The healthcare environment continues to evolve and one thing is evident. That is, “the good old days” of marketing medical devices to only physicians/clinicians are gone forever. Marketing medical devices in today’s healthcare environment is just about as difficult as it gets. For years, marketing professionals could take the slightest differentiated qualities of a product and spin those differentiated qualities into unique features and benefits that would make that product the “must use” product for a particular treatment.
With the implementation of the Affordable Care Act, and the focus on delivering products that will improve quality and outcomes, products today must have clear, documented, and demonstrated outcomes. If not, one’s product will wind up in one of two buckets: A “commoditized product” lumped in with all other suppliers with similar products, or one in which a hospital or caregiver can simply do without the new product as the current product in use will suffice for now.
The Burden of Product Differentiation
The burden of providing product differentiation to the healthcare marketplace has clearly fallen on the shoulders of the medical device marketing professionals. The key issue is that most medical devices use the Predicate 510K FDA approval process to get products to market as quickly as possible. This process achieves the goal of getting a product to market expeditiously, but does not provide the outcome data that physicians/clinicians, value analysis committees, and supply chain executives are demanding before a product is allowed into their facility. Performing the necessary studies to prove certain quality, outcomes, and patient improvements take years. For most companies, the cost and time to complete these makes it too prohibitive.
So what are marketing professionals of medical devices to do? Medical device marketing professionals need to expand beyond a product’s typical features and benefits. Marketing techniques that easily got a product into a physician’s/clinician’s hands in the past will no longer work today.
The Total Marketing Approach
Changing to total marketing of a product’s capabilities is what is needed for today’s healthcare organizations! Marketing professionals need to think about their product(s) as follows:
- What market the product is entering, i.e., cardiology, orthopedics, etc. (certain areas such as cardiac, orthopedics, pharmaceuticals, trauma and spine are high on every hospital/systems list to reduce costs).
- What expanded “call points” can be introduced to market the product as well (finance, risk management, logistics, self-distribution and self-contracting system models, etc.)?
- What is the current competitive landscape?
- What is the current reimbursement environment?
- How to present to the Value Analysis Committee (VAC).
- How to generate physician/clinician support for the product.
- Non-clinical benefits of the product that can be sold and championed by supply chain within a hospital, system, or group today, while the longer clinical outcomes studies and data become available.
- How the medical device compares or differs from the current product(s) being used in the hospital/system.
- Most importantly—how will this product save the hospital, group, or system money—real money—Hard Dollars! Not the soft dollars that in the past could be used to differentiate one’s product(s). However, in today’s world, soft dollar value adds really don’t account for any value to the hospital/system.
The last point, unfortunately, is that the most important hospital/system focus is all about the “cost” of a product today. Physicians and clinicians are becoming more closely aligned with the hospitals’ or systems’ goals, either through employment or through realizing that they now must have “skin in the game” to help the hospital/system reduce costs.
Achieving Physician Alignment
In every survey done over the past few years with hospital/system CEOs, it is clear that their top goals/objectives include achieving closer alignment with physicians. Without physician alignment—basically without the physicians’ buy-in to the hospitals’/systems’ goals—cost savings cannot be achieved. The move toward physician alignment is growing and this is giving the supply chain the upper hand in their negotiations with medical device suppliers.
One key area to focus on with medical devices is supply chain. For years, medical device manufacturers allowed their reps to ignore supply chain and focus only on the physician/clinician. But for successful marketing of medical devices today, the focus needs to be on a specific supply chain. Supply chain has equal or more input/influence than the physician/clinician in what product(s) will get used in a facility today.
Supply chain has become extremely sophisticated in their approach to what, how, when, etc., a product will be used in their facilities.
Supply Chain Partnering
Supply chain is either working alone, or in most situations, partnering with their GPO and or consultants to focus on reducing costs. Hospitals/systems now have additional resources provided by their GPO or consultants and more importantly, data—and lots of it. Several transactional pricing databases are available today and supply chain relies on this information to drive commodization of medical device product pricing. Medical device manufacturers’ marketing professionals need to understand how supply chain and their resources are impacting the market. Market professionals need to be aware of and focused on the following:
- Don’t waste time trying to say the data is “wrong” because it is not wrong—it is as close to 100% accurate as it can be. The transactions that feed the database come directly from the hospital’s ERP system.
- Do focus on providing marketing tools to the field sales teams and teach them how to work with supply chain and how to use the data to differentiate products—and in particular, the impact on reimbursement.
- Do remember that the key is to keep in mind that the hospital/system supply chain has the data but the manufacturer has the “information”—there is a huge difference between data and information:
Having the information is the key to success when dealing with supply chain. What supply chain does not know about the price is:
- Why a price was given and was it for a reduction in suppliers?
- A specific market-share commitment, volume commitment, or other valuable aspects that a supplier is willing to negotiate price in return for the business.
Provide the Right Marketing Tools
Providing marketing tools to the field reps will enhance the ability to get one’s products into a hospital or system. Marketing medical devices does not start and stop with product features and benefits—it goes across the continuum of product usage. As stated earlier, it is beholden of the marketing professionals to look at the total cost of ownership of the product and market across the spectrum of value. Think about all aspects, product, inventory, logistics, supply chain, finance, risk management, and other key areas throughout the hospital/system that can be either directly or indirectly impacted by the product cost and/or usage.
In closing, as the most savvy of marketing professionals knows, marketing medical devices is a difficult task at best. Thinking outside of the box with a keen focus on others within the hospital/system besides physicians/clinicians is no longer a “nice-to-have” but a “must have” strategy. Do not underestimate the importance of marketing to physicians/clinicians. They are still very critical to market your products, too. However, the audience within the hospital/system needs to be expanded out to as many call points throughout the continuum of care that it comes into contact with, or has some influence over—whether or not your product will be allowed to be used in the hospital/system facilities.