Date post: | 11-Nov-2014 |
Category: |
Health & Medicine |
Upload: | gunter-wessels |
View: | 1,659 times |
Download: | 3 times |
© TIGI 2012 All rights reserved
5 Medical Device Strategies Doomed to Fail in 2012
Presented by Gunter Wessels, Ph.D., MBA
[email protected]@gunterwessels on twitter
Partner, TIGI
February 29, 2012MedDevice Group
© TIGI 2012 All rights reserved
Failure Defined
• Sluggish growth
• Market share decline
• Price/margin erosion
• Commoditization
• Diminished profitability
© TIGI 2012 All rights reserved
The Big 5
1. Pricing Confidentiality Agreements
2. Additional Salespeople
3. Geographic Market Assignment
4. Appeal to Physician Preference
5. Feature-Advantage-Benefit Sales and Marketing
© TIGI 2012 All rights reserved
1. Pricing Confidentiality Agreements
• Price Benchmarking
• Group Purchasing Organizations
© TIGI 2012 All rights reserved
Competing in Healthcare in 2012
Maximize
Maximize
Incr
ease
Off
set
Minimize
© TIGI 2012 All rights reserved
1. Pricing Confidentiality Agreements
Price Benchmarking
• Group Purchasing Organizations
• Consulting Organizations
• Federal Supply Schedule
© TIGI 2012 All rights reserved
1. Pricing Confidentiality Agreements
REMEDY:
• Controlled Pricing Policy
• Justified Product/Service Variants
• Specified GPO Agreements
• At-Risk Contracts
© TIGI 2012 All rights reserved
2. Additional Salespeople
• Market Consolidation
• Mergers & Acquisitions
© TIGI 2012 All rights reserved
U.S. Healthcare Spending$2.5 Trillion in 2009 and 2011
Investment $156B
Public Health $77B
Administration $163B
Durable Medical Equipment $78B
Home Healthcare $68B
Nursing Care Facilities $137B
Rx Drugs $250B
Dental & Other Care $292B Physician & Clinical Services $506B
Hospital Care $759B
© TIGI 2012 All rights reserved
Persistent Downward Trend
Number of Beds and Beds per 1,000 population
© TIGI 2012 All rights reserved
Stable
AHA Hospital Market5795 Registered Hospitals in 2009
Consolidating
Declining
Consolidating
© TIGI 2012 All rights reserved
Systemization in Acute Care
Number of U.S. Hospitals in Health Systems
© TIGI 2012 All rights reserved
3. Geographic Market Segmentation
© TIGI 2012 All rights reserved
3. Geographic Market Segmentation
Centralized vs. Local Control
• CMS rule draft favors centralized control
• Opposed by MD and RN groups; Favored by AHA and FACHE
© TIGI 2012 All rights reserved
Medicare Hospital Market
Critical Access Hospitals1290 Facilities
3.8% of Discharges
Source: Medpac 2011 based on 2009 Discharge and Facility Count Data
Large Urban1310 Facilities
45% of Discharges
Other Urban1092 Facilities
38% of Discharges
Rural Referral124 Facilities
4% of Discharges
Sole Community394 Facilities
6% of Discharges
Medicare Dependent195 Facilities
6% of Discharges
Rural <50 Beds102 Facilities
<1% of Discharges
Rural >50 Beds153 Facilities
2% of Discharges
4660 Medicare Providers in 2009
© TIGI 2012 All rights reserved
The Rise of Accountable Care
ACO Success Depends on Relationships and Power
“Appropriateness” of intervention & guiding Patient utilization
Cost vs Outcome of intervention
Speciality Group
Primary Care
PhysicianGroup
Hospital
Tertiary Care
Facility
Mental Health
Services
Home Health
Services
Multi-Speciality Group Practice
© TIGI 2012 All rights reserved
The Rise of Accountable Care
Beds/ 1,000 population Prominent ACOs
Source: Premier GPO News releases
© TIGI 2012 All rights reserved
ACO Distribution
ACO’s by State ACO’s by MSA
Source: Levitt Partners Analysis
© TIGI 2012 All rights reserved
ACOs are a “New Layer of Healthcare”
• An unseen care coordinating organization
• Built upon a powerful Physician group
• How will hospital executives react?
