Innovation Is Your Fast-Pass To Gaining The Attention Of GPO And IDN Decision-Makers
BY: DAVID FINLEY, Managing Partner
INSTALLMENT 2 of 2
In Installment 1 of this 2-part blog series, we addressed the rapidly evolving, increasingly complex, quickly consolidating world of GPOs and IDNs. It’s challenging simply to know where to turn, whom to consult, and how to best navigate the quagmire. In Installment 2, we share the key to getting in the door and securing the contract.
[FEBRUARY 2, 2024] – One winter many years ago, when I led sales and marketing for a large cloud Enterprise Resource Planning [ERP] provider that eventually became IBM Cloud Services, we held extraordinary team meetings at places like Keystone Resort in Colorado. We had motivational speakers and celebrity spokespeople in attendance, people like Olympic ski champion Phil Mahre and baseball legend Reggie Jackson.
Many of these luminaries delivered the usual, from-the-dais pep talks about the importance of hard work, dedication, dreaming big, and finding a way to change the world for the better. For me, two memories stand out. The first was when we closed a $52 million deal for a full ERP outsourced program with Redback Networks and I was standing with their CIO and Reggie listening to Phil speak. That was a transformational moment for our company.
The second was when one of our executives shared the news about a forthcoming innovation that would be “one of the greatest inventions of our time”, one that would revolutionize the world of personal mobility. No one had yet heard of the Segway but the peek under the tent was exciting and imaginations ran wild about how daily life would improve.
Well, as you no doubt know, outside of airport cops, mall security, and guided junkets in tourist towns, the Segway came and mostly went without revolutionizing much of anything. It had once seemed so promising but, in the end, we’re all still riding bicycles or motorcycles or driving cars or trucks.
So what happened …?
Like anything, there are myriad opinions and perspectives as to why the Segway didn’t pan out as predicted but, from where I sit, it simply wasn’t innovative enough to compel people to purchase and, in doing so, convince them to alter their lifestyles.
I share this with you as a way to emphasize the critical importance of not only innovating but also filling a void or gap that people are yearning to fill. Further, you must tell your story and tell it well to those in a position to embrace and adopt your innovation, bring it successfully to market, and help you fulfill the vision you have for changing the world in a positive way.
At the core of this is the need to clearly identify your value proposition, not the easiest task because it requires you to be brutally honest with yourself about your [presumed] innovation’s true value and worth. Measuring it nine ways to Sunday and back again may confirm your belief you actually do have something truly special … or it may mean you have to accept the reality your baby is, well, ugly and not-so-adorable after all.
Cutting Through Then Breaking Through
In Installment 1, we addressed the rapidly changing, consolidating and increasingly complex nature of healthcare in general, and Integrated Delivery Networks [IDN] and Group Purchasing Organizations [GPO] in particular. When the pandemic rocked the world in early 2020, it was understandable that access to key decision-makers, purchasers and influencers had to be curtailed for safety reasons. Now four years later in a post-pandemic world, access to these people has not gotten easier.
Meanwhile, for a variety of reasons, the healthcare industry has become ever more complicated and the ability to cut through the clutter and complexity for even a shot at showcasing your product is extremely challenging. Getting in the door is Step 1 and it’s a formidable step indeed.
Step 2 is not only putting your best foot forward once in the door but doing so in a manner that leaves your audience wondering how they could possibly succeed in the future without your product or device. In short, you’ve got to blow them away. And that takes innovation … breaking through with something so special, so unique, and so demonstrably meaningful that there is simply no other option but to embrace and adopt.
Allow me an aside here, please …
What do I mean by true innovation?
On a personal note, my wife and I have experienced a truly life-changing home innovation called the Thermomix®. I call it the “German Cooking Robot”. Thermomix® has already gained legions of aficionados in Europe and I have no doubt it will eventually break through in America, pushing aside lesser kitchen innovations [in my opinion] like the microwave, Instant Pot® and Ninja® Air Fryer, even basic pots and pans!
Looking a bit like something from NASA, this breakthrough device features a heating element, a motor for fast or slow blending and stirring, and a weighing scale. Cooking functions can be accessed simultaneously to carry out steaming, emulsifying, blending, precise heating, mixing, milling, whipping, kneading, chopping, weighing, grinding and stirring … but it doesn’t do windows. 😉
Thermomix® also features a touchscreen with a guided mode that along with Cookidoo®, a subscription-based, online recipe catalogue, allows the user to precisely execute recipes, step by step via WiFi. Moving from the sublime to the astounding, Thermomix® will even email or text you a grocery list for your next delicious and healthy culinary creation.
What once used to take an hour or more to prepare, complete with the pile of dirty cookware and utensils piled high in the sink, now only takes a matter of minutes with minimal cleanup -- no muss, no fuss, as they say. No doubt, you can sense my excitement about this device and no, I’m not an equity holder in the company, just a huge fan. You may now better understand what I mean by breakthrough innovation that truly improves lives.
Innovation in Everything!
Getting back to business and breakthrough innovation, I’m not just speaking of your product or device, I’m talking about a completely, immersive, innovative experience for all involved. Innovation must permeate every facet, every dimension of your approach, the user experience, as well as the process of getting it to market and into the skilled hands of those who can deliver its benefits for improved patient outcomes.
