Your Guide to Selling New Medical Equipment to Value Analysis Committees
In the past, sales reps who wanted to pitch a new medical device or piece of medical equipment to a hospital or other medical provider usually approached the doctors at the practice. As with other types of sales, it was the job of the rep to woo and win over the doctors. A rep not only wanted to show a team of doctors how the equipment he or she was selling was better, he or she usually also wanted to get on the doctor’s good side.
Sales combined having a solid pitch for a product and having a little something extra to offer the medical team, such as fantastic seats at a sporting event or tickets to an upcoming play or concert. But changes to health care policy and health care reform have meant changes to the way sales reps can sell to institutions.
For example, the Physician Payments Sunshine Act, which is part of the Affordable Care Act, passed with the intention of making the financial connection between physicians or hospitals and the companies that produce medical devices and equipment more transparent. Essentially, if a company compensates a physician or hospital in any way, such as by giving him or her a free pair of concert tickets or by buying a medical department lunch, it needs to report that information. The details of the compensation then get published in a database that’s open to the public.
The reason for highlighting any possible financial connections between medical providers and medical equipment companies is that doing so can illuminate any conflicts of interest a doctor or hospital might have when it comes to recommending or purchasing a product. For example, a patient might be more hesitant to consider a particular procedure if he or she learns the doctor received a large bonus or another incentive for purchasing and recommending the devices needed to perform that procedure.
Additionally, exposing the potential connections between providers and medical equipment companies to the public could help lower health care costs. When physicians make recommendations purely based on what benefits their bottom line, they might end up suggesting products that are more costly than other options. Discouraging those incentives by publishing them in an accessible database could potentially lower health care costs.
Another significant change in the way sales reps have begun selling new medical equipment to hospitals regards who the reps end up pitching. In another effort to reduce health care costs, many institutions and hospitals now have what is known as value analysis committees. Now, instead of only directing their sales pitches to doctors, sale reps and medical equipment manufacturers need to participate in a value analysis process that ultimately gets their product up for review by an entire room full of people.
What Is the Value Analysis Committee?
In short, the value analysis committee acts as the gatekeeper to the hospital. It determines what new products the hospital or institution will acquire, and whether those products will replace equipment the hospital already uses.
To minimize conflict and the feeling that the committee could potentially work against the interests of certain hospital staff, it is usually made up of employees from several areas of a hospital. Although the exact makeup of the committee will vary from institution to institution, value analysis committee members typically include:
- Nursing staff members
- Purchasing staff
- Liability agents
- Supply chain management staff
Along with the structure of the value analysis committee, the size of the committee can vary from hospital to hospital, and can even change from one year to the next at the same hospital. For example, UCLA Health’s current committee contains 25 members. Although the significant requirement for joining the committee is that a person is an employee of the hospital system, UCLA’s policy also requires at least one person from each of the following areas to be a member of the committee:
- Medical staff
Another factor that influences who will be on the committee or the size of the committee is the size and type of the hospital. A smaller, independent hospital might have a value analysis committee for each department, made up of doctors and administrators from that department. Hospital systems and larger institutions often have a single, larger value analysis committee, made up of staff members from several departments.
Why VACs Exist
Hospital value analysis committees are becoming more and more common for several reasons. Healthcare reform, specifically the Affordable Care Act, and changes in how hospitals receive reimbursement, have caused many institutions to pay closer attention to costs and to explore potential ways of reducing costs.
One way value analysis committees can help hospitals reduce costs is by ensuring the hospitals will regularly use the products they purchase. Institutions don’t want to spend money on a pricey new medical device, only to discover an older model it already owned works better.
Another way a committee can help to reduce costs is by encouraging bidding from competitors. When sales reps focused on winning over physicians, the process of selling to hospitals was much more informal. Now that many places use committees, a formal process often accompanies a sales pitch, which typically involves the completion of forms and the necessity of pointing out not only the medical but also administrative, benefits of a device or piece of equipment.