• If they run a tertiary facility
• If they run a community facility
• If they are a for-profit health system
• If they are a critical access facility
Evolved Care Delivery System
© TIGI 2012 All rights reserved
2. More Salespeople & 3. Geographic Market Segmentation
REMEDY:
• Integrated Coverage
• Corporate Accounts
• Flexible Resources
• Mobile Hyper-specialists
• Clinical, Operational, and Financial Focus
© TIGI 2012 All rights reserved
4. Appeal to Physician Preference
• Ray of Light for the Physician Payment Sunshine Act--Forbes
© TIGI 2012 All rights reserved
Physician Sunshine Act 2011
• Mandatory reporting of “Transfers of Value”
• Manufacturers and GPOs report
• Meals, travel, speaker fees etc.
• Includes Physician Owned Distributors
• Penalties are Fines for non-reporting and inaccurate or incomplete reporting
• Implementation delayed until 2012
© TIGI 2012 All rights reserved
Physician Sunshine Act 2011
• General Report Contents
• Name, Date, Associated Device, Drug etc.
• Type of contribution, including Charitable
• Anything over $10 is reported
• Physician Owned Distributors Reports
• Ownership attestation
• Investment disclosure
© TIGI 2012 All rights reserved
Physician Sunshine Act 2011
FINES
• Normal Failure to Report
• Minimum $1,000; Maximum $10,000 for each instance
• Maximum of $150,000 for annual failure to report
• Knowing Failure to Report
• Minimum $10,000 and Maximum $100,000 for each instance
• Maximum $1,000,000 annual failure to report
© TIGI 2012 All rights reserved
4. Appeal to Physician Preference
REMEDY
• Evidence-based Influencing
• IDN/IHN Focus
• Selling Economic Value
• GPO contracting and coverage
• Revised account management
© TIGI 2012 All rights reserved
5. Feature-Advantage-Benefit
© TIGI 2012 All rights reserved
REMEDY: A Balanced Approach
© TIGI 2012 All rights reserved
REMEDY: What are the Hurts
ClinicalUtility
OperationalEfficiency
FinancialPerformance
Department
Allocated Revenues and
Expenses
Equipment, Facilities,
Technology
Evidence-Based Medicine
Service Line
Favorable Market Conditions
Community Outreach and
Marketing
Definition of Services
Facility
Adequate EBITDA Margin
Staffing Skill-Mix Required
MD/RN/AH
Growing or Reducing
Services Offered
Capitalization, Debt Service,
Leverage, Acquisitions
Resource Coordination
Care Coordination and
Service Line Portfolios
IDN/System
Market Power Aggregation with
Suppliers and Payers
Shared Services and Process Outsourcing
Population Management
and Cooperation
ACO/Network
© TIGI 2012 All rights reserved
What to do...
1. Upgrade skills: Business Acumen, Evidence-Based Medicine, Salesmanship, RFP Strategy
2. Update the playbook: Corporate Accounts, GPO Contracts, Coverage Models
3. Revise the forecasts: Plan for Rebuilding, Customer Attrition, Margin Compression
4. Assess and Develop Talent: Specialists, Generalists, Managers, and Support
5. Commercialize Innovations: New Care Delivery Models, Improved Patient Flow, Increased Quality
© TIGI 2012 All rights reserved
Questions
© TIGI 2012 All rights reserved
Use Code: “2012MedDevice”
• $500 credit on a TIGI course
• $500 credit on a TIGI consultation
• A Hospital Clinical, Operational and Financial Profile Scorecard Report (Free)
As a participant today:
© TIGI 2012 All rights reserved
Thank You
Gunter Wessels, Ph.D. MBA
Partner & Healthcare Practice Principal
@gunterwessels on twitter
www.tigi.net
813-968-0070