The lifeblood on the Med Tech industry is innovation. Innovation is a word that is tossed around often. It can make or break any organization. Often, we will hear organizations discussing their quest for “disruptive and innovative products”. Why is it then that some many organizations and individuals come up short when pursuing this goal? Over the last couple of years Med Tech Gurus has had several guests discuss various aspects of this very topic. The information provided across this landscape of several guests has been dynamic and loaded with amazing nuggets of information. Collectively, I feel there is a playbook for developing a culture of innovation. So exactly what is innovation? The first step is to define it. Innovation- is commonly defined as the “ carrying out of a new combination that includes “the introduction of new goods, the opening of markets, the conquest of new sources of supply, and the carrying out of a new organization of any industry”. Economists will tell you that innovation is also the most important ingredient in an modern economy. Sandy Rihana, Ph.D Chair of the BioMedical Engineering Department at Holy Spirt University of Kaslik. Dr. Rihana appeared on Episode #71 of Med Tech Gurus. Dr. Rihana explains the process of Innovation starting with the 3 phases of innovation.
In this phase an organization needs to identify a need or needs in the marketplace. To address these needs the organization should start to work on concept generation and screening. Those involved should not be closed minded at this point. The brainstorming and idea generation is most important to develop the options. Once an exhaustive list is generated that’s where the use of filters is important to further qualify these ideas. Filters such as regulatory requirements, Intellectual property issues or challenges, and reimbursement should be used. A particular industry may have additional filters, the key is to start to refine the list based on obvious “rule out” criteria. IMPLEMENTATION
In our discussion Dr. Rihana broke this down into the 5 Ps
The Problem Identifying the problem is always the catalyst to innovation. Once identified the goal is to focus on a positive, measurable, scalable solution. The Patient The patient should always be at the core of the value proposition. In Med Tech Gurus Episode #56 Mr. Peter Maag, the CEO at CareDx discusses “always keeping a patient picture in mind”. Peter explains that an organization cannot lose sight of the fact that we are really here to serve the patient. To that end Peter discussed that CareDx has a patient come in and tell their story at each quarterly employee meeting. The outcome of this is” that at the end of the patient presentation there is not a dry eye in the room” Peter explained. “these patient stories keep us focused on what our true mission is.”
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Bringing a new technology to the Medical [1] Device marketplace has certainly become extremely complex over the last 15 years. The barriers to entry have become so significant that it can take years to develop a market presence.
This situation has caused potential investors to shy away from the Med Tech space. There are companies with amazing ideas that can demonstrate amazing outcomes that never see the light of day. Entrepreneurs working in the current environment are driven by a mission. They want to help patients, clinicians, and society by bringing new advances to healthcare. To be honest about it, they are also looking for a healthy return on investment for the stakeholders as well. However, clinical improvement is a huge reason we are all in this game. The question persists: how does an entrepreneur get their product noticed? Things Have Changed Many sales executives and consultants like me remember the old days where one could find a few surgeons, show them your product, and then get them to demand that the hospital start to use this product. Get eight or ten of these clinicians to use your product, and voila, your company was born and on a profitable track. Those of us in the industry today know that this formula no longer works. There are GPOs, IDNs, regional contracts, and value analysis committees standing in your way. It is not unusual to find that if you do not have a system agreement, there might be 20, 30, or more hospitals in a network where you can’t even get in the door. The old-school way of going to the surgeons/physicians no longer works, as many of these clinicians are now employees of the system that you are trying to get into. Their influence has been much reduced. So How Do You Get Your Technology Recognized? Bryan Eckard of Venner International addresses these issues on Med Tech Gurus episode # 10. In this episode, Bryan discusses the benefits of using a fixed cost to marketing approach for new product launches. This includes a best practice of contracting with independent sales representatives (ISRs) or Regional Specialty Distributors (RSDs). The clear benefit to this as a startup is that these organizations earn their living by selling. Thus, if they don’t produce, you pay them zero. This strategy will help a startup, as by definition, startups are always cash-strapped. For the CEO, taking this fixed cost of marketing route can help preserve several hundreds of thousands of dollars in salaries, benefits, and travel expenses. There is a downside to this strategy, however. ISRs & RSDs by nature always carry multiple product lines or have relationships with several manufacturers. The issue here is that they may need some significant support—meaning education and support in training and implementing into accounts. The typical solution for the small manufacturer is to hire three or four regional managers to support this field force. Bryan suggests a different strategy. Instead of hiring the regional sales manager, hire a regional clinical