L.E.K. has been actively involved in helping procedure-specific device companies identify and overcome several key challenges and opportunities affecting this segment of the market, including the following:
- An increased focus on risk-sharing payment models is occurring, particularly from health systems seeking to improve outcomes in response to outcome-based reimbursement models being utilized by payers.
- Episode-based solutions are increasingly emphasized as providers are held accountable for entire episodes of care, and as patients move from acute to non-acute settings of treatment; for example, Stryker’s JointCoach program helps providers follow patient progress across care settings and track postoperative knee and hip rehabilitation.
- Changes in relevant clinical call-points and approaches are occurring as providers continue to consolidate and as physician influence on which specific products and devices are used continues to decline. In addition, technology innovation can change which stakeholders should be pursued and how (e.g., interventional cardiologists versus cardiac surgeons for valve replacement).
We help these companies develop practical strategies to address these issues and win in a dynamic global healthcare market.
How we help
Manufacturers of procedure-specific devices routinely engage us to help with:
- Segmentation and targeting: As the U.S. healthcare landscape continues to evolve, we help procedure-specific device providers determine which key accounts they should focus their sales and marketing efforts on, and how to optimize resource deployment to serve each unique segment of the market, often including tools (e.g., hospital profiles and “playbooks,” and targeting apps) for sales teams to help inform MSA-specific dynamics and targeted hospitals’ positions within them.
- Market opportunity evaluation: We help our procedure-specific device clients expand their products and services into new settings of care, market segments and international geographies. This includes both acute and non-acute settings (e.g., hospital outpatient departments, skilled nursing facilities and long-term acute care hospitals), mature as well as emerging markets, and both physician-preferred and more “commoditized” devices. This work often helps inform investment decisions on where (and how much) to invest in new products and/or solution offerings.
- Service and solution expansion: We work closely with our clients to ideate, develop and execute innovative solutions and services that help transform our clients into solution providers to drive increased customer stickiness and satisfaction relative to competitors. These solutions enable medtechs to better diagnose, treat and/or track outcomes from their devices across specific procedures and episodes.
- Value articulation and pricing strategy: We regularly help procedure-specific device clients evaluate and shape gain-sharing models and value-based arrangements that providers are increasingly exploring as alternatives to standard fee-per-device payment models.
- Commercial model optimization: We help procedure-specific device providers assess how to optimize elements of their commercial models, including how to better align sales objectives, how to approach account management and commercial capability resourcing, how to interact with group purchasing organizations, and how to develop marketing and messaging approaches to enhance sales and top-line growth.
Examples of our work
We have helped many companies in the procedure-specific device space recalibrate their product strategy or business model to drive profitable growth and outsized returns.
- Segmentation and targeting evaluation: Utilizing our proprietary methodology and database of providers in the U.S., we conducted a countrywide segmentation and targeting assessment of all U.S. health systems for a leading orthopedic manufacturer. The detailed segmentation and targeting approach has since been utilized by the organization to better service each unique segment of the market, and has redefined how the company approaches its commercial efforts depending on the customer.
- U.S. sales force optimization assessment: We evaluated a leading interventional radiology device manufacturer’s U.S. sales and marketing organization and developed a plan for how to optimize its sales force, including deployment of incremental resources to enhance market coverage that could unlock tens of millions of dollars in sales growth.
- Growth strategy: L.E.K. examined new portfolio additions and M&A tuck-ins and opportunities, as well as services, overall company positioning, potential partnership opportunities and other avenues for growth, for a leading cardiovascular device player. Our research helped identify the most salient opportunities for near-term revenue growth and highlighted several attractive M&A targets for the company to pursue.