What\u2019s Happening Today?<\/h2>\n
The enterprise customer business model is changing with more focus on patient engagement, coordinated care, and improved outcomes. With the consolidations in the marketplace and the evolving business models, the pace of change has significantly increased. In addition to the consolidating marketplace engendering more and larger enterprise customers, the roles and business priorities of these customers that directly relate to pharmaceutical use are changing, such as:<\/p>\n
- \n
- Increased accountability\/risk sharing, which is driving a focus on higher quality and outcomes at lower cost.<\/li>\n
- Development of evidence-based disease management tools\/clinical pathways and the need to measure\/manage against them.<\/li>\n
- Investing in patient support beyond the traditional provider-patient appointments.<\/li>\n
- Discharge management and core coordination efforts in many disease areas.<\/li>\n<\/ul>\n
Historically, pharmaceutical companies have had challenges meeting the unique needs of these most sophisticated customers, and the performance within these groups continues to be a challenge. The traditional marketing model typically is not effective given the high proportion of \u201cno-see\u201d physicians and the increased decision-making at the institutional rather than individual physician level.<\/p>\n
A study by IQVIA showed:<\/p>\n
- \n
- 50% prescribing business flowed through IDNs.<\/li>\n
- IDNs reduced brand share by 20% to 25% nationally.<\/li>\n
- IDNs reduced overall Rx volume by about 10%.<\/li>\n<\/ul>\n
Deteriorating practice economics have triggered major changes to the structure of the delivery system. Private practice is eroding in favor of larger, hospital-affiliated settings (Figure 1), which is eroding returns from traditional physician details (Figure 2). The majority of U.S. physicians are now employed or affiliated with a hospital group or an insurer as a result of more practice mergers and hospital acquisitions.<\/p>\n
![\"\"](\"https:\/\/www.pm360online.com\/wp-content\/uploads\/2018\/07\/Figure-1-1024x768.jpg\")
<\/a>Private practice is eroding in favor of larger, hospital-affiliated settings as shown by this 40.6% increase in practice mergers and hospital acquisition combined over a seven-year span.<\/figcaption><\/figure>\n ![\"\"](\"https:\/\/www.pm360online.com\/wp-content\/uploads\/2018\/07\/Figure-2-1024x768.jpg\")
<\/a>The changing landscape is making traditional promotional tactics less effective. This graph shows how equivalent detailing effort has a different impact depending on IDN and physician affiliation.<\/figcaption><\/figure>\n The changing landscape is making traditional promotional tactics less effective. Equivalent detailing effort has a different impact depending on the IDN and physician affiliation<\/em>. New customers and organizational forms are exerting meaningful influence on prescribing dynamics. The impact of IDNs is growing, with integrated payer\/provider entities now exerting more influence on product selection than managed care in certain geographies. Although IDNs\u2019 control has steadily increased over time to a level comparable to that of payers, both nationally and locally, current investment in IDN access lags investment in payer access, a trend that will need to change going forward.<\/p>\n
Pharma companies now fully recognize the traditional commercial model is insufficient. As a result, a significant number of alternative elements have been trialed (both broadly applied and piloted), and continued change is on the horizon, with 83% of respondents expecting to further restructure their commercial model in the next two to three years based on our commercial survey conducted at the end of last year.<\/p>\n
In adopting these changes, alternative personal selling models (e.g., key account management for institutional providers) are deemed most successful. However, results have been more mixed on \u201cwhat\u201d is provided\u2014e.g., content, offerings, and services have not been as successful as expected. More broadly, pharma companies continue to wrestle with broader barriers to evolving the commercial approach.<\/p>\n
Pharma executives, in light of these results, need to:<\/p>\n
- \n
- Adopt and ensure best practice execution in strategic moves showing the most promise broadly.<\/li>\n
