Why, What, & How of Healthcare Reform

…Let’s Start With Why

The Patient Protection and Affordable Care Act is 5 years old, and continues to have a significant impact on healthcare in America. However, as in any reforming era, there is confusion apparent with healthcare providers and suppliers regarding the new rules, and the actions required to become compliant. We will attempt to simplify some of the real and perceived implications of Healthcare Reform.

As we listen to suppliers (and providers), we hear three questions associated with reform:

1. Why…are our customers acting differently?
2. What…do we need to do to align with the changes?
3. How…do we implement these changes to improve our engagement with our customers?

The Problem

Many times when we hear people ask, “why are our customers acting differently?” The question is motivated by frustration and it is understandable. Today, customers are scrutinizing offered solutions and proposals at unprecedented levels, demanding more detail and diligence. Every interaction and transaction seems, and sometimes is, more difficult. More troubling, there are progressively less customer transactions and interactions as reform progresses.

Certainly for some suppliers, their business has had a brisk volume, especially in capital equipment, but overall, the basket of opportunities available to a commercial sales organization is growing smaller, inducing a more aggressive competitive environment. Competing priorities for providers, like IT implementation, mergers/acquisitions, and other priorities, often derail mid and long term sales efforts and progress toward a purchase contract.

Why Reform…Why Now?

To address this “why?” question we must first look at the broader situation. U.S. healthcare is claimed to be too expensive. While there is truth to this notion, the bigger problem is the demographic shift from tax-payer to tax-funded-program-beneficiary. On average, more than 8,000 U.S. citizens become eligible for Medicare every day. This has been a fact for the last 8 years, and this will continue (and accelerate) for the next 10 years. The rise in the number of Medicare beneficiaries would not be a problem if the workforce was growing, wages were increasing significantly, and the tax-base was expanding.

Unfortunately, due to this situation, the funding base for healthcare is severely unbalanced. In 2002, there were 10 new entrants to the work-force for every one retiree. By 2023, this will flip, there will be 1 new work-force entrant for every 10 retirees. As a result, the amount of people paying into Medicare and Social Security will be far fewer than those who are owed benefits under the program.

Why Providers are Reacting this way…

The options for the government are not appealing. On the one hand, we could open the gates and undertake another mass immigration period, as happened in the early 1900s. However, changing demographics is impossible without destabilizing U.S. society, and immigration is already a political lightning rod.

The ACA is pushing consumers to become more accountable for their own healthcare, which being accomplished by compelling the uninsured/little insured citizens in US population to purchase adequate healthcare insurance. Additionally, if consumers have too little money to afford health insurance, that burden can be spread across the general population through the tax system and government funding mechanisms.

The outcome of this cost shift is significant downward pressure on the total market, where providers’ prices, revenues, and their future clinical mission is less defined with a population’s demographics driving demand.

Consequently, providers are examining their market position. They are looking at the scale of their business, and asking themselves, “what do I need to be?…how big or small should we be?”

They are looking at the scope of their services offered, and asking themselves, “where should I add services, reduce services, and focus my efforts?” Most importantly, they are weighing strategic investments in IT, physician practice acquisition, and new construction carefully. Supporting these investments is very important, but the selection of a “strategic partner” is driving the consideration.

Why Doesn’t this All Go Away?

“If we could get our customers to “snap out of it” we could get back to business as usual. Why won’t they pay attention to our great solutions?”

The answer to that is both simple and complicated. First, providers will not just snap out of it…their world has quickly changed, and they are living in a world turned upside down. Reform is moving providers, doctors and hospitals, from the volume-based model to the value-based model.

Why Do We Have to Change our Sales Process?

The requirements for a sales team to attain a provider’s attention and conviction to take action at the executive level (where the decisions are made) is no longer about a good price, a nicely packaged solution, or that a key referring physicians “wants this “. Now the provider’s require that the solution must be strategically relevant.

Second, the reasons for a lack of attention to products stem from the requirement to innovate in healthcare service delivery.

What Should We Do?

The time to adapt your commercial operations to reform reality is now. Decisive action to adopt new processes, upgrading your talent level, and acquiring the technology/tools needed, will yield a strong, positive return.

• The new processes you should consider are centered on messaging to your customers that denote your grasp of the healthcare provider’s challenges associated with Reform.
• The talent level of your sales, marketing, product development teams should be expanded with training programs to inform them of the key changes in reform, and how to leverage those changes.
• Technology and tools, such as dashboards that present a customer’s clinical, operational, financial status, will assist your teams to assess the reform-related hurts of the customer.
• Your teams link your solutions to the healthcare provider’s reform-related Hurts, and provide a value-base regarding how your solution “fixes” the customer’s Hurt.

When do you want to get started?

Please CLICK HERE to purchase and view our latest Webinar to dive deeper into this subject matter. Take advantage of our March offer for $20 off of this Webniar. Use Coupon Code: MARCH20 for $20 off TIGI’s Why, What, How Webinar. Use the link to view our eLearning site and register to purchase the webinar.

Who can help me?

A number of consulting organizations are positioned to help manufacturers innovate and create new products or commercial forms. These organizations deserve your attention, and scrutiny of their models and novel approaches to healthcare. If you need to act more quickly, consider accessing Market-Based Training and Market-Based Business Development from TIGI. The effects of the adoption and execution of Value-Based Processes can be profound. Creating a market-based sensitivity to what is going on, can significantly improve your current, near term, and potentially long term performance.

By Sam O’Rear