Cost-cutting isn’t the only reason VACs exist. The committees can potentially provide a series of other benefits to the hospitals and institutions they serve. Those benefits include:
- Improving patient safety — Patient safety has been a significant concern in health care in recent years, and many hospitals are taking whatever steps they can to improve it and to reduce patient risk. Part of the thinking behind having a committee to evaluate and approve or deny the purchase of any new medical devices or equipment is that having consensus and a variety of points of view can lead to an increase in patient safety. For example, having a committee of doctors from a range of different specializations can help ensure they’ve covered all the bases when it comes to evaluating the safety and efficacy of a medical device.
- Improving transparency in sales— Along with the Physicians Payments Sunshine Act, using a value analysis committee to make purchasing decisions for a hospital can help make the sales process more transparent. Some hospitals are implementing specific, detailed policies their committees must use when evaluating a product and when deciding to approve or reject a proposal.
- Improving impartiality of product acquisitions— A value analysis committee is one example of when it can be beneficial to have a multitude of voices. The more perspectives a committee has, the more likely it is to be impartial when evaluating whether or not to move forward with a purchase. When only one or two people are the decision-makers, it is much easier for bias to enter into the equation.
Why Sales Reps Need to Care About the VAC
The most significant reason a sales representative needs to care about and learn how to interact with value analysis committees is that, for the time being at least, these committees are the future. Value analysis is a new process, as the first instance of the phrase didn’t appear until 1977. Nowadays, the majority of hospitals have VACs in place, with a vast majority of them introducing a committee within the past decade.
Since the process of pitching to and interacting with a committee, versus communicating with doctors directly, is considerably different, reps who hope to continue to make sales need to learn how to adapt and adjust to the expectations of hospital value analysis policies.
Strategies for Medical Device Manufacturers to Address Hospital Value Analysis
Figuring out how to navigate the process of interacting with a value analysis committee can be an uphill climb for some sales reps and manufacturers, especially if they are used to working with just one or two doctors. The first step to figuring out how to navigate the process is to learn what methods a value analysis committee uses when evaluating a new device or piece of medical equipment.
The VAC Process
Although the specific requirements and processes of a committee might vary from institution to institution, generally speaking, the VAC process might look like this.
Step 1: Data Gathering
During the first step or phase, the committee will want to learn as much as it can about a medical device or piece of equipment. Members of the committee might review the literature about the device, such as white papers or case studies, or they might look at the results of clinical trials involving the equipment, if available. They might also look at opinions offered by third-party evaluators, such as Hayes, ECRI and MD Buyline, to get a sense of how the product performs.
The data-gathering phase can also include an assessment of how the new medical device will benefit the hospital. For example, the committee might look at how a new piece of equipment will reduce costs or improve the standard of care offered to patients. If the product replaces something the hospital already uses, the committee might compare the two products. It will look to see if the new product offers a considerable advantage over the existing one.
Step 2: Initial Negotiation
Depending on the approach the value analysis committee is taking, once it decides to move forward with the potential purchase of a product, it will often begin a period of initial negotiations. During that time, it might issue a request for proposals, outlining what it is seeking. It might look at a list of vendors and sales reps it has existing relationships with and directly approach those companies. During the initial negotiations, the committee will often outline what sort of pricing it anticipates, and what type of services and features it is looking for.
Step 3: Trial Run
The third step in the VAC process is often a trial run involving the product or device. How the trials pan out depends in large part on the products. It is up to the value analysis committee to outline who will test the devices, where to test the devices and how best to evaluate the products at the end of the trial.
When the trial concludes, usually the member of the committee who oversaw the tests and trials presents the findings to the committee. If the trial had a positive outcome, this person is usually going to be responsible for highlighting the good features of the device, including what products it can replace.
Step 4: Final Approval/Rejection
The last step in the process involves the committee voting to approve the new device or deciding to reject it in favor of the current method of doing things, or of a competitor’s device. Even if the committee decides to approve the device, that might not be the end of the road.
In some cases, the decision to purchase the device might move to an even higher-up committee or to hospital executives, who have the final say on whether or not to move forward with the purchase.
What to Keep in Mind When Interacting With a VAC
Medical device manufacturers and sales reps can use several strategies when addressing hospital value analysis committees, making an initial pitch or filling out the initial paperwork for a committee.
