What Impacts the Sale of Medical Equipment and Software?
By Ibby Smith Stofer
Selling medical devices and software to healthcare providers can be challenging in times of reduced access to capital funds. The shift to outpatient surgery and care, reduced reimbursement, and patients bearing higher medical costs all impact where capital comes from and how it will be spent.
Understanding how your proposal fits within the hospital or system's strategic objectives, budgeting guidelines, as well as their needs and priorities, allows you to develop positioning that touches many departments and patients. Your offering will demonstrate to finance and clinical decision-makers your understanding of allocating capital for medical devices and software.
Here are some of the things you need to understand when selling to healthcare providers:
Understand Their Capital Purchasing Priorities
› Understanding what is considered capital is key for all medical device and software personnel. You may think that your potential sale is competing with another company that offers similar products. In reality, the decision to spend capital is competing with replacing or updating kitchen facilities, parking lots, acquisition of a surgery center or other higher priority capital projects.
Understand their Internal Approval Processes
› Knowing the dollar values used to classify capital-related requests is very important. Decisions in hospitals often fall into different budgets based on a defined dollar value. If the proposal is above their threshold, the process will be longer and involve more departments. Knowing the internal processes and approval requirements is a critical discovery step in the sales process for both approval and forecasting.
Understand the Facility’s Mission and Goals
› Aligning the proposal with the mission, strategies, and priorities of the organization will assist you to position it correctly with the finance team and CFO. In today's selection process, clinicians, supply, IT, and finance personnel come together to evaluate and recommend most medical device and software proposals. The capital allocation discussion requires team members to make trade-offs among mission, strategy, departmental preference, and financial return.
Always think about which areas your proposal impacts. Will it help reduce cost, improve clinical outcomes, efficiency, or patient care and satisfaction? Will it create problems with the remaining book value or how to dispose of current technology? Your positioning should support the CFO’s concerns. You need to be able to discuss how choosing your solution will impact the facility, staff, and patient care.
Things to consider in positioning your proposal:
- Financials including cost reduction and total costs
- Patient experience and expectations
- Quality of care and clinical outcomes
- Alignment with strategic growth objectives
- Employee growth or retention
- Integration or interoperability with existing systems
All of the above will have different priorities depending on the healthcare facility’s circumstances. Therefore, customize your proposal and conversations based on each customer’s need. You may find the following article helpful as you learn about the priorities and processes within hospitals.
2019 Healthcare CFO Outlook Performance Management Trends Priorities KaufmanHall