In 2011, Bain & Company published a study – The new cost-conscious doctor: Changing America’s health care landscape. The conclusion was summarized into one sentence: Rapidly shifting attitudes among physicians on critical issues such as managing costs, drug, and device usage, and standardized care are transforming health care business models.
The study introduced several key points that will be critical for anyone in medical sales – and for those responsible for designing their sales training. Let’s take a closer look.
Physicians are increasingly aware and concerned about health care costs. Interestingly, the study shares that “for the first time, a majority of physicians show an increased willingness to consider the cost implications of the products they use. They recognize a pressing need to adjust their clinical practices to accommodate health care cost considerations.”
The implications will be wide-reaching. Several will directly affect medical device sales:
1. Physicians increasingly see controlling costs as part of their job. They are looking for ways to contribute to improved practice procedures and hospital profitability by reducing the cost of medical devices and consumables and by decreasing the length of patient stays.
2. Physicians increasingly are advocating standardizing care as a way to address healthcare costs and are becoming more comfortable with more standardized care. With electronic access to care guidelines, adopting standardized care and using hospital checklists are increasing.
3. The number of smaller private practices are dwindling as physicians move to larger practices and hospital settings. The implications are significant for medical device sales: The “us vs. them” mentality between clinicians and administrators will be minimized. Rather, both will influence the guidelines and decisions as to which medical technology will be used. Five years ago, almost 40 percent of the physicians surveyed felt they had complete discretion over medical supply and device decisions. Fewer than one in five feel they will have the same control two years from today.
4. Traditionally, product improvement was defined as innovation … and physicians adopted new products and devices believing they were superior. Now physicians are more skeptical – requiring vendors to prove the efficacy of their superiority claims. Next generation products with incremental improvements will no longer command premium prices. As a result, physicians report they are less likely to try new products and one-quarter of the physicians report they’re less likely to try a new product as soon as it becomes available than they were 10 years ago.
Drivers behind this trend include concerns about long-term safety of new devices and payer restrictions on some devices. In addition, many physicians see the lack of differentiation between some medical device brands behind their unwillingness to try newer products – physicians want clear evidence of clinical differences and the economic value behind the new device before trying it.
5. No longer is innovation solely defined in terms of true clinical differentiation and patient outcomes. Rather, innovation will increasingly include products that while not having a differential clinical impact, they may improve healthcare economics – such as reducing costs or improving efficiencies. To succeed here, sales people must understand their customers’ operations – work flows and process – and strategic goals. So the solutions must be presented in terms of metrics important to the customer.
6. And, finally, the need for sales people to be able to communicate both clinical and economic impact will be increasingly important as both clinicians and administrators are involved in the sales process. This means there will be more in-depth conversations about profit and loss, supply chains, and other key business issues.
These physician behavior shifts are not temporary. They don’t expect buying behavior for new drugs and devices to revert to the old days. Rather “physicians are not just reacting to the recession or the recent healthcare reform debate … these findings represent systemic change.” To succeed, medical device sales people will have to move beyond its physician base and work more closely with CFOs and materials management than in previous times.
