The Affordable Care Act and other social and economic trends are transforming the healthcare landscape. As a result, hospitals are under significant pressure to reduce costs and improve quality.
We came across a Booz study addressing the changing times in healthcare. As the authors noted, hospitals and healthcare systems are taking another look at their structure and mission so they can remain viable going forward. The question at hand is what is the right “go to market” strategy in order to capture significant market share as an uncertain future unfolds.
The study suggests that customers want quality care, and they will make real choices about where to seek that care. In response hospitals will craft value propositions along these three dimensions – care, access, and cost.
- Care. Hospitals and health systems differentiating on the care dimension will offer cutting-edge research in a particular clinical area or best-in-class outcomes for a particular treatment. R&D Leaders will attract customers wanting the best available treatment and technology while Specialists will attract those seeking a provider with a single-minded focus on their condition and a track record for excellence in that specialty.
- Access. Local access to quality care will meet another need. The study suggests that hospitals and hospital systems leveraging this strategy fall into two groups – Convenience Kings who offer a full range of clinical services in their community-based facilities and Integrators who create value by weaving together fragmented healthcare landscape – coordinating patient care across the continuum.
- Cost. Hospitals and hospital systems following a cost strategy fall into three groups: Premium Properties serving consumers wanting the greatest comfort, privacy, convenience and service levels possible, Price Cutters offering the lowest price point for procedures while maintaining reasonably robust standards of quality, and Value Maximizers who focus on maximizing overall value at the lowest possible cost.
Few healthcare institutions will pursue only one of these value propositions – hybrids will be more common – like an R&D Leader also cultivating a Premium Price position or a Value Maximizer and a Convenience King.
So what does all this mean to MedTech companies? If a hospital adopts a specific value proposition, it is clear that what they buy, how they buy and what they are willing to pay for it all change.
On the sales side of the table that means you have to be aware of the change, understand the business and financial consequences of new value proposition, and most importantly adapt your selling process accordingly – that means in most case sales training needs to be invited to the party.
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