a Clear Explanation of Value that Covers All the Bases
It is always easy to consider the cost implications of new products, especially for supply chain executives. Today, you need to consider charge-revenue of your aspects, and how to tell the story of Total Cost of Ownership (TCO) right along with your expense story.
Give a Real-Life Success Story Grounded in Facts
Briefly tell the story of a success—like a satisfied customer and what they learned in their journey with your products. It brings a bit of humanity into the story and helps anchor the notion that others are already buying the product. Don’t stretch the truth—prospective customers always find out.