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    WRG Las Vegas Presentation WRG Las Vegas Presentation Presentation Transcript

    • The Long and Short of Medical Devices William McIlhargey WPM Enterprises Bruce Genovese, MD The Riner Group June, 2004
    • WORKSHOP OBJECTIVE
      • Consider issues surrounding medical devices and the existing barriers between the economic buyer and seller
      • Propose a short term approach to direct a a quid pro quo for both parties
      • Discuss long term insight on clinical resolution via model presentation
      • Conduct an interactive review of a case study approach
    • SCHEDULE
      • 9:00
      • 9:15
      • 9:30
      • 10:15
      • 10:30
      • 11:30
      • 12:00
      • Introductions
      • Overview of IMD marketplace
      • What can be done in the near term
      • Break
      • Recommendations for the long term
      • Case Study & Discussion
      • Adjourn
    • A Short Term Drive to Better Negotiations William McIlhargey Principal WPM Enterprises
    • MEDICAL DEVICES
      • Implantable Medical Devices
            • Pacemakers
            • Heart Valves
            • Stents
            • Hip & Knee Replacements
            • Defibrillators
            • Spinal Instrumentation
            • etc.
    • INDUSTRY PREMISE
      • Health Care is a local business requiring local solutions
      • Financial mis -alignment of stakeholders
      • Exodus of profitable procedures
      • High profile expenses
    • DEMAND for IMD’s
      • Fueled by Supporting Technology
              • Pure Play
              • Skill Based
      • Both driven by regulatory indications requiring costly educational support to clinical community
      The Feedona Group October, 2003
    • WHY THE ATTENTION
      • Contribution to Med-Surg Expenditures
          • Med_Surg has carried 10.7% CAGR price increase since 2001
          • Medical Device products represents 89% of these expenditures
              • Non Medical Device price growth at 2.6%
              • Medical Device price growth at 11.8%
      IMS Hospital Supply Index 4 th Qtr 2003
    • CONTRIBUTING ISSUES
      • Clinical liability of physician
      • Installing best practices
      • Supply chain implications
      • Value contribution of technology
      • Supplier acquisition and/or consolidation
      • No underlying platform for harmony
    • BUYER POSITION on MEDICAL DEVICES
      • Technology is not accompanied with a economic profile
      • Suppliers utilize relations to undermine hospital efficiencies
      • Underestimated ability to implement standardization
    • SUPPLIER POSITION on MEDICAL DEVICES
      • Focus on procedural issues
      • Not enamored with the prospects of retooling their sales forces.
      • Has been little volume movement through price concessions
    • A POLARIZED ENVIRONMENT
      • With the growth of this fragmented and seemingly hostile environment, there appears to be little opportunity to advance the relations, understanding and creditability needed to effect resolution
    • STATEMENT OF NEED
      • The industry has acknowledged there are a significant number of health care institutions struggling with their IMD costs, while expressing disappointment in both national & regional efforts to optimize the value needed to keep their facility competitive
    • PROPOSED APPROACH
      • Create an immediate economic resolution by building a collaborative platform between the buyer and seller at the local level
      • This approach is solely based on individual focus to identify and establish a “quid pro quo” for perceived values
      • Leverage reasonable performance criteria by the user, purchaser and seller to create momentum and focus
    • AREAS of FOCUS
      • Establish Creditability
      • Create Collaborative Balance
      • Arbitrate Negotiations
      • Coordinate Communications
      • Follow-up Performance Reviews
    • PROJECTED FLOW
      • Preparation
      • Step One – Initiate Communication
      • Step Two – Go/No-Go Commitment
      • Step Three – Build Out Negotiations
      • Step Four – Develop/Activate Contract
      • Step Five – Implementation
      • Step Six – Qtrly Business Reviews
    • PROCESS FLOW
        • PREPARATION
      • Understanding of local issues
      • Become fully versed with pertinent national and local agreements
      • Obtain statistics that are relevant for collaboration
      • Develop a Plan of Action
      Preparation
    • PROCESS FLOW
        • INITIATE COMMUNICATIONS
      • Meet with stakeholders individually
      • Perform Needs Assessment
      • Link various contract influences
      • Establish value interpretation
      • Assure clinical buy-in and parameters of support
      Step One
    • PROCESS FLOW
        • GO/NO-GO COMMITMENT
      • Create the “Quid Pro Quo” as linked to values expressed
      • Develop Balance Chart of Strengths & Weaknesses
      • Construct a “go forward” Commitment, acknowledging both parties interest and willingness to continue process
      Step Two
    • PROCESS FLOW
        • BUILD OUT NEGOTIATIONS
      • Negotiation process coaching
      • Assimilate quantitative and qualitative advantage
      • Establish parameters around a common understanding:
      Step Three
    • PROCESS FLOW
        • DEVELOP & ACTIVATE CONTRACT
      • Simplify contractual language
      • Incorporating acknowledged values
      • Include Critical Performance Drivers
      • Milestones
      Step Four
    • PROCESS FLOW
        • IMPLEMENTATION
      • Reinforce clarity through a series of communications
      • Detail Critical Performance Drivers and assigned responsibilities
      • Conduct clinical meetings and seek out champions
      Step Five
    • PROCESS FLOW
        • QUARTERLY BUSINESS REVIEWS
      • Formalize a review process that addresses Progress Reports on Contract Effectiveness, as framed by the Critical Performance Drives. Attention would be given to stated milestones and predetermined corrective action deemed appropriate by both parties.
      Follow-up
    • A WORD ON VALIDATION
      • Past experience indicates minimum buyer/seller collaboration after the signing of a physician preference agreement. This produces a gap in realizing contract expectations and becomes a major contributor to previously unsuccessful approaches.
      • Therefore, critical to the Contract Platform is establishing definable and measurable performance criteria supporting intent. This automatically leads to performance drivers which are monitored during Scheduled Performance Evaluations.
    • ALTERNATIVES
      • Obvious need for building better business models that allows both buyer and seller to meet objectives
      • If health care is a local business, then it will function better with local control
      • Stakeholders will not stay at arms length
      • Economic cascade via co-payments to consumer
      Legitimizing “tier care” providing better health care for those of financial means
    • SCHEDULE BREAK (Back By 10:45am)