Imagine you are selling a new medical device. You spend months working with a physician champion at a key customer. The physician is convinced of the potential benefits of your new solution, which has recently been approved for marketing. Before the physician champion is even allowed to evaluate the new technology at the

hospital, the hospital value analysis committee (VAC) has to review the technology. The physician puts you in touch with the director of materials management, who leads the VAC.

To get the technology in front of the committee, the materials management director asks you to complete a long application. You are asked to provide pages of details about the device, its costs, its benefits, pricing,

expected utilization and evidence to support its value. Basically, the hospital wants to know how the device will decrease costs, improve quality, or enhance outcomes. You’re told that the VAC meeting is closed to suppliers and that you won’t be able to attend it.You complete and submit the required forms, but it seems

B y c h r i s P R o v i n e S , CEO of Value Vantage Partners and author of Healthcare Value Selling

8Keys for Winning in the Age of Accountable Health Care and Value-Based Purchasing

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like months have passed before you finally hear back. The director of materials sends a curt email stating that the committee has decided that the device doesn’t provide enough value to merit an evaluation. Any hopes of getting it on contract are crushed.

Welcome to the new world of selling in healthcare. While experienced salespeople surely can point out lots of issues with the sales approach in the story above, the point is that the buying decision is fundamentally shifting in healthcare. The old days of getting an advocate like a physician or clinician interested in a solution and pushing it through purchasing are largely over. Hospitals and other providers are becoming smarter buyers of goods and services. The same is happening across many industries.

As health care providers become more sophisticated buyers of goods and services, their buying process has changed. The buying process is more complex, and the requirements to prove the business value of solutions have increased. In addition, as health care providers evolve into smarter buyers, their expectations of suppliers have increased. Sales teams need to understand the drivers behind this change. More important, learning the keys to win in this new environment will help you be more effective and waste less of your valuable selling time.

10 Drivers Causing a Change in Buying BehaviorSuppliers of products and services to healthcare providers face unprecedented change and new challenges. There are ten forces driving significant change in the buying process for healthcare suppliers. Figure 1 provides a summary of these drivers.

The old days of getting an advocate like a physician or clinician interested in a solution and pushing it through purchasing are largely over.

Figure 1.

Without going into details on each of the ten drivers of change, there are clear implications from the convergence of these forces:

� Providers are under tremendous pressure to take costs out as reimbursement shifts from fee-for-service to value-based and population-based payment.

� Providers are increasingly being paid on value, and they are looking to their suppliers for value.

� There’s much tighter alignment of incentives between physicians and providers due to physician employment trends and new payment mechanisms.

� The professional buyer in the hospital is gaining much more influence and power.

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The net result is a substantial shift in the buying process. It’s moving from a buying process driven by the user to one that is driven by a professional buying organization and value analysis committee. The notion of value is also evolving. Many hospitals once were willing to pay for minor improvements in usability or unsubstantiated clinical benefits. Those days are largely over as well.

8 Keys to Selling and Defending Value in the New MarketThe evolution of the buying decision and the intensified focus on economic value means that the old selling approach of primarily focusing on the clinical relationship is a recipe for disaster. That is not to say that clinicians and relationships don’t matter. Of course, physicians and other clinicians will always have a strong voice in most buying decisions. The point is that the buying decision will now be much more balanced and economically focused.

In this new environment, there are eight keys to being able to successfully sell and defend value in the new market. We’ll explore each of these below:

1. Understand the buying process: Most organizations follow a process for buying goods and services. Some hospitals may use a very formal process. There may be strict rules about how the process works, who needs to be involved and how decisions will be made. Others may be less formal. Also, the type of supply item they buy may influence the formality of their process. In some countries or regions of the world, regulations govern the process providers must follow in order to buy new goods or services. However, as a general rule, most organizations follow a process comprising clear buying stages. Figure 2 provides an overview of the buying process.

Figure 2.

Many hospitals once were willing

to pay for minor improvements

in usability or unsubstantiated clinical benefits.

Those days are largely over as well.

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2. Anticipate buyer sourcing tactics: Strategic sourcing is a process for extracting more value from the supplier network. That doesn’t always mean that it is focused on getting the lowest price. It also doesn’t mean that it is about always buying from the best-quality supplier. It means finding the right supplier for the particular good or service being sourced. As a seller, you should understand how the buyer views the items in your sales bag and what sourcing tactics they will use to buy those supplies.

3. Learn to navigate buying committees: Buying committees come in many different names, including value analysis, new technology, pharmacy and therapeutics. In the medical/surgical area of the hospital, roughly 80-90% of hospitals now have some form of buying committee in place. It’s important to understand who’s on the committee, how the committee operates and how they make decisions. Without those details, you’ll be lost and miss lots of opportunities.

4. Quantify your value: With economics playing such a bigger role in the buying decision, it’s critical to have your differentiated value quantified. Don’t leave it up to the buyer to determine it for you. Also, you need to be able to connect the dots between your solution and how the customer is paid under healthcare reform metrics like value-based purchasing and readmission penalties in the U.S.

5. Create flexible offers and trades: With professional buyers playing a much bigger role in the buying process and decision, it’s important to be able to trade value with those buyers. If you are pushed for a lower price, simply lowering your price is a bad tactic. You need to be able to trade value and ask for something in exchange or take something of value out of the offering. Being prepared in advance to deal with professional buyers, who are usually highly trained in negotiations, is critical.

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6. Leverage buying behaviors: Every customer buys a little differently. Some customers are really focused on innovation (innovators). Others seem to only care about price (price-buyers). Some customers are sophisticated and really are seeking value (value-seekers). Finally, some accounts are less sophisticated buyers and still have the physicians making all the decisions (traditional buyers). That is called buying behavior, and your ability to identify the overall buying behavior and customize your approach to each will improve your success and save you time.

7. Align with the buying process: Whether you have a formal selling process or not, your customer probably has a defined buying process. You should align your value selling efforts to how the customer buys. Recognizing where the customer is in the buying process will help you to avoid being a pawn in a purchasing game. That will also help you use your value story to educate and convince the customer at the right stage of the buying process. Research shows that almost 60% of the buying decision is already made once the customer contacts suppliers. If you understand how profession purchasers buy things, it should be clear why.

8. Learn to play buyer games: Even the most honest, well-intended professional buyer will admit to playing games with suppliers to save money. Those could include games like intentionally slowing down the buying process to put pressure on you or conducting fake request for proposals (RFPs). Your ability to recognize those games and successfully play them is critical to defending your value.

That may seem like a lot to remember; however, as the healthcare market continues to evolve and as healthcare customers become smarter buyers, you need to be prepared for this new market and new buyer. The famous saying, often mistakenly attributed to Charles Darwin, captures the current situation “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Are you ready for change?

Chris Provines is an accomplished executive, business advisor, and adjunct professor with broad global experience in Fortune 50 businesses. His experience includes global roles in commercial excellence, strategic pricing, reimbursement, key account management, procurement, business improvement, and finance. As a business advisor, he uses his broad expertise in commercial excellence and strategic pricing to help businesses drive

improvements at both a strategic and operational level. He has also written three books: Healthcare Value Selling, Strategic Pricing for Medical Technologies, and 7 Secrets of Selling to Procurement.

60% of the buying decision is already made once the customer contacts suppliers.

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