5 Doomed MedDevice Strategies in 2012

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Webinar slides for "The 5 MedDevice Strategies Doomed to Fail in 2012" presented by Gunter Wessels, Ph.D. MBA of TIGI on 2-29-12

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  • Great to be here.Thank you to MedDevice and Joe Hage2012 and beyond are going to be challengingWe’ve noticed some responses and they’re not goodWe did a poll and we’re going to dig into not only what, but why
  • Group our discussion of 2 and 3—especially in the remedy
  • Big deal, and could become illegalPurpose for a confidentiality agreement—manage special casesThis has become a dominant practice and allegations of discriminationSometimes these devices get charged directly to medicare…and they’re seeing different prices
  • Range is staggering for the same device
  • ConsolidationLess call points, less decision makersHigher
  • 5 Doomed MedDevice Strategies in 2012

    1. 1. 5 Medical Device Strategies Doomed to Fail in 2012 Presented by Gunter Wessels, Ph.D., MBA gunter@mytigi.net @gunterwessels on twitter Partner, TIGI February 29, 2012 MedDevice Group © TIGI 2012 All rights reserved
    2. 2. Failure Defined• Sluggish growth• Market share decline• Price/margin erosion• Commoditization• Diminished profitability © TIGI 2012 All rights reserved
    3. 3. The Big 51. Pricing Confidentiality Agreements2. Additional Salespeople3. Geographic Market Assignment4. Appeal to Physician Preference5. Feature-Advantage-Benefit Sales and Marketing © TIGI 2012 All rights reserved
    4. 4. 1. Pricing Confidentiality Agreements• Price Benchmarking • Group Purchasing Organizations © TIGI 2012 All rights reserved
    5. 5. Competing in Healthcare in 2012 Maximize Offset Minimize © TIGI 2012 All rights reserved
    6. 6. 1. Pricing Confidentiality AgreementsPrice Benchmarking • Group Purchasing Organizations • Consulting Organizations • Federal Supply Schedule © TIGI 2012 All rights reserved
    7. 7. 1. Pricing Confidentiality AgreementsREMEDY: • Controlled Pricing Policy • Justified Product/Service Variants • Specified GPO Agreements • At-Risk Contracts © TIGI 2012 All rights reserved
    8. 8. 2. Additional Salespeople• Market Consolidation• Mergers & Acquisitions © TIGI 2012 All rights reserved
    9. 9. U.S. Healthcare Spending $2.5 Trillion in 2009 and 2011 Investment $156B Public Health $77B Administration $163B Hospital Care $759BDurable Medical Equipment $78B Home Healthcare $68BNursing Care Facilities $137B Rx Drugs $250B Dental & Other Care $292B Physician & Clinical Services $506B © TIGI 2012 All rights reserved
    10. 10. Persistent Downward TrendNumber of Beds and Beds per 1,000 population © TIGI 2012 All rights reserved
    11. 11. AHA Hospital Market 5795 Registered Hospitals in 2009 © TIGI 2012 All rights reserved
    12. 12. Systemization in Acute CareNumber of U.S. Hospitals in Health Systems © TIGI 2012 All rights reserved
    13. 13. 3. Geographic Market Segmentation © TIGI 2012 All rights reserved
    14. 14. 3. Geographic Market Segmentation Centralized vs. Local Control• CMS rule draft favors centralized control• Opposed by MD and RN groups; Favored by AHA and FACHE © TIGI 2012 All rights reserved
    15. 15. Medicare Hospital Market 4660 Medicare Providers in 2009 Critical Access Hospitals Large Urban 1290 Facilities 1310 Facilities 3.8% of Discharges 45% of Discharges Rural >50 Beds 153 Facilities2% of Discharges Rural <50 Beds 102 Facilities<1% of Discharges Other Urban Medicare Dependent 1092 Facilities 195 Facilities 38% of Discharges 6% of Discharges Sole Community 394 Facilities 6% of Discharges Rural Referral 124 Facilities 4% of Discharges © TIGI 2012 All rights reserved Source: Medpac 2011 based on 2009 Discharge and Facility Count Data
    16. 16. The Rise of Accountable Care TertiarySpeciality Care Group Facility Primary Mental Care Multi-Speciality HealthPhysician Group Practice Services Group HomeHospital Health Services ACO Success Depends on Relationships and Power“Appropriateness” of intervention & guiding Patient utilization Cost vs Outcome of intervention © TIGI 2012 All rights reserved
