Over recent years hospitals and health systems have developed and improved their practices and procedures for making purchase decisions for medical devices, with representation from clinical and administrative functions in formal decision-making structures.
The general trigger for evaluation of a new product/service is that an alternative is identified, the alternative product would typically be either an:
Companies who innovate tend to focus sales and marketing resource on clinician advocates, whereas vendors selling equivalent ‘me-too,’ products tend to focus on administrative/purchasing stakeholders to act as advocates within the decision-making structure.
Decision Making - Innovative Products
Decision Making - Equivalent Products
BUNDLED PAYMENTS: CHANGING THE VALUE PROPOSITION LANDSCAPE
Enhanced Patient Outcomes
The advent of bundled payment models creates opportunities for value propositions by extending the breadth of the episode and including metrics from sub-acute and post discharge environments (e.g. decreased morbidity/mortality, fewer complications, shortened stay/acute stay, fewer out of hospital interventions/outpatient visits etc.).
Bundled payments take a similar approach to patients as ‘equivalent’ product groups. In that they assume patients undergoing a procedure will respond in the same way (equal presentation). Providers clearly understand that this is not the case, as patients who are at higher risks/have comorbidities will end up costing them significantly more. This creates a major opportunity for healthcare value propositions demonstrating enhanced outcomes for specific patient types and sub-indications.
Manufacturers who identify patient categories or sub indications which do not follow the reference model (i.e. perform less well) can create specific value propositions around outcomes and justify usage of devices at higher prices.
Enhanced Patient Experience
Value propositions which show create better patient experiences, are easier to develop and can show significance with relatively small patient trials. However, justifying higher prices is difficult unless a clear link to patient compliance/ is shown to impact patient outcomes.
Bundled payment models linked to outcomes increase the focus on patient experience. Patient surveys rarely focus on devices but tend to include questions on communication/responsiveness of clinicians, pain management, and general satisfaction with the hospital. These outcomes can be influenced by the patient’s experience with medical devices and the support/training manufacturers provide to caregivers.
Purchasing decision makers tend to work in silos, therefore value propositions with potential up-scopes in efficiency may be perceived as irrelevant or even a threat. However, under bundled payment models value propositions, which explore efficiencies across departmental silos and extend outside the hospital across the episode of care will now have significant value (e.g. volume of devices used /cost of ownership, workflow, staff costs etc.)
Medical device manufacturers are now required to demonstrate their products increase patient value. IDR Medical recognises these needs, through having supported the launch of leading medical devices for over a decade of healthcare policy changes. We can help your firm demonstrate the added value of your devices, communicating the contribution to improved patient outcomes and care cycle cost reduction.
To learn more, check out our eBook on Value Based Payments, or if you would like an initial telephone discussion to understand how we can help your device take market share, do not hesitate to contact us.