Focus on the Business Model of Your Target Market in Healthcare Tech Sales

Focus on the Business Model of Your Target Market in Healthcare Tech Sales

One big challenge with technology in healthcare is this: Technology is moving (and has already moved) WAY faster than our regulatory system & reimbursement models are able to...I sat on a state regulatory board for 9 years.

And here's the deal: most healthcare regulations (statutes/laws) are built around service delivery methods from the 19th century, and any new regulations or policies are simply bolted on to ancient regulatory laws.

That's one of the big reasons why licensure and Telehealth hasn't been fully resolved (even though we've had that capability since I was a budding clinician in 2012).

The same goes for reimbursement. Our reimbursement model is built around billing codes, usually associated with procedures or time. New technology that, as an example, allows a clinician to effectively treat a diagnosis and requires billing 1/2 the codes/time automatically faces challenges from clinicians and providers who only see potential revenue declines.


Overcoming the "Reimbursement" Challenges in Healthcare Innovation & Technology



I was recently speaking to a group about hybrid models of care and technology in health care and the fact that my insights come from being somebody that was on a licensure & state regulatory agency for eight years. The fact that healthcare, from both regulatory bodies to even the reimbursement models, finds itself dealing with payment models are way behind the technology that we've developed.

Some of the tools the technology —the communications tech & the way we can deliver service— is so far ahead of where our regulatory and payment models are that it's very difficult to take a healthcare technology of any kind on the provider side and draw a clear and quick path to market. The main reason for this is that, a lot of times, the payment issue needs to be addressed. For example: Who pays? How do they pay? How do we get it paid for by payers (patients or insurance companies)?

I interviewed a guest on the podcast a while back that runs a venture firm in healthcare and his big idea was this: make sure that the business model of the technology company aligns with the business model of the provider (the economic buyer).

His reasoning was that, if you have for example, a technology that makes it possible for a physical therapist to treat a patient with back pain in 6visits instead of 12, on the surface everybody thinks that's really great. It means the patient is going to spend less time in physical therapy. It means the clinical outcomes are going to improve and it is going to be much quicker. It means it's going to be much more efficient.

The provider on the other side is looking at it like this: "Well, now I'm cutting my revenue in half potentially." Maybe they could see double the patients and the revenue wouldn't drop at all but, you still have to get over that initial hurdle.


Addressing the Concerns of the Economic Buyer & Their Business Model

In my mind, when we talk about hybrid models of care, we are talking about delivering the right care at the right time to the patient. We also need to do it in a way that is not perceived by Healthcare Providers as cutting them out of the equation or limiting them in the equation. It needs to align with their business model. You need to understand the monetary or the monetization scheme that the provider organization uses.

For example, if this provider organization is billing a global service delivery fee like lump-sum payments or some sort of shared risk, they might be more apt to adopt some kind of technology that has this efficiency play involved. They might be more willing to adopt a technology that cuts their overhead cost in so far as delivering service. If you're dealing with an organization for example that is strictly fee for service, then the value proposition of "you're going to be able to get people out the door in half the time" is not exactly what you want to lead with.

You want to lead with expanding capacity, increasing the number of unique patients coming into the clinic, which can generate more referrals and return business, etc.

It becomes very important as a technology a software or device company, if you're selling into healthcare specifically on the provider side, to focus on that the business model of your target market and then tailoring your value proposition in a way that does not undermine their revenue their their profitability, etc.


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