Present Times: Payers Demand Value!
Up to this point, our series “The Evolution of the Medtech Sales Role” have described the underlying factors which transformed healthcare systems around the World.
We went back to the “good old days”, when physicians were central to all technology adoption decisions. Then, we visited the period when providers such as hospitals, clinics, and laboratories started to participate in those decisions. In the third and last article, yet another profound transformation will be discussed: the payer’s role and their demand for value.
Before we dig deep into some of the main factors which urged public and private financing agents to have a more proactive role in the healthcare value chain, a couple of comments are due.
First, it is important to say that, although stakeholder influence vary widely around the World, clinicians continue to have a strong voice everywhere; second, changes were not dramatic across all healthcare systems. This is even more true in countries with developed, public funded healthcare systems.
Now that companies, clinicians, and providers were battling for the lion’s share of the value chain, the pressure increased even more at the payer’s end. They had not only to expand their capability to assess technologies from a clinical standpoint, but also from a cost effectiveness and/or budget impact perspective. It was critical for them to single out those innovations which could better treat patients, and at the same time stop the escalation of costs. Moreover, it was imperative to rethink the very business model for the long term considering the true value of medical technologies for their costs.
The first logical move was to increase the capacity and to improve the quality of the assessment of new technologies, but that alone couldn’t be done quick enough, not to mention its limited impact. Larger payer institutions began to realize that they could only control the increasing costs of healthcare by controlling the delivery of care.
Based on that principle, we started to see the consolidation of providers and payers in the private-all sectors. This new dynamic shifted the power away from companies because big decisions started to be based on negotiations between providers and payers.
As a result, the scope, and impact of the traditional sales function diminished. Hence, a new sales approach is required now, one that focuses in demonstrating specific value messages for the different healthcare market stakeholders.
As we reach the end of our series of articles, our objective is not only to look at the events which led us to where we are today, but more importantly, to cast light on a few trends going into the future. Relationship and influence will always be important, but business partners now require value-added activities in areas such as professional education, logistics, finance, and market access.
Among all those important disciplines, market access certainly offers the greatest room for improvement. Even big companies, which have created specific departments and roles to address these challenges, still struggle to navigate the complexity and intricacies of diverse reimbursement environments around the World.
Centralized versus decentralized care, public versus private financing, and the list of moving parts just gets bigger as you move from one country to the other. Having that expertise internally seldom pays off, and that’s why even big companies now rely on partners to uncover which markets are most promising, and to optimize reimbursement within these choices.
Thank you for following our journey through the “Evolution of the Medtech Sales Role”. We hope we not only helped you understand how and why we got here, but more importantly, brought awareness and sparked a call to action towards boosting your market access capabilities.
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