- \u201cRedesign\u201d the offerings, services, and digital models not yet delivering needed value (mainly through incorporating a more \u201ccustomer-centric\u201d view of value\/appreciation).<\/li>\n
- Address operational barriers required to evolve to a more complex and sophisticated commercial approach\u2014including setting goals and establishing metrics to determine the ROI of new commercial model pilot programs to guide future decision-making and investment.<\/li>\n<\/ul>\n
The Emergence of IDNs<\/h2>\n
The IDN customer may take on a variety of forms:<\/p>\n
- \n
- Non-integrated Group Practices and Hospitals.<\/strong> Examples: Hospital Corporation of America (HCA) and Tenet Healthcare.<\/em><\/li>\n
- Multi-specialty Group Practices, including or not including hospital affiliation.<\/strong> Examples: Harvard Vanguard Medical Associates, Atrius Health, Hill Physicians, Magellan Health Services, and International Multiple Sclerosis Management Practice.<\/em><\/li>\n
- Integrated Delivery Networks. <\/strong>Examples: Henry Ford Health System, Mayo Clinic, Barnabas Health, and Cleveland Clinic.<\/em><\/li>\n
- Fully Integrated Delivery and Financing Systems. <\/strong>Examples: Kaiser Permanent, Geisinger Health System, Banner Health Network, Optum Health, and Partners Healthcare.<\/em><\/li>\n<\/ul>\n
New organizational structures have arisen from existing regional differences: By early 2013, there were approximately 1,200 IDNs, a 70% increase in one and a half years. Customers bearing financial risk have growing economic incentives requiring evidence showing tangible value\u2014customer-centric evidence of real-world value<\/em> is becoming increasingly important, with emphasis on clinical efficacy, quality, and value.<\/p>\n
Strategies for Engagement<\/h2>\n
Engaging IDNs effectively requires a reconsideration of the traditional commercial model based on reach, frequency, and patient metrics. Embracing a more account-centric model is necessary to adapt to the growing influence of IDNs.<\/p>\n
Some examples of approaches emerging throughout the industry include:<\/p>\n
- \n
- Hybrid Sales Forces<\/strong> are being piloted and rolled out given that internal functions such as Sales Operations, Sales Analytics, and Marketing are under pressure to transcend traditional functional silos.<\/li>\n
- Managed Care Account Management<\/strong> are leveraging their skills and experience throughout commercial organizations.<\/li>\n
- Changes in internal business processes and analytical frameworks<\/strong> are being made to better emphasize the need as developing and deploying the right skills with which to engage IDNs is proving to be complex.<\/li>\n
- Localized Customer-centric Models<\/strong> are being applied as customers evolve, because it is critical to tailor engagement models to local needs using novel metrics beyond reach and frequency.<\/li>\n
- Outcomes-based approaches to marketing strategy and execution that can help align with customer priorities. <\/strong>Unlike the traditional approach\u2014which focuses on what growth opportunities will maximize product utilization; what behaviors to drive; what segments to target; how to activate those segments; how to go to market; and how to manage brand performance\u2014the outcomes-based approach focuses on:\n
- \n
- Customer-valued outcomes<\/em>: What outcomes are valued by direct customers and stakeholders.<\/li>\n
- Optimizing product utilization<\/em>: What outcomes will drive sustainable growth.<\/li>\n
- One view of the patient, physician, provider, and payer<\/em>: For which direct customer and stakeholder segments drive outcomes.<\/li>\n
- Engage on the customers\u2019 terms<\/em>: How to engage and motivate target segments to drive outcomes.<\/li>\n
- Strategy built to execute at the local level<\/em>: How to go to market locally.<\/li>\n
- Realize value in weeks not months<\/em>: How to measure outcomes and manage brand performance in real time.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
In our opinion, at least six critical elements to consider for an IDN engagement strategy assessment are:<\/p>\n
1. Customer Segmentation\u2014Segmenting IDN Accounts<\/h3>\n
To understand the range of maturity of IDNs, a behavioral segmentation is useful across key dimensions. It is also useful to understand IDN accounts on their operating priorities and structures:<\/p>\n
- \n
- Accounts that have different priorities\u2014what are they?<\/li>\n
