Today’s Medtech world is quickly evolving due to the ACA, industry consolidating, and aging portfolios. Many companies are looking within the industry to understand what types of methods exist in the field to evolve with these events. These changes are causing the landscape of healthcare to shift from a production based economic model to a value based model. The value based model is driving the rise in competitive pricing, price transparency, and new pricing strategies like capitated pricing. This means that sales account managers and their management team are constantly working to improve their sales and operations process to remain competitively relevant.
Another common issue caused by the rapidly changing environment is master data management. An audit finding of the top 20 global Medtech firms found that poor data quality management was causing a 37% overpayment in GPO fees for 2014. The overpayment is a combined result of a lack of analytics on customer compliance and duplications of customer records within the manufacturer’s customer master. The need for manufacturers to have best practices and stream lined systems are becoming more apparent. So how can small to large manufacturers within the Medtech space address this?
- Hire the Right People. Invest in hiring the right people and ensure they have the tools to be successful. This is often a time consuming activity, but one that drives the success of the program.
- Invest in Analytics. Not every customer you do business with, whether hospital, system or clinic, deserves the coverage they ask for. Being able to see compliance trends and purchase performance from your customers is key in maintaining price value.
- Clean Up Master Data. A manufacturer can invest in all the analytics it wants, but if the master data behind it is incorrect, the analytics is worthless. Ensuring that the customer master is clean and that there is uniformity across divisions helps eradicate the duplicate customer or multiple pricing issues that can lead to overpayment. Additionally, a clean master data helps analytics drive negotiations to understand which customers really deserves the incentives offered.
- Invest in Backend Systems. Excel spreadsheets and home grown systems struggle with keeping pace with the evolving market. There is a growing need to have a single instance within a single division and across all other divisions to ensure that items like master data and contract operations are executed effectively and efficiently.
- Know Your Customer. Take the time to get to know your customer and their products. Listen to their pain points instead of just selling your product. Let the customer tell you what they think your product does and how they value it. It is important to maintain that relationship to prove your value.
These 5 key steps in the end remind us that relationships and the ability to change is key in keeping up with the rapidly changing market. Taking some time to truly look at these areas will better prepare manufacturers for finding stabilization and growth.