What is in a Name?

By Ibby Smith Stofer

No matter what you call it, this matters to your success in sales and customer satisfaction.

Names change. If, like me, you have spent a great deal of time serving the needs of healthcare providers, then you know this. I’m not talking about name changes due to merger and acquisition trends, or the rebranding efforts that many well-known healthcare providers are undertaking. I’m talking about the simple titles for various departments.

Remember when as a sales rep you called on (or rather, avoided) “Purchasing”, which later became “Materials Management”, and now is referred to as “Supply Chain”?

Why have these labels or titles changed? As healthcare has been required to change in order to focus on clinical outcomes and patient satisfaction, the role of Purchasing has been challenged to do more, reduce cost, support standardization and insure that the facilities are getting the very best price for the products and services utilized. In those long ago days, Purchasing was often told what to buy and from which supplier. Decisions were often clinical in nature, with selling done at that level and the role of purchasing having minimal impact on the sales representative until the decision was made.

Today’s supply chain management has a key role and interface with nursing, finance, clinical engineering and often the C suite. This transition is a much more complex role than simply buying products, which was initially the focus for purchasing.

In the days when reimbursement was based on cost plus, the buyers had only to consider the nurses’ satisfaction and preference, as cost was not the priority. Often their loyalty to current suppliers went unchallenged and prices increased over time.

But alas, those days are long gone. The supply budget in hospitals and other healthcare providers is second only to clinical staff. Often it’s in excess of 40% of the total budget. For years the need to do a better job at managing supplies has been a focus for providers. The name “material manager” reflected this transition. We no longer looked at the job as simply buying; rather we needed to have all materials managed. Manage the need. Manage the selection and negotiation process as well as managing the implementation/changeover and certainly the ongoing supply and supplier relationships as well as cost.

That is quite a different role with obvious importance to the financial health of the hospital. Yet there were some omissions and new developments that would require both more name changing as well as increased responsibility for this critical department if hospitals were to continue to provide quality care with an ever-decreasing revenue stream.

The current focus on population healthcare (requiring the full path of patient care from the ER to the home or other non acute care facility) means that many hospitals and Integrated Delivery Networks have merged or aligned not only with similar facilities but with the traditional non acute care facilities. These include skilled nursing facilities, long term care facilities, home care providers, clinics, surgery centers and retail clinics. Additionally, the integration of physician sites continues to add complexity to the job of managing supplies, costs and distribution.

Healthcare executives are not only expecting, but requiring that the department formerly known as purchasing now look at the full spectrum and manage both supplies and costs for very diverse centers of care. It is Supply Chain Management indeed.

Today supply chain in healthcare frequently includes logistics and distribution as well as selection and management of the thousands of items utilized in patient care across the full spectrum of care. From the ER to the home and all points in between, supply chain is critical to lowering costs, standardizing care and improving outcomes and patient satisfaction. The significance of that is earning supply chain a seat at the C suite table in many healthcare settings.

You may be thinking: what does all this mean to me as a representative calling on hospitals or other healthcare providers?

Simply put, you need to understand the role and responsibilities of all departments and people who have a role in deciding to purchase your product or service. No longer can a single area carry the day and close the deal.

As you plan your sales campaign, you need to understand the scope of care that the customer manages and you need to know where you can help them to achieve their goals. Not every product or service will be appropriate to span the complexity of care the customer provides, but all must demonstrate that they are aligned with one or more of the key measures the customer deems essential.

These include: process improvement, clinical outcomes, patient and or clinician satisfaction and safety, maximizing standardization and of course, cost effectiveness.

Selling product features and benefits without being able to articulate how they relate to the above considerations will often result in frustration, if not failure.

Crafting your messages to center on what is important to each stake holder and recognizing that supply chain has to consider all of these measurements will enable you to differentiate yourself and your company as ones who “get it” and provide value that is meaningful. But one last thought: meaningful value without ongoing support and commitment to achieve promised results is a path of future disaster.

Changes like these make our jobs challenging and rewarding. Understanding the various decision makers’ roles and responsibilities sounds like a reminder no one would need, but as things change it is often good to take a look back as well as a look at the future. No one knows what names we will call on next in our careers as healthcare suppliers.

Please share your thoughts with us on how we can be better partners by assisting you in meeting the financial challenges your customer faces when selecting your product or service. In order to be better, we need your feedback. Send us a note at info@medonecapital.com with your ideas. Thank you.