2 By Michelle O Connor President and CEO CMR Institute Healthcare providers are under significant pressure from government payers, commercial health plans, and patients to reduce the cost of care while delivering higher quality and that changes the game for you as a sales consultant for the medical devices and diagnostics (MD&D) industry. You have the difficult task of understanding marketplace changes and healthcare reform initiatives, which are rolling out at different rates in different regions, and trying to think like CEOs, COOs, CFOs, and CMOs do, says Anthony Slonim, MD, DrPH, CPE, FACPE, President and CEO of Renown Health, Reno, NV. He is also Chair of CMR Institute s Board of Directors. If you want to talk to us about devices, we certainly need to understand survival rates and complication rates. However, we also need to know how your product will help us fulfill our mission of providing care to the communities we serve with the best quality and service for the least cost. That means you need to have value-oriented conversations with your customers that center on the fundamental concepts transforming healthcare today. Here are 10 of the most important concepts you should know to launch collaborative discussions with customers in the new sales environment. Copyright 2015 CMR Institute, Inc. All rights reserved. This whitepaper may not be reproduced, in whole or in part, by any method or in any form or format, without prior written permission from CMR Institute.
3 10 Key Concepts 1 Accountable Care Organization 2 Avoidable Readmission 3 Consultative Selling 4 Health Economics and Outcomes Research 5 Patient Experience 6 Physician Alignment 7 Population Health Management 8 Predictive Analytics 9 Value-Based Purchasing 10 Variation
4 1 Accountable Care Organization The Affordable Care Act (ACA) established a new healthcare delivery model called an accountable care organization (ACO) to improve healthcare outcomes while containing costs. An ACO is a network of physicians and other providers that work together to improve the quality of healthcare and reduce the costs of caring for a defined patient population. In general, these models are designed to eliminate inefficiencies and monitor performance. Since the ACA was passed in 2010, more than 625 ACOs have been established across the country. When calling on ACOs, Dr. Slonim recommends you know the answers to three questions before your first meeting: What is the ACO s area of focus? From a clinical perspective, who calls the shots at the ACO? How is your device different from its competitors in the market? Do your company leaders develop sales and marketing strategies that align with the business objectives of ACO customers?
5 2 Avoidable Readmission Today, the Centers for Medicare & Medicaid Services (CMS) penalizes hospitals with higher than expected 30-day readmission rates among patients with heart attack, heart failure, and pneumonia. For such hospitals, Medicare withholds up to 3% of their payment in Starting this year, Medicare also penalizes hospitals with readmissions for hip and knee replacements, as well as chronic obstructive pulmonary disease (COPD). To avoid such penalties, hospitals are looking for better strategies to keep medical and surgical patients from returning to their facilities. In particular, they are piloting care coordination strategies and other programs designed to improve transitions of care. Managing chronic illness is at the heart of what a successful ACO needs to do, says Jeffrey Farber, MD, MBA, CPE, FACP, CEO, Mount Sinai Care (ACO) and Chief Medical Officer, Mount Sinai Health Partners (MSO), New York. Some of the strategies that we have been working on over the past two years include developing disease registries in our electronic health record so we can identify who these patients are. From there, we can build outreach programs through our care coordinators who we have embedded in the primary care practices to get patients the screenings and care they need and reduce unnecessary hospitalizations. Does your company offer products or services that help reduce hospital readmissions or emergency department visits?
6 3 Consultative Selling Taking a consultative approach with customers can help you earn credibility and trust with ACOs and other provider organizations as priorities shift. In particular, you should shift your mindset from selling a device or diagnostic product to helping your customers address broader business problems. In general, healthcare organizations want to partner with MD&D consultants that possess a passion to serve and educate, not to promote their own agenda. When I meet with healthcare sales professionals, I often can tell within minutes if they will make good business partners or if they will not make it past my assistant the next time they try to schedule a meeting, says Renown s Dr. Slonim. We expect everyone who meets with our senior leaders to understand that their audience has moved beyond physicians and that value needs to be calculated more broadly. As an MD&D sales consultant, you should strive to identify your customers pain points and seek out solutions that help fulfill shared goals. For example, quality and surgical leaders in a large health system may be struggling to implement standardized protocols and interventions across several organizations. Your company may offer a program, resource, or tool that can help the health system achieve its objectives. Do sales leaders or account managers at your company routinely attend meetings with ACO leaders to get good understanding of their needs?
