Hospital Business Acumen: The New Sales Differentiator!

The role of the medical sales representative is changing. Hospital consolidation means fewer accounts with more buying power. Hospitals no longer need sales representatives as the sole point of contact to provide product information, conduct in-services or quote prices. Product knowledge can be obtained instantaneously via the web without the need to sit through a PowerPoint presentation; in-services can be done by a company’s clinical specialists and product pricing can be obtained through GPOs, IDNs, RPCs and organizations like MD Buyline.

Today’s healthcare environment demands a new type of sales professional to meet the ever-changing industry challenges. Hospital professionals want “account managers” who are business literate and can navigate through the new normal. These individuals must have a working knowledge of the function and operation of a hospital, and thrive and grow in a world of uncertainty. Account managers must have keen insight and the ability to articulate how their product and/or service provide measurable results to support the clinical and financial proposition to the key buying influences.

These business skills are recognized by hospital professionals when a salesperson demonstrates four (4) key competencies:

  • Financial Literacy- This encompasses how a hospital manages its revenues and costs to achieve a net margin. This requires the sales professional to have a general understanding of business principles with the ability to interpret the numbers on a hospital’s financial statement. Their also experts in understanding payor mix and the hospitals reimbursement strategy especially with the new payer scenarios.
  • Market Insight – All hospitals function in a complex eco-system of providers, payors and patients – each with differing needs. The political climate, social values and culture, economic conditions, population demographics, technology development, physical environment, regulatory agencies and payors are all factors that shape a hospital’s strategy, structure and execution. All of these evolve and change constantly. Sales professional need to have more than a passing familiarity with each of these factors and how ACOs are rapidly changing the healthcare landscape.
  • Operational Understanding – Traditionally sales professionals have been excellent at calling on physicians, individual departments (silos) and materials management. Today there are a variety of other stakeholders involved in the purchase decision such as value analysis teams and purchasing committees and each brings their own logic and emotion to the buying process. Different skills and proficiencies are required to connect with them and understand their business needs, buying process, pre-conceived solutions and desired results.
  • Understanding of Metrics– Financial and operational metrics abound within hospitals. Key is understanding what is measured, why it’s measured, and how to affect each measurement both positively and negatively. The ability to impact metrics especially those that affect positive patient outcomes, reimbursement, net margin and risk mitigation gains the attention of the C-Suite.

The sales professional of today needs to stand out as a trusted advisor or risk being seen as a commodity that provides no value. Sales professionals with business acumen are able to elevate their discussions to business issues and they stay far away from features and benefits.

As business confidants they are informative when describing to value analysis committees how their product positively affects patient outcomes, collaborative when negotiating with Supply Chain Managers and comfortable in discussions of ROI, NPV, TCO and other financial metrics with the CFO. They are experts at ensuring that their value proposition is sound with each stakeholder in the buying process.

When asked to present their solution they are comfortable with clinicians, committees, the C-Suite or the Governing Board.

How competent is your sales organization in understanding the roles and function of a hospital? Read our next blog and take our self assessment to find out!