How to Navigate 2017 Healthcare Trends – Build New Solutions

Part 3 of 3

We are two full months into 2017, and it’s time to wrap up this series on 2017 healthcare trends and the impact to Healthcare Sales Professionals.

But first, let’s recap.

If you’ve been paying attention to the industry the past few years, you know that we’ve been talking about value-based care for a long time.

Too long.

But this will be the year that value-based care really hits the market.

How do I know that? I don’t. I’m not smart. I just read a lot of really smart people’s stuff and simplify it for you. This is how I learn.

I digress.

But, lots of research says 2017 is the year of value-based care. There are a few other signs pointing to the stickiness of the value-based bandwagon…

  1. Dismantling Obamacare won’t immediately cause healthcare costs to decrease. There are several reasons for the high cost of care, including the large number of aging Baby Boomers seeking care, expensive new technologies, and a higher life expectancy overall. In short, there are more people using the system with more expensive treatments.
  2. The high cost of healthcare will popularize value-based care. Providers will use value-based care models to reduce treatment costs and readmission rates. This will give them a financial boost.
  3. Republicans and Democrats can’t agree on anything, but miraculously there has been increasing bipartisan support for value-based care model as programs have been tested and put in place by the Centers for Medicare and Medicaid Services (CMS).

For the past few weeks, I’ve been posting about value-based care in 2017 and providing some tips Healthcare Sales Reps can use to stay on top of the trends and get ahead of the competition.

In part one, I talked about adapting for value-based care and in part two I covered innovating to move toward value. This week, we’ll talk about building new solutions to shift to a value-based care model.

Building for Value-Based Care

As the healthcare market shifts to a value-based system, our organizations must build new solutions to keep up with the changes. Here are some trends that are already taking shape, and how your customers can adapt and build for value:

  1. Drug companies will put the brakes on prices

President Trump’s tweets have effected biopharmaceutical stock prices since he became a Presidential contender a few years ago and nobody was really listening to him. Since his inauguration, POTUS has announced he intends to reform the FDA in order to put the focus on what patients need from drug companies.

Sometimes (okay, many times), Trump is all talk, but many drug companies have already responded to his campaign promises. Allergan CEO Brent Saunders agreed to limit drug price increases to single digits, and only once a year. KaloBios Pharmaceuticals has unveiled a new pricing model that will limit price increases to no more than the rate of inflation, no more than once a year. Actions like these are a response to consumers and government officials who are demanding more transparency in drug pricing.

What this mean for Healthcare Sales Professionals?

If you’re working in pharma, ask your leadership about the enterprise pricing strategy. Find out the messaging strategy and keep to the dialogue consistent. Be prepared to justify the price of any drugs you’re selling. If your physicians or patients haven’t asked or even threatened you – get ready. It’s coming!

If your contemplating switching companies, seek to understand their historical growth factors and how they plan to grow revenues in the future. Seek out companies that have invested heavily in research and development or acquisitions of pre-commercialization companies. Look into drug companies that have committed to limiting price increases to pass savings along to your providers and their patients. Avoid companies with the Valeant Pharmaceutical “Moneyball” strategy!

It’s also possible that pricing models will change. Drug companies have been experimenting with pricing models for years. One example is Acorda Therapeutics Inc., which provides a multiple-sclerosis drug called Ampyra to help MS patients walk. The drug is free for the first two months of use, because it’s only successful in about 40% of patients. Because there’s no way to predict which patients will find success using Ampyra, the drug company doesn’t charge until the patient and provider can determine if the drug is working.

Expect to see novel value-based pricing models that put entities other than the government at risk in the future.

  1. Invest in useful technology and data

In the past, government red tape has made it difficult for physicians to share important data and gather insights that will help treat more patients successfully. The recent 2016 21st Century Cures Act took another swing at removing some of the barriers to sharing data via EMR interoperability. Conceptually, this is great news for providers. But, as we’ve witnessed over the past decade – it’s easier to talk about than it is to execute.

There are new tools in the market to address these challenges. The Medicare Access and CHIP Reauthorization Act of 2015 (known as MACRA) uses tools to reward Medicare clinicians for providing quality of care over a quantity of services. These tools include a web application and public API that will help clinicians, registries, and other CMS vendors share data and receive feedback about their performance.

On top of that, hundreds of thousands of tech companies are working to address MACRA and CMS regulations and help healthcare providers build value-based care models going forward.

What this mean for Healthcare Sales Professionals?

There are two important things your customers should keep in mind when investing in new tech:

  • It will take more than one tool – If you represent a healthcare technology company and the words “silver bullet” come out of your mouth, Shhhhhh. Google “EMR nightmare”. It will take several tools to facilitate all the value-based changes providers will need to make. Ask your customer what other tools they plan to implement to adapt to value-based care.
  • Payer models will continue to change – The average clinician works with 12 different insurers. Despite failed payer consolidation, providers should be aware payer structure and models will continue to evolve. This can lead to huge headaches, including difficulty accessing data and actionable insights to inform care. It will also increase administrative burdens. Clinicians have to be able to overcome these issues in order to move efficiently toward a value-based model. Ask your customers if their new tools can keep up with the demands of constantly changing payer landscape?
  1. Overcome short-term fee-for-service losses

You can’t overlook the fact that building value-based models costs some capital up front. It can take years for value-based improvements to translate into financial savings.

Here’s an example: At Mayo Clinic, surgeons use frozen section pathology during lumpectomy and mastectomy surgeries. Usually it takes about 24 hours to perform pathology and get answers for patients, but at Mayo Clinic it only takes about 20 minutes. This is great for patients, but it costs a lot of valuable time for surgeons and staff to wait in the operating room for the results. However, there are lots of benefits to Mayo Clinic performing pathology tests this way:

  • This approach eliminates the need for repeat lumpectomy surgery in 96% of patients.
  • Five years of lumpectomy data shows that Mayo Clinic’s 30-day reoperation rate is 3.6%, compared with 13.2% nationally.
  • Mayo Clinic’s surgical cost is higher for lumpectomy and mastectomy procedures. However, the frozen section pathology method reduces the overall cost of patient care and provides more peace of mind for patients.

This is an example of how value-based models cost more up front. But over time, studies prove this approach to care – saves money and leads to better outcomes.

What this mean for Healthcare Sales Professionals?

Keep in mind that many of your customers are strapped for time to think through new procedures, equipment, and technology that can improve their care. It’s easy to say “no” when something is going to cost a big chunk of change up front.

Arm yourself with statistics to prove that investing up front can lead to lower costs and better outcomes later. And be ready to explain how your products or services can produce significant ROI over time.

Keep an Eye on the Trends

There’s a good chance that you’ve never experienced this much uncertainty as a Healthcare Sales Professional. Until we know more about the Obamacare replacement, your customers and prospects will have a lot of questions and some hesitation about what’s coming down the line in healthcare.

But don’t be nervous. This instability could end up being a huge catalyst for your career if you know how to play your hand.

Keep a close eye on the trends and new regulations so you can pass good information on to your customers. Even if you’re not selling value-based solutions, you can help your customers move toward value-based care.

Not only that, your insights can shape the strategy of your company’s leadership.

When you move past making cold calls and regurgitating features and benefits, you’ll elevate yourself above the competition.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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