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Healthcare startup strategy: How to market and sell in the era of reform

Healthcare startup strategy: How to market and sell in the era of reform? While healthcare reform is well underway, a true shift in care delivery and economics appears to be more of a looming threat than a proven reality. The question remains: How do you manage and grow a successful business in the dynamic environment […]

By on February 17, 2014

Healthcare startup strategy: How to market and sell in the era of reform?
While healthcare reform is well underway, a true shift in care delivery and economics appears to be more of a looming threat than a proven reality. The question remains: How do you manage and grow a successful business in the dynamic environment of today while positioning for the future?

We asked a few of the River Cities’ portfolio company CEOs some of the most prevalent questions on the minds of healthcare management teams when preparing for the year ahead. Part I of the roundtable (add link to other column) addressed the general concerns about the year ahead and shifts in the industry that may arise. Part II discusses sales and marketing and how the CEOs plan to thrive in the face of reform. Participants included:

What advice would you give to another CEO that is selling products and services to health systems/providers today?

Terry Edwards, PerfectServe
“If a new start up or early stage company, I’d make sure there is a clear line of site in my business model between how I generate revenue today and how I’ll generate revenue five to seven years from now. Will there be a difference? We are at the beginning of the end of the old health care system and any time, money and energy invested now needs to payoff in the new system of the future, which is forming now. But we still need to feed ourselves today.”

Tom Dugan, Surgiquest
“You should have a very clear understanding of your customers and why the clinical and economic benefits of your products make a difference for them. Give them the ammunition and justification to carry the case through the value analysis committee. This requires savvy marketing and clinical teams, but also a well-educated sales force. ”

Jim Pearson, NICO Corporation
“Be 100% confident that your technology is innovative, is a platform technology versus a ‘widget’, and has demonstrated improved clinical and economic outcomes.”

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Mark Gilreath, EndoChoice
“It’s more critical than ever to be able to clearly communicate your value proposition.”

What are the most prominent responses the sales teams are getting from prospective customers when being turned down?

Tom Dugan, Surgiquest
“Capital constraints are the most typical issue we see.”

Terry Edwards, PerfectServe
“Capital constraints, inability for an executive champion to build consensus among his/her peers and, thus, prioritize dollars.”

Jim Pearson, NICO Corporation
“The most prominent responses include, ‘I need to see the clinical evidence in the form of a published study’ and ‘We are not approving any new capital purchases at this time.”

Mark Gilreath, ENDOChoice
“Lack of budget.”

The differentiation between payors and providers continues to disappear. Do you expect this trend to continue? What effect do you anticipate this evolution will have on your business and sales force?

Tom Dugan, Surgiquest
“I expect the trend to continue, but not become the norm. It requires a special organization and culture to mesh both the payor and provider role (e.g. Kaiser, Geisinger, Mayo, etc.) and the profit motive in healthcare, plus the insurance industry, is too strong. Sales force education, targeting and direction are keys to success. Understanding the customer, both from a clinical need and economic perspective is crucial to becoming a valued partner.”

Terry Edwards, PerfectServe
“I think most of the leading health systems will become population health managers in some form or another. This is the driver of the differentiation. Population health managers will be judged based upon their outcomes, cost and patient satisfaction.”

Jim Pearson, NICO Corporation
“Personally, I believe this trend will continue and that truly innovative technology platforms that provide improved patient and economic outcomes will be the benchmark for successful businesses in the future. It is too early to be able to predict the long-term impact of our sales force, although we do see an increased need for an ongoing clinical presence with our customers.”

Mark Gilreath, EndoChoice
“The payor/provider profile is starting to blur in some regions. For those companies that offer solutions to lower costs and contribute to improved outcomes, this will be a huge opportunity. Sales forces are facing a requirement to evolve and develop new skills of selling in the C-suite of the hospital. It’s a bold new world in healthcare today, and companies will need to adapt rapidly to thrive.”

What are the top three key performance indicators that you are using?
?Terry Edwards, PerfectServe
“Number of weekly meetings and conversations our sales people are having with prospects, monthly pipeline growth and velocity.”

Jim Pearson, NICO Corporation
“Our three top performance indicators are:
1. Validation of improved patient outcomes through published peer-reviewed clinical articles
2. Increasing number of academic university hospitals and medical centers, private hospitals, and rural/community hospitals that have adopted the new standard of care in minimally invasive corridor neurosurgery
3. Increased number of neurosurgeons trained on the new neurosurgery approach called the 6 Pillar Approach
Ultimately, achieving these indicators will lead to our fourth performance indicator, year over year revenue growth.”

Tom Dugan, SurgiQuest
“1.Revenue/growth
2.Profitability
3.Production margin”

To read the full discussion, visit River City Capital Fund .