July 25 2012 | 5 more medical device strategies doomed to fail in 2012

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5 Medical Device Strategies
Doomed to Fail in 2012

July 25, 2012
Gunter Wessels, Ph.D., MBA Charlie Johnson, M.Ed., B.S.
Partner, Practice Principal, Consultant, Leadership Practice Principal,
Total Innovation Group, Inc. Total Innovation Group, Inc.
gunter@mytigi.net charlie@mytigi.net
@gunterwessels

www.tigi.net
© TIGI 2012 All rights reserved

Failure Deﬁned
Sluggish growth

Market Share Decline

Price/Margin Erosion

Commoditization

Diminished proﬁtability


The First Big 5

1 Pricing Conﬁdentiality Agreements

2 Additional Salespeople

3 Geographic Market Assignment

4 Appeal to Physician Preference

5 Feature-Advantage-Beneﬁt Sales and
Marketing

5 More Strategies That Will Fail

1 Add Features and Launch Now

2 Go-Big - Win Big

3 Get KOLs - Trickle Down

4 Bet on Past Performers

5 Drive Activity - Skip Training


1 Add Features & Launch Now

Focus: New Product Features and Advancements


Problem: Solutions are more contingent on
customer capabilities than “more of” the same
advances in resolution, speed, accuracy.

• Care delivery is evolving
• Workﬂow remains a challenge
• Automation is critical
• Disruptive innovations can win...but more
closely matched solutions are key


Add Features & Launch Now Remedy
Demonstrate the value of your solutions and
claim the realization of your beneﬁts.

• Clinical Capability Enhancement
• Operational Efﬁciency Improvement
• Financial Performance in Cost Reduction and
Liability Avoidance

SM


2 Go Big - Win Big

Focus: The Largest Customers or Potential Customers


Problem One: The healthcare market is growing
and declining at different rates in different spaces.

Critical Access Hospitals
1290 Facilities
3.8% of Discharges
Large Urban
1310 Facilities
45% of Discharges
27% 28%

Rural >50 Beds
153 Facilities
2% of
Discharges
3%
2%
Rural <50 Beds
4%
24%
102 Facilities
<1% of Discharges 9%
3% Other Urban
1092 Facilities
38% of Discharges
Medicare
Dependent
195 Facilities
6% of Discharges Sole Community
Rural Referral
394 Facilities
124 Facilities
6% of Discharges
4% of
Discharges

Source: Medpac 2011 based on 2009 Discharge and Facility Count Data


AHA Hospital Market
5795 Registered Hospitals in 2009
D
ec State/Local Run
lin 19%
in e
g Federal S tabl
Co 4%
ns
oli
da
tin Psychiatric
g 8%

For Proﬁt
17% Long Term Care Prisons
2% 0.26%

ting
Consolida
Not For Proﬁt
50%

Source: AHA ChartPack Data

Problem Two: The largest and most capable
organizations are incorporating the latest in care-
delivery forms that reduce utilization, cut cost, and
streamline care delivery.


Go Big - Win Big Remedy
Define where your solution has the greatest
positive impact in clinical, operational and
financial benefits.

• The mid-market is straining; creating opportunity.
• The low-end of the market is evolving rapidly
and creating new opportunities


3 Get KOLs - Trickle Down

Focus: Engage Lead Users and Innovators


Problem: Many lead users and innovators do not
represent your target market.


Get KOLs - Trickle Down Remedy
Engage Service Line Managers
Service Lines Dominate Healthcare Delivery
A Service Line is:
- A Center of Excellence
- Focused on a patient population with a range of conditions and symptoms.
- Engaged in meeting providers’ and patients’ needs for:
• Quality
• Access
• Convenience
Service Lines are comprehensive, “product lines” including:
Screening & Prevention Diagnosis Treatment Aftercare support


4 Bet on Past Performers

Focus: Hiring Your Best Competitor


Problem One: Your biggest competition is not the
good people you bid against-- it is another project.

IT Pro
ject

Lean
Project

Parking
Deck

Investment


Problem Two: “A” players don’t regularly leave
their companies.

“Experience is more easily gained than sales skill.”
-Herbert Greenberg, Ph.D.


Bet on Past Performers Remedy
1. Recognize that the
environment has changed

2. Re-examine your value
in the “new normal”

3. Evolve your skills and understanding

4. Align sales and marketing activity


5 Drive Activity - Skip Training

Focus: Maximize Time-in-Territory and
Defer Development and Training


Problem One: Without a fundamental understanding
of healthcare changes and their implications, you will
struggle to remain relevant.


Problem Two: The key to better performance is
management, culture, and values.


Drive Activity - Skip Training Remedy

1. Study your industry, not just your product and
your competitors

2. Develop your healthcare business acumen

3. Focus on Sales Productivity Metrics; ROSI

4. Ask for help when you need it


Recommendations:
A Balanced Approach


Developing Your Value:
What are the Hurts?
Department Service Line Facility IDN/System ACO/Network
Delivering
Enforce Protocols Care Coordination
Growing or Accountable Care
Clinical Evidence-Based & Medical Policy and
Reducing to Populations,
Medicine Across Service Line
Utility Services Offered Disease
Departments Portfolios
Management

Optimize Staffing
Resource
Equipment, Workflow, Patient Skill-Mix Required Shared Services
Operational Deployment &
Facilities, Flow, Patient MD/RN/AH, and Process
Coordination of
Efﬁciency Technology Experience Regulatory Outsourcing
Assets
Compliance

Capitalization,
Debt Service, Market Power
Allocated Profit and Loss on Optimize EBITDA
Financial Leverage, Aggregation with
Revenues and the Service Line Margin, and
Acquisitions, Suppliers and
Performance Expenses Operations Return on Assets
Project Payers
Justification


What to Do?

➡ Upgrade skills: Business Acumen, Evidence-Based Medicine,
Salesmanship, RFP Strategy

➡ Update the playbook: Corporate Accounts, GPO Contracts, Coverage
Models

➡ Revise the forecasts: Plan for Rebuilding, Customer Attrition, Margin
Compression

➡ Assess and Develop Talent: Specialists, Generalists, Managers, and
Support

➡ Commercialize Innovations: New Care Delivery Models, Improved
Patient Flow, Increased Quality


Summary Recommendations
Strategic Recommendations

1. Balance your value proposition on Clinical, Operational, and Financial dimensions.
2. Re-examine your value in the “new normal” & deﬁne where your solutions have the
greatest impact
3. Examine the small, mid, and larger organizations for gaps and strategic ﬁt
4. Align sales and marketing activity
5. Focus on Sales Productivity Metrics; ROSI

Tactical Recommendations

1. Target Service-Line Managers
2. Recognize that the environment has changed and evolve your skills and understanding
a) Study your industry, not just your product and your competitors
b) Develop your healthcare business acumen
3. Ask for help when you need it

Questions?

www.tigi.net

As a participant today:

• Use Code: “2012MedDevice2”
• $500 credit on a TIGI course
• $500 credit on a TIGI consultation
• A Hospital Clinical, Operational and Financial
Proﬁle Scorecard Report (Free)


Thank You

Gunter Wessels, Ph.D., MBA Charlie Johnson, M.Ed. B.S.
Partner, Practice Principal, TIGI Consultant & Leadership
gunter@mytigi.net Practice Principal
@gunterwessels charlie@mytigi.net

www.tigi.net

July 25 2012 | 5 more medical device strategies doomed to fail in 2012

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