consumerism

consumerism

There is a term in healthcare – hospitals in particular – for a situation that should never, under any circumstances, happen. It is known as a “never event”.

And if that sounds a little creepy to you, it should be.

This is because “never events” are a serious problem for all involved – patient, doctor and healthcare facility. Specifically, we’re talking about situations where a recent patient needs to be readmitted to the hospital within 30 days of surgery due to unexpected complications.

For the patient, this is an obvious quality of life problem. I mean, seriously, the last thing a patient wants to do is delay getting back to optimal health. Meanwhile, doctors thrive on the knowledge that they “got it right” the first time, and are understandably disappointed when the script turns out differently. And for hospitals, this is problematic for a variety of reasons—not the least of which is the lack of reimbursement. That’s why hospitals do everything in their power to avoid these “never events.”

Ironically, these efforts have created a never-ending spinoff for those who may be holding the next great MedTech innovation, but are swimming upstream in their efforts to showcase it.

In the past, healthcare companies enjoyed relatively easy and free access to hospitals – particularly surgeons, intensive care nurses and pharmacists. Sales professionals were able to present the hospital unit’s need for their innovations and demonstrate how their use would improve patient outcomes—and achieve greater cost efficiency—without negatively impacting the physician’s workflow. Said innovation will go a long way toward preventing complications and eliminating “never events” involving patients.

Ah, not so long ago, the good old days…

In today’s healthcare environment, you’re more likely to walk to Fort Knox than get easy access to key influencers, decision makers, and potential beneficiaries of your great new innovation. Disappointing, yes. Maddening, absolutely. But that’s the reality.

But there is encouraging news.

There is another way for companies—especially healthcare startups or small to medium-sized companies—to effectively launch their product. The key is to prioritize three important data investments right from the start, so that when the time comes for your rep to “meet the gatekeeper” – better known as the value analytics team – they’ll be 100 % ready to give their best.

Before we look at these three things specifically, let’s look at value analysis commissions [VAC] and how they work.

The “Why” behind Value Analysis Committees

As health care reimbursement migrates to new and different payment formulations, hospital profit margins have been squeezed harder than a Florida grapefruit. Most people would be shocked to learn that on a good day, hospitals report a profit margin of only 3%.

First and foremost, these facilities and their teams are focused on providing high-quality care and value to their patients, but they are also businesses, and issues such as supply and demand, cost efficiency, workflow, product satisfaction and bottom line are important. to them as much as the owner of the clothing boutique on the corner.

For obvious reasons, avoiding the above [and costly] “never events” of post-operative infection, device failure, etc., has always been a priority, and is especially so in today’s financially uncertain environment. To survive these times, hospital systems have adopted a holistic supply chain approach to product acceptance coupled with clinical standardization.

VACs facilitate this process of discovery, evaluation, negotiation and approval. This is your why.

Why healthcare companies should care

Clearly, the value analysis process not only increases the likelihood of improved patient outcomes, but also enables greater efficiency for all involved. However, there is a disconnect between innovative healthcare companies struggling to bring their product to market and the market itself [specifically, the hospital].

I cannot overstate the importance of seeking to understand value analysis [VA] and its meaning. When you understand the VA, you understand the buyer’s needs, wants and priorities – which in turn empowers you to craft your own plan to position your product as the best solution to that hospital’s state of needs.

Simply put, value analysis is the process hospital systems use to analyze sets of data and information to thoughtfully assess the relative value of a particular item or service offering. Seems simple enough. So what’s the problem?

Unfortunately, small companies are often, understandably, focused solely on providing evidence of their product’s FDA approval—an extremely important priority in a linear journey to market. But in the process, they often give in lightly or fail to produce the data that will ultimately give them access to the market. Although their device boasts FDA approval, if it never leaves the shelf, it never generates a profit or benefits a patient, doctor or hospital.

What should a company do? I’m glad you asked…

What do hospitals need?

If you’re wondering what hospitals—and specifically their VACs—need from these healthcare hopefuls, I can give it to you in three words: data, data, data.

Yes, having the necessary safety, clinical, and efficacy data required by the FDA is very important, but companies must simultaneously invest in producing the kind of data that hospital systems care about. While the FDA focuses on product performance and safety, hospitals go one step further and focus on supply chain reliability, product value, impact on physician workflow, and ultimately improved outcomes and better margins.

It is fair and understandable that hospitals expect you to clearly understand your clinical value to them, what your economics are and the overall cost of care. If you can’t do that, you’re spitting into the wind.

Here are the three sets of data that hospitals and VACs need:

  • Data: Patient population Patient population data is evidence that includes multiple variables: ethnicity, age, environment, and gender [to name a few]. Hospitals want specific evidence that applies to all segments of their current patient population.
  • Data: patient outcome What is the realistic expected outcome for the patient? How does the product affect workflow systems? Does it create additional steps for clinical teams or save them time? Is there a learning curve? Give them data that supports each of your claims about the product.
  • Data: Financial result Data on hard costs as well as projected financial results should be provided. Essentially, is the investment worth it? In the world of layoffs, ROI means a lot to VAC.

The data challenge

The biggest hurdles healthcare startups and small companies have to overcome are always time, money and resources. This is especially true with pre-financing running out in today’s volatile economic times.

Furthermore, value analysis is not a standardized process in the industry. Some say, “If you’ve pitched to a value analysis committee, you’ve pitched to a value analysis committee.” They’re all unique in their approaches and expectations, and the salesperson must adjust to that reality because one size fits all. it’s all a quick switch to “Thanks, but no thanks.”

So how do companies even know they’re investing in mining the right data? Unfortunately, many do not. Hence the need to clearly understand the mindset and specific priorities and needs of the buyer as mentioned earlier.

Those who try to conserve resources by waiting until after FDA approval will waste even more time and money and potentially their competitive advantage. Companies must work simultaneously to gather data that passes FDA scrutiny as well as data that will increase their chances of product acceptance and commercialization. Get inside the minds of the people at the FDA and the particular hospital you are targeting. Only then will you know if you are collecting and presenting the right data.

Smart companies preventively stress to their investors the need to fund a parallel track of evidence: one for the FDA and one for the market, p both developed from the ground up. They find a lead investor who can help the company meet reasonable metrics to attract more investment, and they know that doing this well not only sustains them, but ultimately leads to adoption and improved patient outcomes. Choosing an alternative course means that your future is full of obstacles, poor preparation and hindering your innovation.

The companies that do all the right things on the path to FDA approval while also doing all the right things for hospital/VAC approval are the companies that help hospitals avoid “never events.” Taking the right approach to funding, product development, data collection, understanding the specific expectations of each individual VAC, and putting your best foot forward when demonstrating your innovation should be an “always event”.

Photo: atibodyphoto, Getty Images

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