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5 Medical Device Strategies Doomed to Fail in 2012
Gunter Wessels, Ph.D., MBAPartner, Practice Principal, Total Innovation Group, Inc.
[email protected]@gunterwessels
Charlie Johnson, M.Ed., B.S.Consultant, Leadership Practice Principal,
Total Innovation Group, [email protected]
www.tigi.net
More>
July 25, 2012
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Sluggish growth
Market Share Decline
Price/Margin Erosion
Commoditization
Diminished profitability
Failure Defined
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Pricing Confidentiality Agreements
Additional Salespeople
Geographic Market Assignment
Appeal to Physician Preference
Feature-Advantage-Benefit Sales and Marketing
The First Big 5
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5 More Strategies That Will Fail
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Add Features and Launch Now
Go-Big - Win Big
Get KOLs - Trickle Down
Bet on Past Performers
Drive Activity - Skip Training
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Focus: New Product Features and Advancements
Add Features & Launch Now1
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Problem: Solutions are more contingent on customer capabilities than “more of” the same advances in resolution, speed, accuracy.
• Care delivery is evolving
• Workflow remains a challenge
• Automation is critical
• Disruptive innovations can win...but more closely matched solutions are key
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Add Features & Launch Now Remedy
Demonstrate the value of your solutions and claim the realization of your benefits.
• Clinical Capability Enhancement
• Operational Efficiency Improvement
• Financial Performance in Cost Reduction and Liability Avoidance
SM
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Focus: The Largest Customers or Potential Customers
Go Big - Win Big2
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Problem One: The healthcare market is growing and declining at different rates in different spaces.
Source: Medpac 2011 based on 2009 Discharge and Facility Count Data
28%
24%
3%9%
4%2%
3%
27%
Critical Access Hospitals1290 Facilities
3.8% of DischargesLarge Urban1310 Facilities
45% of Discharges
Other Urban1092 Facilities
38% of Discharges
Rural Referral124 Facilities
4% of Discharges
Sole Community394 Facilities
6% of Discharges
Medicare Dependent
195 Facilities6% of Discharges
Rural <50 Beds102 Facilities
<1% of Discharges
Rural >50 Beds153 Facilities
2% of Discharges
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AHA Hospital Market
Not For Profit50%
For Profit17%
State/Local Run19%
Federal4%
Psychiatric8%
Long Term Care2%
Prisons0.26%
Stable
5795 Registered Hospitals in 2009
Consolidating
Declining
Consolidating
Source: AHA ChartPack Data
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Problem Two: The largest and most capable organizations are incorporating the latest in care-delivery forms that reduce utilization, cut cost, and streamline care delivery.
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Go Big - Win Big RemedyDefine where your solution has the greatest positive impact in clinical, operational and financial benefits.
• The mid-market is straining; creating opportunity.
• The low-end of the market is evolving rapidly and creating new opportunities
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Focus: Engage Lead Users and Innovators
Get KOLs - Trickle Down3
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Problem: Many lead users and innovators do not represent your target market.
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Service Lines Dominate Healthcare Delivery
A Service Line is:
- A Center of Excellence- Focused on a patient population with a range of conditions and symptoms.- Engaged in meeting providers’ and patients’ needs for:
• Quality• Access• Convenience
Service Lines are comprehensive, “product lines” including:Screening & Prevention Diagnosis Treatment Aftercare support
Get KOLs - Trickle Down RemedyEngage Service Line Managers
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Focus: Hiring Your Best Competitor
Bet on Past Performers4
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Problem One: Your biggest competition is not the good people you bid against-- it is another project.
IT Project
Lean Project
Parking Deck
Investment
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Problem Two: “A” players don’t regularly leave their companies.
“Experience is more easily gained than sales skill.”-Herbert Greenberg, Ph.D.
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Bet on Past Performers Remedy
1. Recognize that the environment has changed
2. Re-examine your value in the “new normal”
3. Evolve your skills and understanding
4. Align sales and marketing activity
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Drive Activity - Skip Training5
Focus: Maximize Time-in-Territory and Defer Development and Training
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Problem One: Without a fundamental understanding of healthcare changes and their implications, you will struggle to remain relevant.
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Problem Two: The key to better performance is management, culture, and values.
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Drive Activity - Skip Training Remedy
1. Study your industry, not just your product and your competitors
2. Develop your healthcare business acumen
3. Focus on Sales Productivity Metrics; ROSI
4. Ask for help when you need it
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Recommendations: A Balanced Approach
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Developing Your Value: What are the Hurts?
ClinicalUtility
OperationalEfficiency
FinancialPerformance
Department
Allocated Revenues and
Expenses
Equipment, Facilities,
Technology
Evidence-Based Medicine
Service Line
Profit and Loss on the Service Line
Operations
Workflow, Patient Flow, Patient Experience
Enforce Protocols & Medical Policy
Across Departments
Facility
Optimize EBITDA Margin, and
Return on Assets
Optimize Staffing Skill-Mix Required
MD/RN/AH, Regulatory Compliance
Growing or Reducing
Services Offered
Capitalization, Debt Service,
Leverage, Acquisitions,
Project Justification
Resource Deployment &
Coordination of Assets
Care Coordination and
Service Line Portfolios
IDN/System
Market Power Aggregation with
Suppliers and Payers
Shared Services and Process Outsourcing
Delivering Accountable Care
to Populations, Disease
Management
ACO/Network
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➡ Upgrade skills: Business Acumen, Evidence-Based Medicine, Salesmanship, RFP Strategy
➡ Update the playbook: Corporate Accounts, GPO Contracts, Coverage Models
➡ Revise the forecasts: Plan for Rebuilding, Customer Attrition, Margin Compression
➡ Assess and Develop Talent: Specialists, Generalists, Managers, and Support
➡ Commercialize Innovations: New Care Delivery Models, Improved Patient Flow, Increased Quality
What to Do?
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Summary RecommendationsStrategic Recommendations
1. Balance your value proposition on Clinical, Operational, and Financial dimensions.2. Re-examine your value in the “new normal” & define where your solutions have the
greatest impact3. Examine the small, mid, and larger organizations for gaps and strategic fit4. Align sales and marketing activity5. Focus on Sales Productivity Metrics; ROSI
Tactical Recommendations
1. Target Service-Line Managers2. Recognize that the environment has changed and evolve your skills and understanding
a) Study your industry, not just your product and your competitorsb) Develop your healthcare business acumen
3. Ask for help when you need it
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As a participant today:
• Use Code: “2012MedDevice2”
• $500 credit on a TIGI course
• $500 credit on a TIGI consultation
• A Hospital Clinical, Operational and Financial Profile Scorecard Report (Free)
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Thank You
Gunter Wessels, Ph.D., MBAPartner, Practice Principal, TIGI
[email protected]@gunterwessels
Charlie Johnson, M.Ed. B.S.Consultant & Leadership
Practice [email protected]
www.tigi.net