Copyright ©2002 Canon Communications
An Opportunity to Educate
Richard Manley
Manufacturers and specialty distributors have to work together to educate buyers about the cost—and savings—ramifications of new medical technologies.
For years, medical technology companies have been working to convince their
customers to focus on the long-term or life-cycle costs of their offerings,
rather than on the acquisition price of those products. Buyers may be cynical
about this approach, but only at their own peril.
The reality is that new medical
technologies are often priced higher than those they are meant to replace.
That’s why, in today’s cost-cutting environment, many providers have simply shut
their doors to such technologies.
This is the “hear no evil, see no
evil” approach to new-technology acquisition. Buyers with this mindset don’t
want to see anything that might increase their expenses, and they won’t even
consider the potential long-term savings that could result from adopting a new
device or technology. That’s a tough frame of mind for medtech marketers to
grapple with.
Overcoming Resistance
True, specialty distributors and
reps get paid to overcome such resistance. After all, they have the
relationships, the credibility, and the track record with providers. But they
are much more successful in their efforts if they and the manufacturers they
represent take the time to educate buyers on evaluating the cost-effectiveness
of new technologies.
What would such an education include?
Nancy Reaven, founder and president of Strategic Health Resources (La Canada,
CA), has asked herself this question. Her company helps makers and buyers of new
technologies quantify their value.
It makes sense that, before any other
consideration, new technology has to yield clinical results that equal or exceed
those of the existing technology or modality. One technology that specialty
distributors brought to market some years ago—the titanium suture anchor—reduced
the number of revision surgeries. Another technology—blood filtration
devices—offered protection against costly infections and adverse reactions to
blood transfusions. These were novel technologies at the time; now they are the
standard of care. Certainly, medtech executives can fill in many of their own
examples. This kind of clinical information can be documented.
Provided that such documentation is
presented in a clear, easy-to-understand format, distributors and manufacturers
can then help their customers consider a host of other (often economic) factors
surrounding new-technology acquisition, says Reaven.
Professional Purchasing
The medtech marketer’s main task must be to determine how the technology’s clinical benefits contribute to the hospital’s goals of improving patient care and improving profit. In order to understand the hospital’s profit potential, some basic information about the hospital’s economic situation needs to be understood. Key elements considered by buyers include the following.
Having considered all these variables, the buyer has to consider the impact of the technology on the following areas.
The process of selling medical technology is becoming increasingly complex, fueled in part by a more educated, health-conscious and Internet-savvy public. In response, hospitals have become smarter buyers. The days when clinicians—enamored of a new technology—could demand that it be brought into the hospital without delay, are numbered. Professional buyers are more involved than ever in making purchasing decisions, and clinicians themselves have grown to understand how their practice patterns—including the kind and amount of devices they use or consume during procedures—affect their hospitals’ margins.
Steps to Take
The Independent Medical
Distributors Association (IMDA) and its members are helping manufacturers to
spread the message that it pays to take the long view of technology costs.
Two years ago, for instance, IMDA
sponsored a presentation at the annual meeting of the Association for Healthcare
Resource and Materials Management (Chicago) on analytical techniques for
determining the cost-effectiveness of new technologies. This audience was chosen
because materials managers are the gatekeepers for many product and equipment
decisions in today’s hospitals. Most such managers are rewarded according to
their ability to reduce the current year’s supply budget by a certain
percentage, without regard to the potential for long-term savings. Consequently,
if they are to bring long-term savings to their facilities, they need an
understanding of the analytical tools required to measure such savings.
Since hospital CFOs are often the
source of pressure to reduce expenses, they represent another audience to be
educated – perhaps via their association, the Healthcare Financial Management
Association (Westchester, IL).
Finally, specialty manufacturers and
distributors currently have a singular opportunity to educate clinicians about
the cost-effectiveness of new technologies. Because of the financial pressures
on both hospitals and private practices, clinicians are more receptive to this
message than ever before. Assuming that quality of patient care is assured,
thoughtful, well-presented data on the ROI of new technology will help
clinicians to be able to choose overall cost-effectiveness above price savings.
Conclusion
If ever there were a time for cooperation between specialty distributors and manufacturers, it is today. If we fail to join together to educate our mutual customers about how to make smart purchasing decisions about new medical technologies, those same customers may retreat further into their “hear no evil, see no evil” approach to purchasing. And that’s not good—for patients, for providers, for distributors, or for manufacturers.
Richard Manley is president of CVC Inc. (Arlington, TX), a specialty sales and marketing company, and president of the Independent Medical Distributors Association (Mission, KS), the specialty sales and marketing association.
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