7 4 Health Economics and Outcomes Research Healthcare organizations are finding better ways to track the real-world outcomes of various therapies by conducting health economics and outcomes research (HEOR) studies. Many are dedicating more time and resources to tracking clinical, financial, and patient-reported outcomes. Providers also are interested in reviewing comparative effectiveness research (CER), an approach to outcomes research that attempts to provide direct comparisons of two or more interventions to determine which is more effective and/or efficient in routine clinical practice. Your company s analytics and outcomes infrastructure can help you make a compelling case for your device, Dr. Slonim says. Does your company provide HEOR to ACOs? Is your company developing post-marketing studies focused on tracking real world outcomes?
8 5 Patient Experience Measuring and improving the patient experience has become a strategic imperative for hospitals, ACOs, and other healthcare organizations. Increasingly, providers are being rewarded or penalized for how patients rate their experience of care. One of the key instruments for measuring the patient experience of care is the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, sponsored by the US Agency for Healthcare Research and Quality (AHRQ). The HCAHPS (pronounced H-caps ) survey contains approximately 30 questions that cover several categories including: Care from nurses and physicians. The hospital environment. The patient s experience in the hospital. The patient s experience after leaving the hospital. The patient s understanding of their care after leaving the hospital. The patient s overall rating of the hospital. Patient demographics (race, education, language) and health status. The survey is given to a random sample of adult inpatients between 48 hours and six weeks after they leave the hospital. It may be completed by mail or over the phone, using a set script. The patient experience is becoming so critical that some leading healthcare organizations, including Mount Sinai, have designated a leader to serve as their Chief Experience Officer. Patients are much more savvy, and at the same time, they should be considered a new form of payer, says Angeliki Cooney, Director of Thought Leadership and Strategic Planning, IMS Health, Danbury, CT. Out-of-pocket costs are well over $1,000 annually per person, so you can imagine that patients are making their own decisions about treatments they can afford and those they cannot. Does your company offer products or services that can help improve the patient experience, such as resources to improve patient-provider communication or to help patients understand their care plan when they leave the hospital?
9 6 Physician Alignment Organizations like health systems and ACOs are focusing on initiatives to build and maintain mutually beneficial relationships with their employed and independent physicians. That is because physicians drive utilization, which can impact the bottom line for healthcare organizations that are taking on risk in emerging payment models. It s important to realize that the decisions of which therapeutic agent or device a physician might use are often driven by the upper management of the ACO and then down through its ranks, says Mark Sorrentino, MD, MS, Executive Medical Director, Global Product Development, PPD Inc., Wilmington, NC. At many hospitals, physician alignment has become a strategic imperative, with the goal of forming a more integrated network over time. Many health systems, for example, are leading efforts to build relationships with physicians in key markets. Others are helping local physician practices improve their operations by making EHRs and other technologies available. Ultimately, the hope is that improved connectivity and data collection can improve the quality of patient care. Do you understand which physician practices are aligned to key ACOs and health systems in your area? Does your company provide tools to physician practices to help support ACO goals?
10 7 Population Health Management Not to be confused with disease management, population health management is a coordinated strategy to track outcomes in certain groups of individuals to improve the quality of care and deliver better value to the system as a whole. ACOs, in particular, are taking on population health management to help contain rising healthcare costs in high-risk subsets of the population and reduce some of the health disparities that exist across the nation. ACOs like Hunterdon HealthCare Partners, Flemington, NJ, have created dashboards to understand the overall health of their population and track outcomes over time. One of the factors that we were looking at in our community is that we have 6,000 pre-diabetics, says Jeffrey Weinstein, Executive Director and CEO. So we have been discussing if there are any resources that we can use from industry as we do outreach with these individuals. Does your company offer products or services to help patients with multiple chronic conditions who tend to be high utilizers of care? Does your company offer patient education, call centers, or other tools to help at-risk populations manage their risk factors (obesity, smoking, etc) for disease?