support manager. This individual, typically with an RN RT, or CST credential, can be a significant addition to the equation. They will bring with them the credibility of their education and experience. The clinical decision maker will respect them, as they will have “walked the walk” by having the clinical background. This dual arrangement of engaging the ISR/RDS plus a clinical specialist can be amazingly effective. The local salesperson will have the relationship and the clinical specialist the clinical support. This will create a great deal of confidence with the decision maker. A Unique Approach to the Clinical Specialist Skender Daerti, CEO of the Clinician Exchange, has a novel solution to this challenge. Here is the issue. If a startup is struggling to hire regional salespeople, how can they afford to hire clinical specialists? The Clinician Exchange may be able to provide a solution. Much like an ISR/RSD provides a fixed cost to marketing, The Clinician Exchange can provide a fixed cost to education. As Skender explains in Med Tech Gurus Episode # 7: The Clinician Exchange will assist in putting together that educational campaign. Skender explains they have a database of several thousand clinicians that can be brought in on a contracted basis. The Clinician Exchange will tailor this to every company’s needs, thus maximizing the result while minimizing the budgetary impact for the startup. In this current medical device environment, a CEO must manage their investors’ dollars wisely. There is a significant need to bring unique value to gain attention and acceptance to a new product offering. Sales cycles are longer, and a company must get the most out of their funding. By employing a bit of creativity, seeking out companies like Venner Medical and Bryan Eckard or The Clinician Exchange and Skender Daerti can pay huge dividends in getting a company launched. Excelerant Consulting is also a terrific first stop to develop your go to market plan. Excelerant has all the tools you will need to launch your technology. See www.excelerantconsulting.com These were capitalized in the other article... STEP 1: UNDERSTAND VALUE ANALYSIS AND ITS ROLE It’s a two-word descriptor that couldn’t be more obvious: Value Analysis. If you can successfully fog a mirror, you already understand Value Analysis is the process of analyzing sets of data and information to thoughtfully assess the relative value of a particular item or service being offered. OK, we’ve all aced that part of the exam so let’s move on.
Next, we’ll toss this out right up-front: Value Analysis professionals are not the Lords of the Lowest Cost. Not at all. What they are is the equivalent of an economic traffic cop at a complex, delicately balanced six-way intersection that includes manufacturer, distributor, negotiator [Group Purchasing Organization or Integrated Delivery Network], hospital system, clinician and, most importantly, patient. Value Analysis pros are paid by the healthcare system or facility to obtain the highest available value [which may or may not be the lowest cost] for healthcare products or services, taking into consideration the specific needs and objectives of all parties previously mentioned. And that can be a wide-ranging collection of preferences. Perhaps ringmaster of a six-ring circus might be a more apt description … The role of the Value Analysis professional is difficult and demanding as they strive to find the often-elusive “sweet spot” that pleases everyone along the healthcare continuum. Suffice to say, these are highly intelligent people, many of them clinicians themselves, whose ultimate goal is to improve patient outcomes while simultaneously meeting the expectations of healthcare providers, as well as negotiating acceptable profit margins for healthcare administrators. Three seasoned denizens of the Value Analysis world share 12 key points to keep in mind as you begin the process of addressing and [hopefully] gaining approval from Value Analysis Committees. __________ AMY WHITAKER, MedTech Gurus “Panelist”
“[Conversely], one company helped support every painful step along the way. [That was] a leading indicator that it was going to be successful because the customer service and support was prompt and honest. We may say we need this product or that product and we understand they offer seven other products but respecting the scope really helps. We’re going to have some ‘pain points’ along the way and just know if we are working together in a prompt fashion, we can hopefully get to a result that everyone will accept and be amiable to.”
JAMES RUSSELL – MedTech Gurus “Panelist”
“We met with [the] surgeon who was a wonderful person and chair of the department and went over some data with him. He didn’t realize the costs the hospital incurred for his implants that were so much more than the others. He was clear with us: ‘If you want me to look at using another another supplier, that’s going to slow me down. I’m going to have to learn how to use different implants and different hardware and different vendor representatives and that’s not a simple thing.’ We’re very cognizant of preference but having said that, we’re evidence-based and if we are spending more and outcomes aren’t better, well … The phrase we use in Value Analysis is ‘unwanted variation’ and [we] see if we can influence it.” DARBY THOMPSON – MedTech Gurus “Panelist”
I’ve seen it many times: Wonderful ideas that just weren’t built to navigate the health care system because they were looking at it through a different business lens or maybe an academic lens, and healthcare is complex. There’s a lot of commitment, a lot of vetting that is involved, because you’re dealing with patient lives. There are a lot of things that come into play and if you’re aware of them early on, you’ll have a greater appreciation and fewer hurdles as you move forward into the healthcare market.”
