Articles & Resources

Healthcare was essentially a cottage industry. The hospital was the center of the healthcare universe. High census was critical to cash flow and profit. Most incentives were in the wrong way and physicians and other providers "did more to make more."

In the fee for service world of healthcare delivery, salespeople established strong relationships, gave solid clinical messages and focused on service. Their tactical activity had little relevance to the financial issues of healthcare…nor did it need to! The only financial component of a representative’s message consisted of head to head price comparisons. As GPO and PBM contracts became more pervasive, financial acumen expanded slightly to include the tactical pull through rhetoric necessary to communicate product availability through this venue.

While these slight efforts at including some financial or business component to sales and promotion activities may have been adequate for product positioning, they remained detached from the financial and business issues that were emerging in the marketplace.

CHANGES IN THE BUSINESS OF HEALTHCARE:

Hospitals have become vertically and horizontally aligned systems. It is projected that this integration will ultimately evolve into virtual integration. Sophisticated information systems as well as the Internet will pave the way. Systems have established unique and complex relationships with various segments of the community, healthcare and wellness delivery in an effort to vertically integrate and offer one-stop shopping for healthcare. These relationships are usually shrouded in payor mix arrangements that move beyond the traditional fee for service and DRG transactions to encompass per diem and, eventually, capitated agreements. Capitation is perhaps the single most profound determinant of change in healthcare delivery today. Systems that are realizing a growing trend towards capitated arrangements are more concerned with overall outcomes within their system as opposed to the traditional fee for service fostered "departmental budget myopia." Individual physicians have also been faced with complex decisions regarding affiliations and the future of their financial success. While these issues have significant impact on a salesperson’s product performance, for the most part our understanding of and alignment with these issues has been irregular at best.

TRAINING TO DATE:

Most training departments deliver some level of business or financial training for their salespeople. For the most part however, this training is provided in the context of a particular product.

The proverbial "Managed Care" binder:

Readership, retention, and relevance are minimal here! All one need do is think back to our high school experience and wonder how well we would do if presented with a biology test from our old high school days. This kind of "training" just doesn’t work. The relevance to day-to-day selling is missing. Training manuals usually have the typical glossary of terms and the overview of how managed care evolved. Some organizations buy this commodity through the plethora of vendors offering such, or they might create it in-house. Either way, it ends up on a shelf…usually out of date at the time of delivery! When sales people do not see the relevance of this material to achieving their sales goals, they will not learn from it.

This overview of the business of healthcare delivery focuses on the "what" and not the implications. While this may be an acceptable first step in the learning process, our findings support the fact that three crucial questions cannot be answered after reviewing the "broad brushstroke" of information provided in managed care overviews:

• Why is this important to me as an individual salesperson in my territory?
• How do I use this information to position my products and organization in a way that makes sense to my customers?
• How do I help a clinician to justify a decision to a non-clinical influencer?

Pharmacoeconomics-"our loaded deck":

…"We make certain that our salespeople are able to communicate an economic benefit with all of their product presentations"…pharmaceutical company training manager.

We are eager to impart the "formula" information on how our product performs from an "outcomes" perspective. We arm our salespeople with this information and some level of tutoring on how to position it and send them off! What we miss here is the ever so important fact that our customers do not want our outcomes data.

Account Manager Tutorials or "bring in the White Knight"!

National Account Managers and Regional Account Managers are often tasked with the ad hoc duty of "bringing the troops on board with the happenings of the marketplace." Again, while this effort may yield some level of understanding of current issues in a market segment, status of contract negotiations and the like, it can, to some degree remain product focused and aloof from the key business issues in the representative’s territory. In the ideal scenario, salespeople should be providing relevant "terrain" information to the National and Regional Account managers as opposed to the converse.

Tactical Pull Through Direction:

This is not business training. We are again arming our salespeople with product and contract specific information for the purposes of maximizing product acceptance and usage. We are not concerning ourselves with business issues that are important to our constituents! While tactical pull through activities do focus on the contractual relationships between pharmaceutical companies and providers, the focus remains largely clinical with perhaps only a hint of pharmacoeconomic data.

SUGGESTIONS FOR IMPROVING BUSINESS AND FINICAL ACUMEN:

Hearing the Voice of the Customer…

"You need to come to our side of the table"…hospital Chief Financial Officer…

There is no better way to make business and financial training relevant than to utilize individuals who are involved in the business of healthcare. Consider establishing relationships with the following professionals who may provide valuable insight into their world: CEO/CFO/CIO/Medical Directors/Directors of Marketing/Provider Relations/ Managed Care Directors. These individuals can provide a phenomenal level of insight and information regarding the business of healthcare. Preceptorships as well as on-sight training department discussions are two options to consider when accessing these non-clinical influencers. The Healthcare Financial Management Association has courses on issues in capitation. Ask a CFO about this organization or visit its website.

Training with relevant application and measurable outcomes…

We need to assure that we speak to the business of healthcare, not simply how to position our products with some "pseudo-economic add-on" to a clinical message. Business and financial training need not be shrouded in a product congruous message. Simply put, business training is best when it is implemented outside the realm of product information. Training should explain ‘how and why" the business and financial information is relevant to both clinicians and financial decision-makers. Otherwise, business and financial training will be futile. Understanding the financial statement of a hospital or the process for capitated contract negotiation can admittedly be dry and distasteful topics to many. Therefore, the crucial component of why this is important and how it might impact the success of the salesperson is as important as the baseline learning itself. That is why this material is best presented in a case study or interactive format that mirrors the issues sales people face in their accounts. When material is presented in a way that shows and impact on achieving sales goals, participants will learn.

Salespeople also need, as a result of training, tools which will assist them in determining where to go for business information within their markets as well as methods to asses to what degree they are successful in gathering relevant business and financial information and aligning their efforts correspondingly. This should include new skills that assist the sales person in carrying on discussions with non-clinical constituents including administrators.

Training departments need to take the lead in reviewing, revising and launching the much-needed business training component to assure heightened effectiveness in today’s healthcare marketplace. Consider the "constant white water" of change that the healthcare delivery world has faced in recent years. Consider now whether or not your organization is providing training that is commensurate in content relevance to the changes that define the new business of healthcare delivery.