The vice president of supply chain at a top IDN system recently told me, “In medtech, there is no evidence-based information whatsoever that one manufacturer is better than another. Take CRM, for example. There are three top players, but there’s no evidence that any one pacemaker is better than the others.”
It’s not news to anyone that medtech products are becoming commoditized, so what can medtech do to differentiate when differentiation is hard to prove with products alone? For starters, medtech companies need to fundamentally rethink what it means to bring value to customers.
In my experience working with medtech companies, the focus of marketing organizations often tends to be using the product’s features and benefits to help clinicians and patients. Value-added services are often afterthoughts that are patched onto the offering at launch, if at all. However, in a recent ZS study on how medtech can be better partners for IDNs, 84% of IDN executives agreed that medtech companies can differentiate themselves by becoming more solution-oriented and providing a broad range of value-added services beyond products, such as education and training, inventory management, benchmarking, clinical protocol support, patient services, operational consulting support, etc.
Here are four things that marketing teams should consider to go from being product-centric to solutions-driven:
1. Think more broadly about the stakeholders in your therapy area and product category.
Gone are the days when clinicians were the only key decision makers in brand choice. Now hospitals have value analysis committees, which include administrators, clinicians, IT, pharmacy, quality assurance, etc., and many of these committee members have a role to play in the purchase decision.
Further, the consumerization of healthcare means that patients and their caregivers are taking an increasingly key role in their own treatment decisions.
The influence of payers in medtech product brand choice cannot be underestimated, especially for chronic diseases and in non-hospital care settings. Medtronic’s Performance Guarantee Program offering for payers for its MiniMed 670G insulin pump system is one recent example where medtech is catering to this stakeholder by providing a risk-sharing program.
While not all stakeholders are relevant for every therapy area, product category or care setting, the broader point is that marketing should have a solid understanding of who the key stakeholders are, and their role and level of influence in brand choice.
2. Understand your stakeholders’ priorities, pain points and needs, and the outcomes that they seek.
In the past, new features or benefits may have been sufficient to convince clinicians to change brands. However, in the value-based healthcare environment today, providers are concerned about achieving key clinical, operational and financial outcomes. Some examples:
- Clinical: Improved patient outcomes, reduced readmissions, reduced adverse events, reduced hospital acquired infections, increased patient safety, improved patient experience/satisfaction, reduced length of stay
- Operational: Reduced staff burden, more efficient inventory management, higher staff satisfaction, increased product and system uptime, increased staff efficiency, increased product utilization
- Economic: Reduced cost, increased revenue, higher ROI
Patients and caregivers are demanding to know more about the disease state and treatment options, proper usage of products, increased engagement with their physicians and other patients going through the same problems. Payers are looking for guarantees from medtech on patient outcomes from expensive products.
It’s critical for marketing teams to understand which needs and outcomes are most relevant to the therapy area, product category and care setting that they play in, and where marketing can have the greatest impact. Understanding what solutions (internal or competitive) are available to help address these challenges can guide marketers on which offers are table stakes vs. differentiated solutions.
3. Develop value-added services to provide a more holistic “solution” offering that goes beyond the product to help stakeholders achieve their desired outcomes.
While the product itself may be at the core of the solution, the value proposition that a medtech vendor offers can be greatly enhanced by adding related services to the product that can better help key stakeholders achieve the outcomes that they care about the most.
The types of services that I have seen medtech companies offer include HCP education and training, inventory management, benchmarking, clinical protocol and decision support, patient education and support, patient monitoring services, operational and workflow consulting support, reimbursement support and financial services.
While some of the above have always existed, medtech companies have advanced technology at their disposal today: data and analytics, AI, digital technology, the ubiquity of network connectivity, cloud, EMRs, video, social media, software, and more. Companies can develop differentiated services by utilizing these.
Here are a few real-life service examples that are intended to help the medtech companies better address customer pain points and priorities. The IDN executives I interviewed noted that some of these services do enhance the medtech products’ value propositions from their perspective
- Stryker’s Fall Prevention Program educates clinicians and provides evidence-based processes and technologies to prevent the risk of falls during hospitalization and after discharge, and also provides a fall prevention guarantee.
- Medtronic’s Care Management Services remotely monitors patients using Medtronic products to enable value-based care at home. This is an example of how Medtronic is using technology, connected data, ubiquity of network connectivity, and a patient’s desire to be engaged in their own care to add value.
- A urology products manufacturer provides an assessment program to measure and benchmark infection rates, and trains nurses on proper product usage to minimize UTIs. This is an example of a medtech company using the power of data and analytics to track and help improve outcomes.
- BD’s Infusion Analytics Services program evaluates patient safety practices, monitors adherence to hospital guidelines, and supports compliance and accreditation efforts. BD’s solution utilizes EMR connectivity, smart pump programming software and clinicians to provide consulting services.
- GE Health Cloud delivers cloud-based, healthcare-specific software-as-a-service applications that connect clinicians with images, data, analytics and peers to increase efficiency, effectiveness and collaboration across the entire healthcare enterprise.
Note that services can span the spectrum from providing incremental value to being transformational. Transformational services could require the organization to build or acquire new capabilities or find a partner, and even to transform the entire business model or go-to-market model.
4. Integrate the product and services together, and articulate the differentiated outcome-based solution’s value proposition.
ZS research has shown that there are five fundamental factors at the heart of a successful value proposition (mission critical, relevant to all stakeholders, financially aligned, measurable, achievable). To be considered a solution, a medtech company needs to package all of the elements, products and services together, and develop a compelling value story in terms of the clinical, operational and financial outcomes that the offering drives. This needs to be further substantiated by evidence to support the claims.
In the face of product commoditization, medtech companies need to become more solutions-oriented. The myriad challenges that their customers are faced with today require more than products to solve them, and medtech companies are well-equipped to leverage technology and offer cutting-edge, holistic solutions. The medtech companies that aren’t delivering the solutions that customers are asking for may get left behind.
The message to medtech from one IDN executive I spoke to hit the nail on the head: “It’s really got to go above and beyond, ‘I sold you a product.’ ”
About the Author: Rohan Agni
Rohan Agni is a manager in ZS’s medical products and services practice. Rohan has advised medtech clients in a variety of areas such as opportunity assessment, growth strategy, new product launches, commercial transformation, go-to-market design and commercial excellence. Rohan has worked with clients in the U.S. and EU, and in key APAC and LATAM markets.