11 8 Predictive Analytics Part of the big data trend, the field of predictive analytics comprises tools and techniques that healthcare organizations can use in their efforts to manage population health. Used appropriately, these tools can help organizations identify at-risk patients and intervene when necessary. For example, an ACO might develop an analytics tool that identifies hip replacement patients who are at risk for readmission because of other risk factors, such as comorbidities. Identifying such patients for intervention is critical as more organizations take on bundled payments for joint replacements and other procedures. In an ACO where payers and providers are coming together in a gain-sharing or shared savings model, we really need to start thinking about what data we share, how we make it meaningful, and how we measure success, says Swati Abbott, President and CEO, Blue Health Intelligence, Chicago. That is where analytics comes in. Analytics is taking all the data we have including clinical data at the point of care and claims-based data that gives you a longitudinal view of the patient over the years and ties it together into meaningful information that you can use to make decisions. Does your company offer technology tools to help ACOs manage clinical data or improve their performance on key metrics?
12 9 Value-Based Purchasing Hospitals are gradually moving from a volume-based, transaction-oriented business to one that relies on value-based sources of revenue. Under value-based payment plans, providers accept some risk for the outcomes of the care they deliver. In other words, if clinical or financial goals are not met, providers may need to forfeit some of their payment. Several different models of value-based payment are emerging, including: Pay-for-performance Bundled payments Reference pricing Shared savings through accountable care Care coordination payments To effectively collaborate with your customers, you should recognize how these new payment models are shifting providers priorities. For example, ACOs are increasingly concerned about managing costly complications and reducing unnecessary variation. Life sciences companies, including diagnostic and device companies, need to be able to demonstrate and articulate how their product has evolved to a service and fits into a system looking for the greatest efficiency, says Steve Peskin, MD, MBA, FACP, Senior Medical Director, Clinical Innovations, Horizon Healthcare Services, Newark, NJ. Ultimately, what payers and providers in ACOs want to know is how a product affects what Peskin calls the holy grail the total cost of care. Does your company enter into risk-based contracts with providers? Does your company provide physician education on new payment models or value-based care?
13 10 Variation Increasingly, hospitals and health systems are looking to reduce the practice variation among individual providers. For a surgical department, this might mean reducing the number of physician preference items (PPI) on hand, which may contribute to waste and inefficiency. Providers are tracking utilization and outcomes data to identify outliers and improve adherence to evidence-based guidelines, which are important to reduce variation. Such data reporting and transparency should be appealing to many physicians, Peskin says. We are trained to be lifelong learners and to recognize that there are opportunities for improvement, and certainly an ACO is designed to work on that principle of continuous improvement. Does your product or service help the ACO or integrated health system reduce waste, improve quality, and boost its clinical and financial performance?
14 Be a Partner for Change Over the next few years, you will likely find that your customers need support in designing effective strategies to stay competitive while delivering high quality, lower-cost care. As a sales consultant, it will be critical for you to demonstrate your commitment to doing what is best for customers and patients as these concepts continue to transform healthcare payment and delivery. Do you and your team members need the latest information on marketplace changes and evolving customer needs? CMR Institute recently launched the Market Access Insider Experience, a subscription that offers the most current and relevant resources, including e-learning, webinars with leading healthcare leaders, and cutting-edge whitepapers. Learn more at CMRinstitute.org/marketaccess ACO Collaboration event: March 26-27, 2015 Join us for ACOs and Industry: A Collaboration for Value conference, which will be held in Minneapolis, MN on March 26 27, This unique gathering offers unprecedented access to healthcare s most influential thought leaders. As a valued reader of our whitepaper, use the code VIPMDD at registration and save $200. Learn more at ACOcollaboration.org
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