10 Years of Changes in Healthcare Sales
I realized the other day while speaking with a business partner that I have been engaged in sales and support to healthcare providers for over 40 years. That was both exhilarating and depressing. How does one stay in one career for over half of their lifetime? Reflecting on where sales and healthcare providers are today versus way back at the beginning of my career, I found the last decade to be the most significant.
Sometimes it is easier to understand our life today by looking to the past. It might be interesting to both veterans and rookies to look back at the world of healthcare purchasing and sales practices to see what has influenced and impacted both areas.
In 2008 the American economy (in fact, most of the world) flipped upside down, impacting many industries and individuals. We had the bank bailout, housing market crash, auto manufacturers bailouts, and a dismal year for the stock market. Everyone seemed to be touched by the upheaval. 401Ks were often wiped out, individual stock portfolios diminished, credit access was frozen, businesses and people were hoarding what money they could as the future was looking very bleak. Following these momentous events, Barack Obama was elected the President of the United States and promised to bring back sanity to our economy and to revamp our healthcare systems.
It was that revamping and introduction of the Affordable Care Act or “Obamacare” that was to have the most direct impact on our American healthcare providers and on those who sell to them. The healthcare industry was uncertain of what impact the program was going to make and what it would mean to inpatient visits, reimbursement, and if it would truly reduce bad debt. Healthcare consumers were equally confused and unsure of changes to their insurance options and physician choices. This uncertainty led many providers to defer technology improvement and patients choosing not to seek the right care. This uncertainty from the healthcare provider resulted in uncertainty in those trying to sale to them as well.
There was another movement that impacted the life of both the customers and the sales representatives. Mergers and acquisitions started to occur at a rapid rate and continued to change the purchasing decision process. Suddenly, what may have been three stand alone hospitals is now a health system or Integrated Delivery Network (IDN). We also began to see the trend of outpatient services outpacing the demand for inpatient care. Not only were decisions being made at a “parent” level, the need to provide both support and services to the outpatient facilities was a reality. This further compounded the dilemma facing the sales professionals. Would each facility continue to make independent decisions, or would all purchases be centralized? Would they standardize on one product or service provider? Was cost the only differentiator in this new configuration?
Many medical device companies struggled to define the customer and it’s buying process. It was no longer safe to assume that long term relationships, incumbent status, or reputation were sufficient to meet the new needs. They had to revamp business models and sales processes. They had to change from focusing on products to focusing on solving customer needs.
As we have discussed many things changed the profile of the hospital over the last decade. The most significant being the economy conditions, Affordable Care Act, the shift to alternate sites of care, mergers and acquisitions, and ever declining reimbursements and increasing regulations.
All of these things’ present new challenges for those who sell products and services to the new configurations of healthcare providers. These are a few of the questions facing both individual reps and medical device and service companies as we move into the next decade of patient care.
- How do you align your product or services with solving the challenges and issues your customers face in 2018 and beyond?
- How do you adjust from being a product expert to be a problem solver?
- How do you configure your sales team to meet the needs of a traditional acute care provider who now owns subacute, post-acute, stand-alone surgery centers and clinics?
- How does your company and sales professionals develop a thorough understanding of what the challenges and priorities are?
The choice is clear. The profile of acute care providers and their processes has changed. We must do so as well. Being the lowest cost, being the incumbent, being the friend of supply, nursing, finance, or physicians is not necessarily enough in today’s environment.
Looking at the sales role and responsibilities in 2018 means doing significant client research and planning, acknowledging that customers may have already done their own research. They are looking for solutions and not features or benefit presentations. They want to know how you will help them solve problems, eliminate pain, and move forward with their initiatives of improving patient care, achieving cost reduction, and attracting and retaining talent. In a word or two, they want trusted problem solvers.
Please share your thoughts on what has changed for you as either a provider or sales professional since 2008 and what you think the next years will bring. Thank you for sharing your thoughts. We look forward to your comments.