By Patrick Flaherty and Joseph Haduch
Last month’s column, “Barriers to Change,” discussed the many obstacles HTM professionals, as well as countless other health care professionals, are needlessly forced to navigate when purchasing medical equipment, parts and service.
The article touched on four major factors that inhibit providers from efficiently and effectively serving patients with value-based technology solutions that deliver objectively proven outcomes or substantiated savings. The four barriers addressed in the article were:
While we identified why these are problematic, we did not address how to break through these barriers. At the request of many of you, this month’s article will share some tactics and techniques that will help you better navigate these burdensome supplier sales methods and strategies.
Divide and Conquer
This supplier strategy involves isolating the physician or administrator, believed to be the most politically powerful in the purchase of medical equipment, from the provider’s internal selection process. This is where HTM and their supply chain colleagues can make major contributions. It is vital that every health care provider have a stringent and inclusive equipment review process that involves ALL facets of the clinical selection process. This would include facilities, HTM, supply chain, finance, clinicians and ISD. Equipment purchases affect many aspects of the health care continuum. There needs to be collaboration and input from all stakeholders. In addition, we are often asked as HTM professionals, “How can I contradict our physicians when we evaluate and select medical equipment?” The answer; data, data and more data. It’s hard to argue with factual data, no matter your title or job description, and HTM departments should have volumes of it. Total cost of ownership, uptime, service costs, utilization and service hours are all critical components of evaluating equipment. Include ECRI data or other third-party, independent clinical evaluations as part of your analysis. Lastly, once you’ve established your equipment selection process, make sure your suppliers are aware and adhere to it. Sadly, we have, on more than one occasion, had to ban sales representatives from our organization because of their lack of respect for our internal processes.
Keep in mind that marketing departments for medical suppliers are no different than those promoting the Shake Weight and the Snuggie. They provide all the reasons, substantiated or not, why you need their specific product, no matter the product. We’ve discussed clinical equipment marketing with several different OEMs with the intent of directing marketing strategies toward clinical impact, however we’ve seen little change. Suppliers need to stop leading with better, faster and smarter in favor of substantiated and guaranteed metrics related to system performance, objective outcomes and economic affordability. As an example, new imaging products may work faster, see more and improve current workflows, but does that translate into better outcomes? Instead of touting improved image quality, suppliers should address improving false positive and negative rates, the improvement of which would result in fewer follow ups, quicker diagnosis and lower costs. These claims can easily be measured and, more importantly, suppliers could easily determine the level of objective value this device would provide a care provider. If marketing claims are valid, suppliers shouldn’t have any issues with warranting metric-based performance as part of a purchase agreement. Currently, providers pay premium prices based on marketing claims, not guaranteed performance. This needs to change. HTM departments can help drive this change in collaboration with clinical teams to determine how clinical metrics are evaluated and drive overall system performance as part of supplier purchasing agreements.
Research and Development
R&D is the most taboo topic we are raising as it should never be part of a commercial decision. Supplier strategies which inappropriately incorporate R&D target physicians directly in order to convince them a better product is imminent and, more insidiously, draw a connection to the imminent sale in one of two ways: timing of access to the new product (buying now moves them up in the queue) or opportunity to be a investigator on the new product (physician believes commercial relationship increases odds of being selected). In both scenarios, the R&D process is leveraged for a sale as opposed to how effective R&D can better serve clinical needs. The taboo nature of R&D also creates another problem … it is generally divorced from the practical business elements like affordability and economically aligned outcome improvements, leading to differences which may or may not provide a material improvement in care delivery. Suppliers need to align R&D with value-based engineering to find solutions for real world problems rather than developing technology in search of a problem. How often have we seen new product technologies fail to gain reimbursement approval? Who should assume the risk for payment where no evidence of benefit is warranted by the supplier? Are providers refunded when newly developed technologies are not supported by insurers due to unsubstantiated benefit? What’s the point of the technology if payers will not reimburse and patients cannot afford? You may be wondering what HTM has to do with R&D. In her book “Managing Medical Devices within a Regulatory Framework” Beth Ann Fiedler suggests: “CE (clinical engineering) participation earlier in the technology introduction/product life cycle has the potential to improve clinical trial data premarketing and promote the collection of longitudinal information.” Clinical engineering’s involvement early in the development process would help avoid unnecessary technologies and improve equipment safety and ease of use for end users based on the engineer’s experience in a clinical environment.
GPO and Government
Perhaps the biggest fallacy in all of health care with respect to equipment and service purchasing is the, “We cannot do better than our government contracts.” Anyone involved in any equipment contract negotiation has no doubt experienced this tactic. For some, it means the end of the line. “I’m getting government pricing, that’s the best they can legally do.” This is untrue. Suppliers are only obligated to government pricing based on the exact conditions of that contract. If a care provider is including any other considerations within their agreement or are offering any additional benefit to the supplier other than the purchase, it is highly likely that an argument can be successfully made that it cannot be compared to the government contract. Suppliers are free to negotiate at will, but frequently use government contracts as reason not to negotiate in good faith. General Purchasing Organizations (GPOs) are another veil suppliers will hide behind to avoid local provider negotiation. GPO contracted pricing is based on the GPO’s ability to provide volume for suppliers, while leveraging lower costs for smaller providers. It does not prevent suppliers from contracting at a local level, nor does it set a “pricing floor” for independent providers. Don’t be fooled.
We are transitioning to a new era in health care that has yet to be defined. Many will go kicking and screaming as they try to protect gross profit margins and high revenue streams while continuing to employ age old sales strategies. Though they may portray themselves as partners or collaborative, any supplier that implements any of the common tactics described here are nothing more than transactional companies driven purely by what they can get from you today. HTM can help providers define this new strategic era in health care by better understanding supplier obligations, providing essential clinical and service data to the equipment purchasing and evaluation process while collaborating with key stakeholders across their own organizations to standardize their purchasing process and maximize their medical equipment spend.
Patrick Flaherty is the vice president of operations for UPMC BioTronics. Joseph Haduch, MBA, MS, is the senior director of clinical engineering for UPMC BioTronics. The views expressed here are those of the authors and do not necessarily represent or reflect the views of TechNation or MD Publishing.
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