A Key to Sales Success: Understanding Hospital Committees
By Ibby Smith Stofer
A lot has changed in how healthcare facilities evaluate and determine which products and services will ultimately be approved. Today, purchasing decisions are often made through formal committees coming to an agreement on what is the best fit for the needs of the facility. In healthcare, the sale of medical devices or services can be instantly killed by the committee that must approve projects and expenditures.
Knowing and understanding the responsibilities of committees is very important to the success of any sales representative in the acute care hospital realm. As a sales professional it is critical to understand the following questions: Do you know who the committees are? Do you know what they want, or need, and why?
Let’s take a look at the various committees and their structures commonly found in hospitals and Integrated Delivery Networks (IDN). Understanding these and then developing your action plans to work with the various committees can aid you in your sales process.
In hospitals and IDNs there are two types of committees: standing and special committees (often referred to as task forces). A standing committee can vary but will often include Finance, Quality, Audit and Compliance, as well as Strategic Planning, Physician Relations and Governance Representation. As the titles indicate, these committees are key to ongoing functions within healthcare facilities. The numbers of members can vary but it is generally considered to be a long-term assignment for each member.
Access to committee meetings is very limited and often restricted. However, you need to understand their influence, needs, and priorities. Medical devices and technology will most likely be first approved through one or more of the following special committees before being reviewed by the Finance Committee for final approval.
While the standing committees are very important to the healthcare providers, the special committees are especially key to the med-tech sales representatives. It is these committees that decide and recommend what to buy. Without succeeding to meet the needs of the various special committees, the deal will simply die in committee. Knowing the names and titles of the committee members, the charter and scope of their responsibilities, as well as their schedule and process are key steps in the sales process. Asking questions and understanding the issues that the customer is having, or the desired outcomes they are seeking will allow you to present how your company and product is the best choice.
The following are committee definitions given by Strategic Dynamics that are most relevant to the sale of medical devices and services.
1. Value Analysis Committee: Usually this type of committee is tasked with creating an organized approach to evaluating and selecting products and services in the context of cost effectiveness, patient safety and quality of care. These committees are designed to bring clinical and supply chain professionals together to fully utilize their combined expertise. This approach has been growing in the last few years and is often one of the final reviews before a request is submitted to finance for approval.
2. Capital Planning/Budget Committee: For our purposes, we are talking about medical capital equipment and the facility/infrastructure changes impacted with the planning and procurement of such items. Usually this type of committee is tasked with gathering a “wish list” of all the capital needs from the various departments and/or clinicians. Since there is never enough funding to secure everything on the “wish list”, the committee is tasked with paring down the list to match available funds. This committee will usually have C-Suite, Senior Level Clinicians, Facility Engineering, Quality Improvement and IT representatives as well as Finance representation.
3. Technology Assessment Committee or Medical Equipment Committee: Usually this type of committee is tasked with examining the medical, economic, social and ethical implications of the incremental value, diffusion and use of a medical technology in their healthcare system. These committees will usually have C-Suite and Senior Level Clinicians, Risk Management, and Quality Improvement representatives on the committee.
As an equipment sales professional you should be able to articulate the potential costs and issues that delaying can have to the committee members. This could include patient safety, clinician satisfaction, costs of maintenance and rental replacement. And don’t forget the impact of losing incentives your deal may include, and the impact of the rising interest rate market.
Many of you may feel like it is asking too much to understand and develop so much information about customers. That being said, it is important to realize that these committees are doing the same due diligence on you, your firm, and your competition. Committee decisions are one of the ways that providers are ensuring that personal relationships or historical purchasing processes do not result in higher costs. Selection is based on the best solution to meet clinical and patient needs while also managing costs.
Selling to a committee can be difficult since there are multiple personalities, opinions and desires but not understanding committees is sure to leave your deal on the committee meeting floor dying without your knowledge. As the dynamics impacting healthcare providers continues to change, the selection process has as well, and each of us must be willing to adjust our own process and preferences.