“And once you have that [first] approval, stay focused. You’re going to learn a lot of things you hadn’t considered. Caregivers in hospitals are very good at providing feedback when they see you’re committed to providing continuity of care. Just because you have one hospital in the IDN that likes your product doesn’t mean you can go out and sign other hospitals in the IDN. Focus first on implementing that total value of care throughout that [hospital] then you can add the next customer.”
Now that you understand precisely what a Value Analysis Committee [VAC] is and the role they play, let’s go a little deeper and explore their expectations of you, the medtech vendor who’s holding what you believe to be the next great, innovative healthcare product or service. How do you approach the VAC to be successful? What happens if things don’t go initially as you’d hoped?
To begin with, understand the VA process is not an overnight one. VACs meet on a schedule and their time is precious so, right up front, accept the reality that getting from “here” to “there” could take a month … or it could take six months before you get either the thumbs-up or the thumbs-down. In some cases, it might take longer, especially if the VAC believes your offering is alluring but they need more clinical data and validation to reach a final decision. “There will be some paint points,” says Amy Whitaker, RN, BSN, Corporate Vice President, Clinical Transformation, Advantus Health Partners. “You’ve got to be patient, be responsive, be helpful and, above all, be a good steward of the Committee’s time. The good news is a VAC will work with a supplier to identify gaps and make recommendations. Just be sure to never overstate and under-deliver.” In one case, a medtech vendor had come up with a robotic innovation that and, according to the hype, was the greatest thing to ever come down the pike. [Even sliced bread blushed.] Unfortunately, when it came time to assess clinical data and validate how the product actually performed in the healthcare arena, it didn’t live up to the promise. Not even close. In these situations, you not only swing and miss in an embarrassing fashion, you negatively impact your own reputation and standing with this particular VAC and its members who may be on the committee the next time you seek an audience, or they may have moved on to another healthcare system. In either case, they’ll remember you and your empty promises. Don’t go there. VACs are thorough … James Russell, RN-BC, MBA, CVAHP, Director of Clinical Resource Management, MD Anderson Cancer Center, points out, “The VAC leans on GPOs to help gather data, and to connect and confer with other healthcare systems and providers. They do their homework and they can help educate clinicians on costs and ways to contain costs without compromising patient outcomes.” It is critically important for you to be open to feedback and to remain flexible. “In all cases, two-way flexibility is key to the relationship between the VAC and supplier,” Russell says. “VACs value suppliers with an attitude of fairness and they’re always seeking to establish long-term relationships.” It may take an agonizingly long time but it’s worth it to proceed thoughtfully, patiently and responsively. But where do you start? Who do you call? What’s the key to getting a foot in the door and a PowerPoint deck loaded with impressive data onto a screen for the committee’s consideration? “Most Value Analysis Departments are embedded in the Supply Chain Department,” Russell points out. “The best way for a supplier to find VA professionals is to start with Supply Chain. When you do connect with someone in Supply Chain, the vendor should ask if the healthcare system has a Value Analysis package and you should do as much of the up-front legwork as possible to help facilitate and expedite the vetting process.” Understand the “alphabet soup” of healthcare distribution … GPOs, IDNs, RPCs … so many initials on top of all those medical certifications and degree designations that follow a healthcare professional’s name. They matter. It’s critically important you understand the differences between healthcare’s three major distribution entities:
“Suppliers absolutely need to understand the differences between GPOs, IDNs and RPCs,” cautions Darby Thompson, a Partner with Excelerant Consulting which guides medtech innovators through the arduous process of product commercialization. Thompson also reinforces the point that VACs are to be respected for their knowledge. “VA teams are made up of varying perspectives so suppliers don’t always know best,” he says. “They want to determine if you’re just new bells & whistles or potentially a gamechanger.” Thompson also advises suppliers to willingly accept VAC feedback, even if they tell you “your baby is ugly”. Then it’s time to do something with the feedback, painful though it may be. The best suppliers listen, evolve and collaborate. Stay true to all of your commitments [to the VAC] and, in Thompson’s words, “Always operate as a partner.” Though you have to look closely, there actually are some silver linings to this godawful pandemic we’ve endured for more than two years now. I speak specifically of the Value Analysis [VA] process.
