Managed Care Insights

Managed Care as Customer
By Rita E. Numerof, PhD
Savvy pharma industry marketers know that focusing on the “physician-as-customer” has been key to the success of many healthcare organizations. While these companies have developed managed markets account teams over the years, they’ve only recently begun to acknowledge differences between the two audiences.

For product managers accountable for market performance and the underlying tools and positioning needed for commercial success, it’s critical to understand “managed-care-as-customer” and its implications.

Match Your Sales Approach to Your Audience Traditional commercial approaches to physicians rely on segmentation by prescribing decile, which drives call reach and frequency. This model reflects a relatively simple sale, characterized by a single decision-maker, reliance on features and benefits, and a “standard” product. Success is a function of sales efficiency. In other words, assuming the right targets, more calling generally results in more sales.

More complex sales are characterized by multiple decision-makers, a longer sales cycle, reliance on non-standard solutions and product value. Here, success is a function of sales effectiveness. In other words, developing long-term relationships in which the representative adds value in meeting the customer organization’s agenda is key to success. This is the model most appropriate to managed care.

Unfortunately, too many institutional sales organizations acknowledge that managed care is different, but practically speaking, apply the same tools that worked with physicians. This behavior is driven in part by a number of interconnected factors. First, the old model was enormously successful, and there’s a natural tendency to stay with what’s worked. Second, the vision of what it should look like isn’t always clear. In the face of uncertainty, once again the “tried-and-true” appears to have less risk than the alternative. Third, confronting the challenge of getting a managed care team skilled and in the field quickly tips the balance in favor of the tried and true. Plug and play is even better!

Finally, in the face of increased regulatory scrutiny, there’s pressure to ensure that all representatives don’t go beyond the label. This pressure makes it appear easier to manage this type of business risk by scripting representatives to “stay on message.” Again, the dynamic plays to the tried and true “universal” message.

Unfortunately, this is the very set of solutions destined to fail in dealing with the complex sale that managed care presents. What’s needed is the ability to diagnose institutional challenges and needs, develop rapport and credibility, and craft solutions within regulatory limits that truly address them.

How Well Are You Doing?
Here are some questions to consider as guides:

1. What’s the institutional agenda of your managed care accounts— both latent and manifest?

2. Who are the critical decision-makers and influencers? What access do you have to all of them? (Note: Access is highly dependent on the promise of value you can provide when given access.)

3. What solution sets can your company provide to meaningfully address institutional needs and mitigate risk for your managed care customer?

4. To what extent are you engaged with decision-makers to craft differentiated solutions?

5. What is your ability to orchestrate internal resources to truly leverage your company’s breadth of assets and deliver what you promise?

The key to developing strong managed care relationships starts with a redefinition of strategic accounts according to the capabilities they value, not the volume of product they currently buy. This redefinition changes the relationship and role of the account manager from contact person to trusted advisor.

It’s a different role that requires different competencies. Your best product detailers to physicians are likely to fail with the same approach to managed care accounts.

Dr. Numerof is President of Numerof & Associates, Inc., a strategic management consulting firm focused on organizations in dynamic, rapidly changing industries. She welcomes comments at info@nai-consulting.com.