Why This Is Important
Why are these statistics useful to the medical device industry? All medtech employees with a role in commercializing products, including R&D, need a comprehensive understanding of the healthcare ecosystem to see the connections between physicians and providers, and how they interact. This information enables an understanding of how resource allocation can be assigned to activities such as voice of the customer. In other words, why not segment and target these groups for all new product development activity and be sure to also capture the voice of the economic buyer at the same time? This allows accurate targeting of all the stakeholders, and recognition of affiliated medical specialties and sites.
The Challenges to Segmenting the Healthcare Ecosystem
Consolidation hasn’t stopped for healthcare organizations and we can expect the number of decision makers to shrink as healthcare organizations become bigger and adhere more to newly evolving corporate standards. Predicting the channel to a purchase decision will be more difficult to assess, especially if it involves bundled contracts. Expect culture conflicts as healthcare system consolidation adds layers of complexity.
Another segment to consider is the alternative care environment. These aren’t just outpatient centers; they also include ASCs, urgent care, long-term care, and home care with new delivery models such as telehealth.
Caregiver segments will continue to evolve. Some medical devices previously utilized by doctors will be delegated to physician assistants, nurse practitioners, or other clinicians. Last, but not least, are patients, who are driving new trends in their care. Medical device product development teams must include direct-to-consumer segment channels.
Overall, clinician environments will become more complicated. Reductions in headcount fly in the face of quality of care goals, and administrative duties continue to rise (does anyone like working with an electronic medical record system?). Decision makers have less time to assess new products or services. This makes the purchase dynamics and cycles that much more complex.
For example, Family Medicine is the largest medical specialty in the top 50 largest medical groups with 86,155 physicians in 46,922 practices. Fast following that number is Internal Medicine with 62,210 physicians in 35,549 practices. Pediatrics ranks third with 41,845 MDs in 19,796 practice locations, followed by OB/GYN with 29,661 doctors in 15,047 sites. The Orthopedic Surgery medical specialty is seventh on the list with 16,282 physicians in 8,265 sites. (Table 2).1
Who Are the Top IDNs?
Another way to look at our customers is by reviewing the top integrated delivery systems (IDNs). The goal of IDNs is to enlarge their networks to align with population health management objectives. The breadth of healthcare facilities owned by IDNs include medical practices, hospitals, nursing homes, rehab centers, and other types of healthcare locations. Healthcare delivery in the U.S. has changed dramatically since 2008, which has affected the drivers behind how purchasing decisions are reached. Consolidation of health delivery networks into entities with common branding and guidelines have a goal to improve patient outcomes and lower cost of care.2 Hospital administrators believe this is how the healthcare system can centralize decision making to achieve economies of scale. This affects many other industries beyond medical devices, such as pharmaceuticals, in a number of ways—managing the formulary, adopting EMRs and other IT tools, gaining commercial access, and interacting with the value analysis committee.
If looking at the number of residential facilities, the largest IDN is Kindred Healthcare Inc, with an estimated 432 facilities.3 Kindred Healthcare is a supplier that operates long-term acute-care hospitals and rehab services throughout the U.S.4 If ranking by the number of doctors, HCA is the largest IDN, with 45,685 MDs on staff.3 If ranking by number of hospitals, HCA wins again, with 223 hospitals in its mix.3
Elective Surgery Procedure Volumes Decline
My accountant just reported that he saw his orthopedic surgeon for surgical follow-up via telehealth. He stated he wasn’t 100 percent comfortable with the process but accepts it as the new normal. On a less anecdotal note, all over the U.S., even in those areas not currently designated as hotspots, patient recommendations are to participate in telehealth visits, reschedule elective procedures, and stay away from hospitals.
The pandemic continues to consume medical resources, edging out all but emergency surgery. Elective, non-emergent surgeries have virtually been halted in the U.S., EU, Asia-Pacific, and India. Elective procedures in China that stopped in January are just now restarting in some regions of the country.5 Patients waiting for knee, hip, shoulder, and back pain surgeries are kept away from medical care for the short term. Many orthopedic and neurosurgeons are reportedly not seeing patients or exploring telehealth options for post-op and non-surgical care, like the one my accountant mentioned using.
The expected changes in surgery are dramatic. In the first quarter of 2020, surgical procedures were expected to decline by approximately 37 percent; in the second quarter, they were projected to drop by 57 percent.5 In a COVID-19 survey conducted in late March, respondents were queried about the impact coronavirus had on clinical practice. The survey found 39 percent of surgeons’ surgery centers were closed, and 56 percent were open for emergent care. One percent of surgeons stated the surgery center where they practiced most frequently was open.
The Medi-Vantage Perspective
Understanding how a crisis can impact your medical specialty is important for forecasting. Intimate knowledge of medical group size, as well as whether there are multiple specialties or if the group is single specialty, helps medical device commercial teams develop the best strategies for physician and provider marketing programs. Specialized VOC techniques can help assess the current situation and, more important, predict the long term situation for targeting medical device decision makers.
Maria Shepherd has more than 20 years of experience in medical device marketing in small startups and top-tier companies. After her industry career, including her role as VP of marketing for Oridion Medical, where she boosted the company valuation prior to its acquisition, director of marketing for Philips Medical, and senior management roles at Boston Scientific Corp., she founded Medi-Vantage. Medi-Vantage provides marketing, business strategy, and innovation research for the medical device, diagnostic, and digital health industries. The firm quantitatively and qualitatively sizes and segments opportunities, evaluates new technologies, provides marketing services, and assesses prospective acquisitions. Shepherd has taught marketing and product development courses and is a member of the Aligo Medtech Investment Committee (www.aligo.com). She can be reached at 855-343-3100. Visit her website at www.medi-vantage.com.