Healthcare Unbound 2008
This week was the Healthcare Unbound conference. Between the considerable innovation in this market, and the openness with which presenters and attendees share information and ideas, this is always a terrific conference.
The following are some notes from some of the more interesting presentations – be sure to keep scrolling, this is a long post! I’ll follow this up with a post on my presentation at this year’s conference, “How the Network Effect Impacts Adoption of Healthcare Unbound Technologies,” and a wrap-up post.
At 8 am Monday morning, Teri Louden kicked things off. She started her career at Baxter Travenol in the 1970s. Referring to The Graduate, Baxter’s innovative technology of the day was plastic IV bags. Today, things have come a long way from plastics to Healthcare Unbound.
There have been few breakthrough industry segments over time – disease management, home infusion therapy, outpatient surgery – and Healthcare Unbound (HU) is an important pioneering new industry segment.
Teri prognosticated that many of the really breakthrough solutions in health care will come from companies outside of health care – mentioning Intel, Qualcomm, and other electronics and communications companies.
Using CardioNet as an example, Teri described how a new type of solution presents substantive challenges for adoption and effective use. The CardioNet value proposition was unique and required new ways of selling, patient use, and reimbursement.
She introduced Vince Kuraitis and David Kibble, and their topic: The Personal Health Information Network (PHIN): Opportunities and Implications for Healthcare Unbound
The Personal Health Information Network (PHIN): Opportunities and Implications for Healthcare Unbound
Vince introduced the topic with a classic example of the network effect, phones. He asked, what is the value of a single phone? The health care industry is currently the equivalent of two phones representing one to one solutions. The real value comes to the fore when many phones are interconnected, allowing users to contact many other users whenever they want.
Medical Device Start Ups and Connectivity
Entrepreneurs are all about commercializing their novel technology, getting to market, driving adoption and realizing an exit strategy. Yet with the incredible focus on transforming their novel technology into something customers can buy, few startups take connectivity requirements into account until too late in the process. The consequences frequently result in revised go-to-market strategies, like going to market without important features or shifting to niche markets with lower connectivity requirements.
Customers Want More than the Box
There are many barriers to entry in health care: regulatory hurdles, entrenched competitors and gatekeepers like group purchasing organizations (GPOs). Increasingly, connectivity is becoming a barrier to entry – or perhaps a new price of admission. There are few medical device product categories that don’t have some connectivity requirements. (More on the actual requirements below.) But besides buying the embedded device, providers are increasingly interested in buying whole product solutions.
Selling Connectivity – Sales Strategy
Selling anything starts getting serious when it comes to qualification. For you non-sales types, qualification is an assessment of the likelihood of making the prospective sale. This assessment includes the following basic questions:
- Is the potential buyer or prospect really going to buy anything – from anybody?
- Will my product be a serious contender for the sale, or am I simply cannon fodder to help justify a sales process with a foregone conclusion?
- And if I am a serious contender, how does my product match up against the competition relative to the specific needs of this prospect?
- Who all is involved in making the decision of what to buy? (More on this in a future post on Selling Connectivity)
A common problem in markets where connectivity is new or dramatically innovative is avoiding prospects who are more interested in being educated than really buying anything. In situations like this, sales reps can get appointments to talk to prospective buyers very easily because they all hope to learn something interesting. The problem is that few of these prospects intend to buy anything, thus taking valuable time away from actually selling stuff.
Sales Strategy
The solution to this problem is an effective sales strategy. A sales strategy is like a cook book recipe that details precise steps that result in a successful sale and satisfied customer. A good sales strategy describes the quickest and most reliable process for starting with a prospect and winning the sale. Effectively selling connectivity and overcoming the qualification challenge requires a good sales strategy.
Selling Connectivity – New Knowledge
The most striking lesson that I’ve experienced, and witnessed repeatedly, is that when it comes to connectivity, “you don’t know what you don’t know.” This applies to providers (buyers) as much as it does vendors (sellers). When presented with a new problem, it’s human nature to apply current knowledge and mental models in search of a solution – thus the perennial appeal of the “intuitively obvious.” Intellectually we know that problems don’t all fall into the same logical framework. But, for various reasons we tend to apply known solutions to new problems, and only when the outcome is unacceptable do we contemplate the unknown. Decision making insanity aside, this typical approach is inefficient – or worse.
The barrier to effectively applying the intuitively obvious to connectivity results from fundamental differences between embedded system devices (i.e., conventional stand alone medical instruments) and the methods and technologies used for connectivity (i.e., general purpose computing technologies). This dichotomy in the application of the different technologies used in both embedded systems and connectivity, extends from product design to regulatory, manufacturing, marketing, sales, installation, service and support. For the vendor, the entire business delivery system is affected. Provider processes – needs assessment, vendor selection, implementation and ongoing internal support – are impacted as well by these differences.
So how are embedded systems different from connectivity? Embedded systems embody the following concepts:
Selling Connectivity – A Series
I’ve written much in the past about the technical and product development issues of connectivity. Just as important are the issues that revolve around successfully selling your connectivity solution. (If you’re a provider reading this, this should provide a bit of insight into how to buy connectivity, and why sometimes vendors to the crazy things they do.)
You can place two seemingly identical medical devices side by side, with the only visible difference being that one has an Ethernet connector and the other does not. That “small” change makes a world of difference when it comes to selling these two devices. Here’s my list of the areas where adding connectivity to a medical device changes almost everything:
- Required new knowledge
- Qualifying prospects
- Dealing with new decision makers (typically with veto power)
- Selling a solution, rather than selling the box
- Selling one-off systems, rather than cookie cutter widgets
- Aligning incentives
- Making it work, getting paid
- Keeping the customer happy, keeping the system working
- Customers want a whole product solution
