Understand IDN’s is paramount to success
Cost Management is a Priority
One of the key drivers of forming IDNs is to leverage their size to negotiate prices. This results in fewer, larger accounts with greater market power. Pharma and medtech companies should consider re-shaping their sales force. Implementing a Key Account Management strategy will help them deal with this change in account structure. A key principle of KAM is focusing on long term relationships with valuable accounts. Thus, a KAM approach is a suitable commercial model to put in place to deal with IDNs.
Understand Prescribing Power
IDNs can have a significant impact on treatment choice. An IMS study on diabetes launches revealed that more than 50% of physicians and prescription volume are affiliated with IDNs.
Decisions are moving away from the individual physicians toward administrators and non-prescribers. This includes quality review boards, medical directors and pharmacy directors. As IDNs adopt new policies, they don’t just apply to hospitals. They also apply to any physician group or outpatient centre that is part of the IDN. Pharma sales teams must now understand how IDNs make product decisions and be able to provide data that demonstrates the clinical and economic value of their products.
IDNs are Value-Conscious
IDNs are not solely price focused. An IDN’s role in patient care is becoming more and more relevant. IDNs objectives have expanded to balance total delivered cost with profitable revenue and improved patient outcomes. A focus on all aspects of patient care can distinguish a health system. IDNs are developing new ways to engage patients with services, and of providing support for these patients. Improving patient journeys and outcomes will ultimately lead to a reduction in costs. Re-admission rates will decrease as processes get refined, patients are educated and encouraged to equip themselves with more tools. This keeps costs down and improves the quality of care.
New Payment Models
IDNs and other large provider organizations are starting to consider taking on risk in the form of bundled payments and population health management. Others are coordinating with commercial payers and developing models for specific populations and sub-populations. As they build these new payment models, they are developing predictive care paths that will promote consistent delivery of high quality, cost effective care.
For IDN members this means they must adhere to formularies or justify their decision when they elect to use another product.
Strategies for Success
Key Account Management
The time has come for pharma and medtech companies to embrace a KAM strategy. A recent PwC survey of pharma executives reported that KAM is the most successful new commercial model implemented. KAM is an organizational necessity in this evolving healthcare environment. Traditional sales models devised in an environment of one-to-one, sales rep-to-doctor tactical sales are just not effective.
A KAM strategy will allow pharma and medtech companies to compete and succeed. This is especially true with the advent of large accounts in IDNs and the growing complexity of stakeholders. KAM builds consultative B2B relationships with these large/influential accounts.
The consolidation of HCPs has reduced the number of accounts and increased complexity. There is then, a need for a leaner and more skilled salesforce.
KAMs must be entrepreneurial with good business acumen. Where a traditional sales rep may rush into product messages, the KAMs job is to invest time in researching the customer. A KAM identifies the key decision makers and discerns their current risk profile. The ultimate goal for account teams is to be able to show how using the organization’s products and services will impact the customer’s bottom line.
This B2B mindset is not limited to KAMs; redefining the role and capabilities of specialty and primary care reps is crucial. Reps must have the ability to identify and engage KDMs with enhanced technical knowledge of products and the financial benefits they offer. They must develop new sales tools need to allow reps to prove the economic and clinical value of the products they have to offer. As the rep role evolves, there will be a need for new performance metrics to measure the quality of account management, rather than just the volume of sales.
Create Value Solutions geared towards Customer Engagement
Pharma and medtech companies must recognize what all relevant stakeholders consider to be valuable. This includes payers, physicians, administrators, and patients. It is imperative that organisations develop ways to engage the providers within the system. They need to engage patients with services and supports that are becoming available. While structuring commercial activities to understand the needs of IDNs, and delivering value for all stakeholders requires significant resources and commitment, there is also potential for significant returns.
Examples of these solutions include case management that’s offered by some support organizations. The up-education of patients and encouragement of them to use new applications and tools can also deliver significant value. These elements feed into the local geography and shape those specific care delivery models. Pharma and medtech companies should understand how these models differ from region to region. They must adapt their engagement model to become locally relevant.
You must equip Field sales teams to communicate the organizations value proposition. This must come with the necessary supporting evidence, in terms that resonate with their customers. By creating and communicating joint value propositions, customers can understand how your organisation can improve their operational efficiency and quality of patient care.