In the healthcare arena, we’ve seen unprecedented cooperation and collaboration among competing hospital systems thanks to a refreshing, collective attitude of “patient before profit”. Systems have been sharing best practices, backfilling each other’s dwindling supplies, and supporting one another emotionally during one of the most demanding times in our nation’s history. We’ve also seen a sharpening of focus among Value Analysis Committees [VAC] charged with objectively assessing and vetting new medtech products or services. “The pandemic forced us to shift our focus to PPE [Personal Protective Equipment] vetting and sourcing,” said Amy Whitaker, RN, BSN, Corporate Vice President, Clinical Transformation, Advantus Health Partners. “The lasting benefits include sharing best practices with other systems, across-the-board collaboration, and developing a strong ‘can-do’ attitude.” Mind you, VACs have long been thorough and exacting about what they need to see and hear from medtech innovators … and what they don’t need to see or hear. But over the past 2+ years, in the interest of time and oftentimes stretched resources, VACs upped their game even more … which means you, as the holder of the next great medtech innovation, better have your ducks in a row before you ask a healthcare provider or a VAC for a slice of their valuable time. Provider Opinions Matter “Provider preference definitely matters in the decision-making process,” says James Russell, RN-BC, MBA, CVAHP, Director of Clinical Resource Management, MD Anderson Cancer Center. VACs not only want to see proof of improved patient outcomes, they also want to be respectful of the provider’s ease-of-workflow. While all key constituencies -- manufacturer, distributor, negotiator, hospital system, clinician and patient -- are factored into the decision-making process, VACs give strong consideration to preferences of those who ultimately use the medtech innovation while treating patients. Hopeful suppliers seeking to court favor with providers must also understand VACs trust their providers to offer fact-based, unbiased opinions about the new innovation. “Wooing providers still occurs – hosted dinners, paid getaways, fees for speaking gigs – but providers know that no new products can ‘come in the back door’,” Russell points out. “They must be fully vetted before being used. Otherwise, liability issues can arise for the provider and the hospital.” Darby Thompson, a Partner with Excelerant Consulting which helps guide companies with promising innovations through the arduous process of commercialization, says, “Suppliers must understand VA professionals are putting their own reputation on the line when making recommendations and decisions.” Obviously, the same can be said of providers who offer their own personal insight, opinion and preferences to VACs. Bottom Line As Whitaker pointed out in Installment 1 of this series, “Suppliers must prove their new technology is more efficient, improves patient outcomes and enhances clinician workflow … at a fair price.” What happened? A year ago, your team released a new technology. The fanfare was there, the sales team rally was terrific. Now one year later sales results were significantly below forecast. Fingers are being pointed and an innovative technology did not get off the ground!
Has this ever happened with your team? Did this new technology that was full of potential get shelved? What might have changed to change this outcome? Quality & clinical gap The root cause of what may have happened here started way before the sales team ever got this product. The situation really started in the design process. Martie Moore of the Immersive Health Group and a former Chief Nursing Officer was on Med Tech Gurus Episode #20. Martie pointed out that most companies won’t immerse themselves into the clinical area that they are designing the product for. This situation creates the issue that clinicians will have to adapt to the product. Martie points out this process is backwards. It should be that the product supports the practice by its design. The design of the product, therefore, should be intuitive to the clinical practice they are trying to address. The moment a clinician needs to adjust their practice to gain an outcome the product has a strike against it. The more severe this adjustment is, the less likely the product will succeed. Martie also points out that most companies do not empathize with nursing. Companies need to realize that all nursing functions are high risk. Nurses have normalized this as part of their everyday practice, in a sense making the difficult look easy. So product developers need to understand that if there is a protocol that requires the RN to step back and take an action that is not part of their standard approach or process, there is a potential for error. Kathleen Vollman in Med Tech Gurus Episode #23 points out that the product design must really fit into the normal clinical workflow. The new concept must ensure that it really helps the clinician consistently do the right thing. Martie, made a similar point and suggested for example that color coding for key steps or differentiating steps made this easier for clinicians that are immersed in life saving procedures. Simple steps like this really help with product acceptance. To Focus Group or Not to Focus Group? Many companies feel that a focus group will mitigate this issue. The issue as both Martie and Kathleen pointed out is that a focus group can lead to biased outcomes based on how it is designed. They can lead participants to the conclusion that the company wants. Martie pointed out that it is much better to “immerse and analyze”. This is imperative to capturing the workflow challenges that these clinicians are facing every day. Too often companies expect human intervention to be the step that bridges gaps in the technology. This can great significant acceptance issues for the technology. It is only after this immersion and complete and comprehensive understanding of the workflow and how your product effects it that the focus group comes into play, this total understanding of the clinical area will help craft the right type of focus group experience. It is also imperative that the company does NOT fall love with their technology. One has to be prepared for the focus group attendees to rip it apart! If the company keeps an open mind and LISTENS, it is likely that the clinicians in this group will make your product significantly better. The company must be prepared for some redesign work. The company must be willing to invest the dollars and time into the changes. If the product development team is willing to make this investment, then you are likely to achieve the key goal. A product that supports the practice. If you do not you may hear the dreaded line from your clinical customer; “THIS WAS DESIGNED BY AN ENGINEER, RIGHT?” |
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