This week on The Buyer’s Seat, I interviewed Mike, a former CTO with over 16 years of experience in the Fortune 500 healthcare space to take a vertical approach and dive into health tech enterprises.
Healthcare has been a rapidly changing industry for at least a decade, and its transformation has implications not just for technology, but for technology sales as well. So to help us think through that, we’re very pleased to have Mike.
Here are three key takeaways from the conversation:
1. Healthcare is unique as an industry in that it is so huge, yet still so immature and it lacks a lot of standards. Markets and business models can crop up and collapse in short periods of time, which is very exciting from a salesperson’s perspective because there’s always opportunities and unsolved problems, but it does create a bit of chaos. Mike’s advice is that you can’t do enough research or understand the domain that you’re selling into enough because it changes so frequently.
2. Providers saw a huge reduction in revenues this year. And so for people that are selling into that space, the magic words are in year return. Thnk through: how do I position my solution? I am doing so in a way that reduces infrastructure costs? How am I positioning this, that I’m making this easy to buy? Because something that’s too far to the future is not going resonate.
3. Although payers are currently a little bit more resilient financially (they had a reduction in claim volume that paired off with a reduction in investment in returns), they’re going to be be a lot more thoughtful about the financials. So they won’t necessarily have some of the constraints as you might see on the provider side, but still they’re not spending money grossly at this point.
Panel Discussion Highlights
Let’s dive into the different sectors of the market. You mentioned three different sectors, payers, providers, and services, being impacted in different ways. Why don’t we start with providers?
So, specifically for people who are selling technology to healthcare providers, there are a couple of things I would say. One is, additional digital tools to reach the patients will be an area of investment I’m assuming. The hardening and improvement of telemedicine will continue to be important. But if there was one message I would give, when you’re talking to financially stressed organizations, it doesn’t matter if healthcare or it’s other, it’s three magic words: in-year return.
Why? Because if providers can stretch the maintenance another year, they’re going to, but if you can show an in-year return, that will get attention and break through the fact that most providers have a long list of things that aren’t getting funded, that the management desperately wants to fund. And in that kind of circumstance in your return, especially if the return is reduced, infrastructure costs not return, not reduce labor, will be right at the top of the most attractive things for people to look at.
That makes a lot of sense. Before we move over to payers, is there any other pieces of advice you’d offer to those selling to providers?
For folks that are selling to providers, it isn’t that hard to do research on the state of the organization you’re talking to you. If it’s a nonprofit, typically quarter results are published. If it’s a for-profit quarterly, results are published and spend the time, but there may always be a different set of challenges. Healthcare is so local and it’s done in so many different ways that really being a student of how a particular business operates will make a huge difference. And when I say be a student, I don’t mean go spend a month on this. It’s probably a couple of hours a week, making sure you read the articles and ask your customer to teach you about how their business works. Back in my selling days, I was amazed at how patient my customers were to explain to me how their business work.
Cool. Well, let’s move on then. What’s going on with payers?
It’s kind of been a mixed bag because payers saw a big reduction in claim volume, but they also saw a huge reduction in investment returns, which competed with that. And then, the Affordable Care Act has some aspects like the minimum medical loss ratio, so, in some cases, they were actually doing rebates. In other cases, payers also stepped up to help providers in that area. But generally, my perception is payers have come through this more, it’s been less directly devastating to them.
There’s also some theories from industry sources that payers were partially less hit because the folks who were let go first were people like restaurant workers who generally don’t have health care benefits in a lot of cases. So, the payers, I think had a bit of a better time and it should be a bit less disruptive, but what’s going to happen with employment over the next year? And what are they going to need to do in terms of reimbursement strategy and telemedicine? So it’s a similar message, I think almost for all of it that whatever you can do to show a rapid return and certain return.
For folks who are doing services in the healthcare industry, unlesss they’re providing things like telehealth or certain types of engagement things that might show a real return, my suspicion is they’re seeing very similar issues where their customers don’t have money in a lot of cases. Again, your mileage may vary, don’t use generalities — use the conditions of the account you’re calling on, but I think broadly when the tides have gone down as much, it’s really hard to have a boat go up.
Yeah, absolutely. And they’re so embedded into the supply chain there that they’re pinned on both sides of it. Well, I want to go back to something you mentioned — that the current events could actually create exciting and positive change for the health care system. I want to hear a little bit more about that. Sometimes I think in sales, we focus on problems to solve, things that are broken that we can fix, but I want to hear a bit more about the silver lining and the positivity.
Absolutely. I think there are those structural things in healthcare, the things that we learn, but I think it’s just so exciting to see telemedicine exploding and to see telemedicine volumes going up and to see the online triage services, et cetera.
I think there are a lot of issues to be worked on, but I do think that the delivery of healthcare in the pandemic has accelerated the experimentation cycle on telemedicine in a way that who knows how many years, five years, eight years, not in terms of the technology itself, but in terms of the experience with the technology and starting to get an understanding of where it works best for versus where it doesn’t. And I suspect, I hope that will pay dividends for the delivery of healthcare in our country for a long time.
I’m actually very optimistic that these pressures are going to really enable healthcare systems that make the changes and face up to changes that are necessary — that otherwise would be very difficult.
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