Changing Healthcare Purchasing Decisions
By Ibby Smith Stofer
As the focus on healthcare continues to change, so does the purchasing decision process. The digital world of information has transformed the purchasing process for every purchase we make. Yesterday’s buyer will most likely look very different then buyers today!
During my career, I worked directly with both sales representatives and the hospital or IDN purchasing departments. My role was to be a liaison and facilitate the pricing, and terms and conditions for final agreements. My healthcare contacts included supply chain personnel, finance, and legal representatives. The role required me to balance the needs of the company I worked for and the customer.
While my career has changed, the process of decision-making has changed even more dramatically. A few years back, as the incumbent you could forecast with a high degree of certainty that your existing base of business would renew within 12 months of their agreement expiring or the end of any equipment’s useful life. In the hospital equipment realm, this is no longer guaranteed.
Today physician preference items are under tremendous scrutiny for both cost and effectiveness. The days of purchasing when physicians were an open door to equipment sales reps are all but forgotten memories. Not only does this make the job of the field-based rep frustrating, it requires the whole medical equipment company to understand the new way customers make purchasing decisions.
Some of these changes are best highlighted in the article How Hospital Administrators Make Purchase Decisions, published by Think Storage in 2013.
- 1. Only 42% of purchase decisions are initiated by user requests. The rest are driven because of aged or obsolete technology.
- 2. Buyers balance quality of care with the economics of their purchase.
» 3 out of 5 times the improvement of clinical outcomes can drive purchase decisions.
» Nearly half of purchase decisions are based on lowering cost.
- 3. There is less funding to attend trade shows or conferences. In addition to cost, they are often seen as too time consuming.
- 4. Decision processes have taken on a new strategic role with the rapid technology changes and the pharmaceutical industry not only bringing out new drugs, but also their skyrocketing costs.
Knowing these stats helps us understand the buyers of today. It helps us better see what they really need and want. Buyers want to improve clinical outcomes with new technology, all while lowering costs.
Another additional change in how medical equipment is purchased is that healthcare providers reach out to their colleagues who work for other hospitals and systems for their opinions. They get first hand insight into the products, service levels, sales reps, and post-sales support that comes with working with different companies.
The challenges that “the digital world of information” presents when selling medical equipment belongs not only to the sales representative, but to those supporting them as well. It is important that sales and marketing work together to define the value of their products and services in the terms that relate to the healthcare providers.
Selling to healthcare providers in 2018 and beyond is going to be an evolving process that requires companies to provide the information that buyers seek. Marketers need to continually assess whether they are delivering the right information to answer the questions and concerns of their customers. Sales must continually bring the voice of the customer to life. All departments must work together and be willing to change with the ever-changing world of healthcare equipment purchasing.