Planning for Success in an IDN Environment

Manufacturers can be a valuable partner helping IDNs create a more compelling economic & clinical value case to external constituencies.



In previous articles, I’ve discussed the accelerating consolidation of healthcare delivery organizations into integrated delivery networks (IDNs). This dynamic changes the rules for manufacturers in multiple dimensions. The trend shows no sign of slowing down, which only reinforces my conviction that manufacturers need to challenge the assumptions built into their commercial models if they plan to remain viable. Future commercial success will depend on your organization’s ability to rapidly align marketing and sales with the evolving purchasing decision processes of IDNs.

The good news is that there is a general realization across the industry that the rules of engagement with IDNs have indeed changed and we see many manufacturers working to understand the implications for their commercial organizations. The bad news is that many organizations are struggling with the myriad factors that accompany the shift from the traditional “brute force” approach of extensive product promotion and individual physician engagement to a value-driven approach geared for new constituencies and decision-making criteria.

To achieve success in the new marketplace, manufacturers must be able to create a compelling economic and clinical value case for their product that resonates with IDN decision makers. The value proposition needs to be consistent with the IDN’s positioning to their key stakeholders – patients, payers and employers. This notion of value proposition alignment is becoming increasingly important as IDNs broaden their population health offerings and move towards models where more of their payments are at risk.

The importance of understanding an IDN’s quality and cost agenda cannot be overstated.  This need is reinforced by CMS’ growing emphasis on value-based purchasing penalties and bundled payment programs. IDNs will increasingly manage treatment of patients across multiple care settings, and payers are pursuing more risk-based contracts where management of variation in quality and cost becomes critical. 

Here are several steps manufacturers must take to successfully position themselves, their products and services and, ultimately, their supporting value propositions to achieve critical mass on IDN formularies:

  • Embrace an outside-in approach:  Understand what constitutes value in the eyes of an IDN’s external constituencies (patients, payers) and then work inward to understand how this translates into value requirements of key internal stakeholders like, P&T decision makers and clinical influencers.  Be sure to define value from both a clinical and economic perspective and relate it to the IDN’s strategic priorities in terms of target populations, disease states and go-to-market approaches (e.g. direct to employer offerings) as appropriate.
     
  • Think beyond the product itself:  Explore opportunities to partner with IDNs in the development of treatment protocols and processes or technology improvements that maximize the effectiveness of interventions.  These moves can help an IDN differentiate itself and, if it is a service enhancement subject to intellectual property protection (similar to some surgical protocols), they might even offer royalty revenue potential for manufacturers.
     
  • Tear down the walls:  IDNs are struggling with the challenge of multiple data platforms and the lack of robust, linkable data for their target populations and disease state.  Manufacturers, with their extensive knowledge of diseases and treatments along with their analytic capabilities, can be a valuable partner in identifying at-risk patients, creating treatment protocols and helping IDNs create a more compelling economic and clinical value case to external constituencies.  Today, much of this knowledge remains inside company walls and is vastly underutilized.
     
  • Build a high-performance market-driven model:  To effectively engage IDNs, manufacturers must have the ability to customize their commercial approach based on the IDN’s targeted disease states and value requirements, and the overlap with the manufacturer’s core competencies and products.  Once identified, manufacturers will need to deploy account management teams with the requisite skills and incentives to strategically manage an IDN account.  These teams will need to work closely with their health economics group to develop powerful economic and clinical value cases that resonate with IDN decision makers.

The challenges that manufacturers face as they evolve their IDN marketing strategies to a more strategic, integrated and value-based model are not inconsequential. Nor are they likely to be addressed with a “one-size-fits-all” approach. However, those that move quickly to create the supporting go-to-market models, processes, and analytic capabilities to deliver differentiated value to their IDN customers will create a strategic competitive advantage. 


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