    17. 17. The Rise of Accountable CareBeds/ 1,000 population Prominent ACOs © TIGI 2012 All rights reserved Source: Premier GPO News releases
    18. 18. ACO DistributionACO’s by State ACO’s by MSA © TIGI 2012 All rights reserved Source: Levitt Partners Analysis
    19. 19. Evolved Care Delivery SystemACOs are a “New Layer of Healthcare”•An unseen care coordinating organization•Built upon a powerful Physician group•How will hospital executives react? • If they run a tertiary facility • If they run a community facility • If they are a for-profit health system • If they are a critical access facility © TIGI 2012 All rights reserved
    20. 20. 2. More Salespeople &3. Geographic Market SegmentationREMEDY:• Integrated Coverage • Corporate Accounts • Flexible Resources • Mobile Hyper-specialists• Clinical, Operational, and Financial Focus © TIGI 2012 All rights reserved
    21. 21. 4. Appeal to Physician Preference• Ray of Light for the Physician Payment Sunshine Act-- Forbes © TIGI 2012 All rights reserved
    22. 22. Physician Sunshine Act 2011• Mandatory reporting of “Transfers of Value” • Manufacturers and GPOs report • Meals, travel, speaker fees etc. • Includes Physician Owned Distributors• Penalties are Fines for non-reporting and inaccurate or incomplete reporting• Implementation delayed until 2012 © TIGI 2012 All rights reserved
    23. 23. Physician Sunshine Act 2011• General Report Contents • Name, Date, Associated Device, Drug etc. • Type of contribution, including Charitable • Anything over $10 is reported• Physician Owned Distributors Reports • Ownership attestation • Investment disclosure © TIGI 2012 All rights reserved
    24. 24. Physician Sunshine Act 2011FINES • Normal Failure to Report • Minimum $1,000; Maximum $10,000 for each instance • Maximum of $150,000 for annual failure to report • Knowing Failure to Report • Minimum $10,000 and Maximum $100,000 for each instance • Maximum $1,000,000 annual failure to report © TIGI 2012 All rights reserved
    25. 25. 4. Appeal to Physician PreferenceREMEDY • Evidence-based Influencing • IDN/IHN Focus • Selling Economic Value • GPO contracting and coverage • Revised account management © TIGI 2012 All rights reserved
    26. 26. 5. Feature-Advantage-Benefit © TIGI 2012 All rights reserved
    27. 27. REMEDY: A Balanced Approach © TIGI 2012 All rights reserved
    28. 28. REMEDY: What are the Hurts Department Service Line Facility IDN/System ACO/Network Care Coordination Population Growing or Clinical Evidence-Based Definition of and Management Reducing Services Medicine Services Service Line and Utility Offered Portfolios Cooperation Equipment, Community Staffing Skill-Mix Shared Services Operational Resource Facilities, Outreach and Required and Process Coordination Efficiency Technology Marketing MD/RN/AH Outsourcing Market Power Capitalization, Debt Financial Allocated Revenues Favorable Market Adequate EBITDA Aggregation with Service, Leverage, Suppliers andPerformance and Expenses Conditions Margin Acquisitions Payers © TIGI 2012 All rights reserved
    29. 29. What to do...1. Upgrade skills: Business Acumen, Evidence-Based Medicine, Salesmanship, RFP Strategy2. Update the playbook: Corporate Accounts, GPO Contracts, Coverage Models3. Revise the forecasts: Plan for Rebuilding, Customer Attrition, Margin Compression4. Assess and Develop Talent: Specialists, Generalists, Managers, and Support5. Commercialize Innovations: New Care Delivery Models, Improved Patient Flow, Increased Quality © TIGI 2012 All rights reserved
    30. 30. Questions © TIGI 2012 All rights reserved
    31. 31. As a participant today:Use Code: “2012MedDevice”• $500 credit on a TIGI course• $500 credit on a TIGI consultation• A Hospital Clinical, Operational and Financial Profile Scorecard Report (Free) © TIGI 2012 All rights reserved
    32. 32. Thank You Gunter Wessels, Ph.D. MBA Partner & Healthcare Practice Principal gunter@mytigi.net @gunterwessels on twitter www.tigi.net 813-968-0070 © TIGI 2012 All rights reserved

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