by Partha Unnava | CEO, Better Walk Inc. | Forbes 30U30 2015
As the CEO of a venture-backed medical device company, I’ve seen firsthand the tremendous amount of buy-in necessary to bring a new product to market. There’s a flippancy that many outsiders approach healthcare innovation with, but to truly make an impact and create disruption, you have to create solutions that financially benefit the entire market and all of its players.
I want to take a moment to break down a few of the players and incentives in the medical device space for any entrepreneurs looking to improve the US healthcare space.
Patients desire better products that cost less. It’s pretty simple. As I mentioned in a different post, we are starting to see the rise of brand in the device industry, and this will play into patient purchasing patterns, in the same way brand affects the pharma industry.
Physicians want better products that are easier to use, and most physicians ask for the following before making or recommending a purchasing decision:
- Data/Studies (depending on the nature of the product)
- Pricing Information
Most physicians are highly aware of pricing patterns of the products they currently on, but will never sacrifice patient well-being for a lower price. Most physicians also have a very large patient volume, so it is crucial that products that they will be using or that their patients will use are incredibly intuitive and well designed.
Within a hospital or purchasing department, after a physician and (often) a patient pushes for a product, it gets down to the financials. You must be prepared to show the financial benefit of your product for the hospital or clinic, as well as a patient care benefit.
To get into the door at most hospitals, you need to be a supplier on a GPO (group purchasing organization) contract. The GPOs help hospitals streamline the total number of vendors they deal with to keep their processes efficient.
Depending on the hospital and the GPO, there are usually financial incentives for the hospital to buy from the GPO approved suppliers. This is important to keep note of.
There are tons of distributors in the space, but with any product, great relationships with the market leaders in your space are extremely helpful and can lead to a lot of long term value.
Distributors can educate you on the market, and help you scale innovation nationally, if not internationally.
Insurance support is critical. Without fitting into a reimbursement code, it’s extremely difficult to get any support or adoption in the marketplace. You must identify the flow of cash in the purchasing of your product, and secure buy in from every person along that chain.
If you truly do create a better product that would demand a higher insurance code, chances are you can show proof your product is better. With this sort of backing, you are well on your way to creating real disruption.
Have any thoughts? Did I get something wrong? Don’t hesitate to let me know! Leave a comment below and I’ll get back to you.