- Are all needs equally valuable to address?<\/li>\n
- Which accounts align best with your therapy area capabilities?<\/li>\n
- How do brand strategies align with IDN needs?<\/li>\n
- How best to systematize ways of working to address priorities?<\/li>\n<\/ul>\n
2. Assess and Understand IDNs Operating Priorities<\/h3>\n
It is crucial to understand specific IDN objectives, reflecting their geographies, patient populations, organizational structures, payment models, and other operating drivers.<\/p>\n
- \n
- Patient engagement:<\/strong> Target the right intervention to the right patient\u2014the challenge is delivering more \u201cwow\u201d experiences to grow and retain the patient base. Design support mechanisms to engage patients in their care\u2014the challenge is investing in interventions that will deliver outcomes.<\/li>\n
- Physician engagement:<\/strong> Identify and establish best treatment practices\u2014the challenge is to identify treatment protocols based on meaningful evidence. Make decisions using evidence and value criteria\u2014the challenge is aligning physicians on care standards to improve quality and take out variation; use research linking genetics, biomarkers, imaging, etc.<\/li>\n
- Operational effectiveness: <\/strong>Identify and establish best treatment practices\u2014the challenge is using benchmark information to identify opportunities. Drive out care variation to lower costs\u2014the challenge is the right intervention for the right patient to avoid paying for ineffective care and improve care coordination collaboration.<\/li>\n<\/ul>\n
The key is to determine how to align the engagement approach and offerings with these objectives.<\/p>\n
3. Identify Key Decision-makers and Influencers<\/h3>\n
Leading institutions are establishing centers of excellence around patient experience and innovation. Engaging with IDNs will require engaging with many stakeholders within the system\u2014not only with traditional medical\/pharmacy directors and physicians at the practice levels but also with VPs for Innovation and Patient Safety, Directors of Innovation, CEOs of the health system, as well as CEOs of affiliated hospitals. Therefore, it is imperative that the engagement interface will have to be at the multi-stakeholder level rather than just at the physician level. Based on the changing healthcare landscape, provider decision-making is becoming more \u201ccorporatized.\u201d Evolution toward value orientation and centralized control (the \u201ccorporatized provider\u201d) demands some fundamental shifts in engaging with IDNs by pharma.<\/p>\n
4. Introduce Capabilities that IDNs Value<\/h3>\n
Segmentation of IDNs is a starting point. However, it is important to create a value proposition for each micro-segment of the IDNs, which is key to an effective engagement strategy (Figure 3). The value proposition should address the following aspects:<\/p>\n
- Physician engagement:<\/strong> Identify and establish best treatment practices\u2014the challenge is to identify treatment protocols based on meaningful evidence. Make decisions using evidence and value criteria\u2014the challenge is aligning physicians on care standards to improve quality and take out variation; use research linking genetics, biomarkers, imaging, etc.<\/li>\n
- Patient engagement:<\/strong> Target the right intervention to the right patient\u2014the challenge is delivering more \u201cwow\u201d experiences to grow and retain the patient base. Design support mechanisms to engage patients in their care\u2014the challenge is investing in interventions that will deliver outcomes.<\/li>\n
- Optimizing product utilization<\/em>: What outcomes will drive sustainable growth.<\/li>\n
- Managed Care Account Management<\/strong> are leveraging their skills and experience throughout commercial organizations.<\/li>\n
- Multi-specialty Group Practices, including or not including hospital affiliation.<\/strong> Examples: Harvard Vanguard Medical Associates, Atrius Health, Hill Physicians, Magellan Health Services, and International Multiple Sclerosis Management Practice.<\/em><\/li>\n
- Non-integrated Group Practices and Hospitals.<\/strong> Examples: Hospital Corporation of America (HCA) and Tenet Healthcare.<\/em><\/li>\n
![\"\"](\"https:\/\/www.pm360online.com\/wp-content\/uploads\/2018\/07\/Figure-1.jpg\")
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