You Call This an Improvement?

My team and I were sitting around our small conference table (actually my former dining room table) in our 10’ x 10’ conference room trying to understand the slow pace of domestic sales versus the much more frenetic pace of overseas sales. Ponder as we might, we could not understand why our unique product had slow sales despite it being independently documented to be functionally superior to comparable alternatives used for capture of surgical plume. Our pricing is competitive and current research has indicated its ability to capture viable bacteria present in the plume suggesting a role for it as an infection control product. Further, it has enjoyed almost universal acceptance during clinical trials. Where was the hang-up; why the interminable delays to purchase?

We started to review the well-worn system that we older folks are familiar with: explain the product’s value proposition to the surgeon who, in turn, refers the salesperson to the Resource Nurse or Operating Room Director who will then process the request to the next in line. Whala! An invitation to initiate a clinical trial appears and, when successful, is followed by a purchase order and the new or “new and improved” technology is available for patient care.

Today, a lot has changed in the process since surgeons employed by health systems have diminished input regarding purchasing decisions and have almost no time to discuss the value proposition with the informed salesperson. Although the surgeon has maintained his/her importance as an advocate, it is more likely today that the salesperson must first get an interview with the O.R. Director who then decides on the correct pathway for the product in question.

Perhaps the next step is the Materials Manager which is often a non-starter except if that individual has an interest in the clinical value proposed and if the pricing is or can be made to be acceptable. The next step is the Value Assessment Committee where the product is further evaluated but without a spokesperson present who is most knowledgeable about the product and most capable of answering any questions.

On the other hand, the Director may pass the product right to the Committee which is most likely done at small hospitals where clinical opinion is still most important.

Once the Committee says, “O.K.,” the clinical trial takes place which is fairly controlled and surgeon access is often limited. Should the product succeed, then a new round of discussion ensues because frequent utilization represents additional expense and the purchasing manager gets his/her due.

The net result of this system that determines the use of new technology in the O.R. is that of DELAY which can go on for months or even greater than a year. Alternative revisions of current technologies are reexamined and trialed once again until any alternative choice is exhausted. The cost of these delays are prohibitive for young start-up companies while the doctors and their patients are deprived of using products that could result in improved patient outcomes. This conundrum is caused by hospitals being asked to purchase technology without first knowing outcome results…except when independently tested functionality is available for administrative analysis. Even then, superiority of results can be, or often are, trumped by contractual considerations rather than concern for quality of patient care. This is the elephant in the room. Few want to talk about it but superior products, at reasonable prices are often shunted aside by the material managers in order to maintain year-end “rebates” and/or on-going discounts from a distributor who supplies multiple products under multiyear contracts…even though all contracts allow for a percentage of substitutive products.

Compare this new business model used by most hospitals today with a recent experience of mine. I worked with one of our independent distributor’s representatives at a Western hospital chain where doctors, nurses, technicians and salespersons commingled in the same lounge which provided easy access to a transfer of knowledge about our product. No one took advantage of the opportunity and boundaries were observed. A seminar for the nursing staff preceded a two (2) day clinical trial with universal acceptance by the clinical staff. “You solved our smoke problem.” Sales began by the second week to allow for the paperwork involved and continue to expand. WHAT A CONTRAST!

So why the delays to decision-making in larger health systems?

You tell me….since it makes no sense to delay use a product that has been independently tested to offer advantages to patient outcomes. Please write to me and help me understand this new paradigm of product evaluation and purchase since I thought this was the age of “value based healthcare.”