Healthcare’s Changing Business and Practice Models. Implications?
In today’s healthcare environment, both the business model and practice model for healthcare providers have changed. Keeping with the law of cause-and-effect, these changes have forced practitioners to recalibrate their expectations of sales professionals in the healthcare market. Successful sales teams align themselves with these new expectations to deliver credible solutions to critical practice or patient issues that are based on the best available clinical evidence.
The Change Drivers
To understand what the new expectations are and how to align with them, we first need to look at the market pressures that are driving the changes.
From a business perspective, physicians and healthcare organizations (providers) must improve patient outcomes while decreasing the cost of care to maximize reimbursement. This means focusing on coordinated care to decrease redundancy and waste. From a practice perspective, they are charged with using the latest clinical evidence to drive consistency and use of the best treatment practices. In fact, U.S. regulatory changes provide both “push” and “pull” pressures that drive providers to adopt this model.
To pull providers into the model, the Medicare Shared Savings program from the Department of Health and Human Services creates incentives for provider networks (i.e. Accountable Care Organizations or ACO’s) to take on financial risk for the care they deliver and the population they serve. In return, these organizations can earn 50-60% of the cost of care savings that they create. To ensure quality care, these organizations must meet 33 specific quality standards within the year and meet several criteria, like “… define, establish, implement, and periodically update its processes to promote evidence-based medicine”.
To push providers to this new model, U.S. regulators have amped up the production of clinical evidence to provide clinicians with the data that they need to practice evidence-based medicine (EBM). In fact, new regulations called for the creation of the Patient-Centered Outcomes Research Institute (PCORI) and allocated approximately $5B in funding over a 10-year period to fulfill their mandate. The “mandate of the PCORI is to improve the quality and relevance of evidence available to help patients, caregivers, clinicians, employers, insurers, and policymakers make informed health decisions.” This means a significant addition to the amount of clinical data available in the market.
In light of the additional emphasis on clinical data, consider this. In 1996, the British Medical Journal published an article that touted that “medical knowledge would increase four-fold during a professional [medical] lifetime.” If multiple sources report that physicians are already overwhelmed with the amount of clinical data available, imagine the impact that an additional $5B in comparative effectiveness research (CER) will have on their ability to keep up with the latest clinical evidence.
So, what impact do these changes have on the expectations of providers in the healthcare market? With limited time, an overload of clinical data, and quality standards to meet, providers expect representatives to deliver value by doing more than selling a product. They expect a higher level of customer intimacy or situational fluency. This means understanding the organization’s goals, treatment protocols, and practice characteristics as well as understanding the impact of any recommended changes in the organization. They also expect representatives to have multiple touch points, marshal appropriate corporate resources, and provide objective clinical support based in the principles of evidence-based medicine for any recommended solutions.
Keep in mind that physicians are trained in medical school on the process of evidence-based medicine to analyze clinical data for validity, statistical, significance and clinical relevance. Additionally, they are being held accountable to integrate this process in their overall practice. However, in today’s fast-paced environment, they have little time to incorporate EBM into their daily practice. This is an opportunity for representatives to provide value to the provider. In fact, a recent white paper from Boston Consulting Group, Selling on Outcomes, stated: “Hospitals, drug companies, and device makers that cannot demonstrate that their procedures, medications, and products genuinely add value will suffer. Winners, by contrast, will be those that build sustainable competitive advantage through better access to, and analysis of, clinical data; through deeper insight about how to improve outcomes.”
Are your reps equipped?
Can your representatives accomplish this? To answer this question, Life Sciences companies are finding that the use of data analytics provides the needed understanding of the competencies that drive business. Once understood, they can then assess the proficiency level of their sales team for those competencies. This provides a clear, defensible picture of areas of developmental focus that can be measured. Companies are also reviewing (or adapting) their sales process to make sure it is aligned with the new buying paradigm of healthcare stakeholders. Additionally, these companies want to make sure that their representatives are speaking the language of their customer – the language of evidence-based medicine.