One strategy is to focus on providing the specific information a committee wants and needs to know about a product. For example, here are a few questions many VACs have about medical device value analysis:
- Does this replace something the hospital already uses?
- Is this device safe?
- What is the device made of?
- Will the device improve the quality of care the hospital can provide to patients?
- How much does the device cost?
Before a device manufacturer or sales rep makes contact with a VAC, it is important to do some research on the committee. First, it helps to understand the role or function of the committee, as that does vary from hospital to hospital. For example, some committees contain members from a single department, while others have a membership that represents a more diverse mix of hospital staff.
You also want to keep the individual roles of each VAC member in mind. For example, some will be clinicians who are likely to use a medical device or piece of equipment. Others are administrators who perform a mostly supervisory role. Still, others might be from the financial department of a hospital, and others from procurement, meaning they have an insider’s point of view when it comes to vendors. Putting together some bios and having at least a little bit of information on each member of the committee can help you decide which approach to take when interacting with them.
It’s also important to have an understanding of the products the VAC reviews. Some committees only review medical devices, while others might be responsible for assessing and reviewing all equipment the hospital purchases.
In many cases, finding one committee member to champion the device or equipment you are trying to sell can be helpful for getting a committee to consider your product.
What to Provide the VAC
The more information you’re about to provide a value analysis committee, and the more engaging and well-presented the information is, the more likely you are going to be to convince them to support or purchase your device or equipment. Knowing what the committee wants and who they are can help you determine what you need to give them.
First, it’s a good idea to proactively provide answers to their questions before they ever ask you. For example, it’s very likely the committee will look a new piece of equipment and wonder if something the hospital currently uses performs the same function.
The answer to that is probably yes, but it’s your job to convince the VAC your device performs better than existing products. To do that, you can provide comparison charts that highlight how the features of your company’s device are an improvement on devices already on the market. Your documentation might focus on:
- How the equipment/device is more effective than similar products on the market
- How the device is a better/higher quality than competitors
- What your device does differently from similar product
- How your device is safer or offers better control of infections compared to other products
Providing the committee with statistics and figures to back up your statements is imperative, as you need to be able to prove that your product does what you are claiming it does. If there have been clinical trials involving the product you are selling, provide the committee with copies of the results of those trials. While they can find out that information on their own, being upfront about it will help you make a better impression.
It also helps to consider the specific needs of hospitals in this day and age and how a piece of equipment or device meets those needs. For example, it’s becoming increasingly common for hospitals to be latex-free. If the product you are promoting is latex-free, that information can attract the attention of the committee, pushing you to the front of the list.
Remember, cost is a huge consideration for many hospitals and their value analysis committees. Make things easier for the committee by telling them the price of the device or equipment, as well as the cost of ownership. You can take things a step further by also providing a cost-benefit analysis and by providing figures that demonstrate the potential return on investment for the device.
You might also consider giving the committee details and information on the best use of the product. For example, include an explanation of how it works and how to store it. If the product requires regular maintenance and care, include the specifics on that, such as how frequently the manufacturer recommends servicing the equipment, and whether hospital staff can maintain it on their own.
Any time a hospital introduces new devices or equipment — or, in the case of administrative technology, introduces a new tool to use for workflow and filing — there is a period of education. Be sure to include details on the necessary training for the device, including whether the manufacturer provides training and if that training can take place onsite.
Remember You Are Still Marketing
With the increased use of VACs at hospitals around the U.S., the face of who medical device manufacturers and sales reps are marketing to might have changed. The processes of pitching and getting a product into a hospital might be more complex.
But remember that at the end of the day, you are still marketing a product. When presenting a new medical device, any tools you can use to make your presentation more engaging and attention-grabbing can help your cause and help convince VACs to work with your company.
For example, 3D animation video can provide hospital committee members with a clear, easy-to-remember overview of a device or piece of equipment. At the end of a long day reviewing bids and project pitches, members of a committee are going to be more likely to recall the animation they saw, compared to the hundreds of stats and figures they read in brochure after brochure.
Ghost Productions has been producing animations and interactive media to break down and explain complex medical concepts since 1994. To learn more about how animation can help you perfect a pitch to a VAC, contact us today.