It means being innovative in your key messaging; your presentation deck; your approach to planning, production and supply chain; and the strategy and structure of your sales force. Everything you think, say and do must be done with innovation as your No.1 guiding principle.
Your superiority – as measured by being different, better, and special – has to be evident and stand-out-obvious from the moment you reach out to the moment you go to contract, and beyond.
Right now, you may not have all the answers to all the questions swirling around the need for an innovation such as yours but if you have more answers than “the other guy”, you’re preferable. Looking more closely, you’ve got to have the right team, the right funding, and the right data to be effectively persuasive. As a former industry colleague of mine is fond of saying, “In the Land of the Blind, the one-eyed man is king.”
The healthcare industry’s focus on IDNs has been in place for 20 years or more with companies investing large sums of money into leadership, structure, training, and methodologies to penetrate and more effectively manage these large accounts. Meanwhile with rapid consolidation [400+ players eventually being reduced to 100-150], IDNs are larger and stronger than ever.
Further, the emergence of the disruptive Provider-Owned GPO or “POGPO” as I call them, is a growing influence that many suppliers, and even some providers who own them, don’t fully understand, much less know how to successfully navigate due to their complexity. Questions abound …
- Is there a primary GPO designation?
- Is there a parent national GPO and what does that relationship look like?
- How does the provider manage multi-category contracting?
- What do their sourcing calendar and systems look like?
- Do they self-distribute?
- How much corporate control [and/or autonomy] do they allow their constituent members to have?
These are just some of the many questions you must answer pre-call — not during, or post-call — if you’re going to have any shot at success.
And another thing to consider …
The Ambulatory Surgical Center [ASC] relationship to large health systems is an interesting model that adds even more complexity. According to an orthopedic sales executive friend of mine, the majority of ASCs have a unique ownership structure … meaning if you’ve seen one, well, you’ve only seen one. There’s tremendous variance depending on each individual situation.
In some cases, the large health system has complete ownership meaning employed surgeons. In other situations, the health system has a majority interest and physicians a minority interest [surgeons benefit because the hospital system provides financial support but the surgeons give up control]. Further complicating and confusing matters is that some situations include surgeons trying to open an ASC on their own or electing to partner with a national ASC provider. If they choose the latter option, surgeons still maintain a majority interest and have help with costs associated with the opening and management of the facility.
Regardless of business model [and after reimbursement], the shift to ASCs is not only occurring at an accelerated pace, it’s rapidly innovating, including robotics or technique, or disc repair and/or replacement. And the shift from orthopedic to cardiovascular procedures is now happening.
[As a side note, I like to steer people toward Dr. Jeffrey Cantor of the Cantor Spine Center in Fort Lauderdale for innovative and mobility-enhancing technique. Dr. Cantor is patient-focused and has tapped into the elusive partnerships of leveraging technology and payor relationships to bring affordable advanced care and exceptional outcomes to his patients.]
Regardless of your product and where you are in the product lifecycle, it all begins with identifying your value prop and demonstrating innovation in all that you think, say and do.
What Excelerant offers …
If it all sounds challenging and confusing, that’s because it is. You not only need to align with a trusted, proven partner who can get you in the door, it would serve you well to align with someone who can also help you put that proverbial best foot forward, including assessing and validating your value proposition. In a recent meeting, a large Fortune 500 client we’d partnered with said, “You helped us flex a muscle we didn’t know existed”. That’s exactly what we do.
There’s no shame in an organization not having a Strategic Accounts Team or, if they do, not understanding exactly where the market is headed and how best to leverage it. A wise company acknowledges its own gaps and voids and reaches out to those who can help fill them. We can help you, too, flex a muscle you didn’t know you had. If you’d like to know more, please contact Excelerant Consulting today. We’re here for you.
And before I leave, one more excited plug for breakthrough innovation: Be sure to check out the Thermomix® and, in particular, the Cookidoo® lineup of recipes. You won’t regret it!
info@excelerantconsulting.com
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ABOUT DAVID FINLEY
Dave possesses a deep understanding of product commercialization from a sales standpoint. He has been a sales leader for corporations ranging from manufacturers, distributors, cloud-based SAS providers, specialty distributors, device and GPO. He is intimately familiar with the complexities and intricacies involved in working with Group Purchasing Organizations and Integrated Delivery Networks and has rich connections within all major GPOs and IDNs. He is highly respected in the healthcare industry and has a proven track record of developing go-to-market strategies that produce meaningful sales growth and profitability.
ABOUT EXCELERANT CONSULTING
Excelerant Consulting is the go-to organization for med-tech companies that need to position products and services successfully for value analysis committees, contract acquisition, and sales modeling and execution to commercialize the launch of medical devices or services with Group Purchasing Organizations [GPO], Integrated Delivery Networks [IDN], or Regional Purchasing Coalitions [RPC]. Clients rely on Excelerant to enhance their product positioning, navigate corporate contracting opportunities, and provide sales support to accelerate growth and profits.
For more info, contact Excelerant Consulting at info@excelerantconsulting.com