A confluence of factors is driving a dramatic shift in healthcare delivery from traditional sites of care such as hospitals and clinics to outpatient and retail care sites such as urgent care clinics and ambulatory surgical centers. Of course, this shift doesn't just change things for patients and providers. It also greatly affects the go-to-market strategies for pharmaceutical and medical device manufacturers. As the care setting evolves and diversifies, stakeholders throughout the healthcare ecosystem have to evolve in kind.
What's Behind the Shift to Alternate Sites of Care?
As with most changes in the healthcare ecosystem, the shift to alternate sites of care is being prompted by several drivers and involves many stakeholders. Rising healthcare expenditures are prompting payers to push to the least expensive care settings. Policymakers are cutting hospital payments and launching value-based care initiatives. As other industries make their products and services more accessible and on-demand, consumers are coming to expect a similar level of convenience in the healthcare setting.
Moreover, healthcare organizations are shifting, themselves, seeking new growth vectors and better management of their business lines and patient populations by converging (for example, with providers becoming payers). Nontraditional players are adding to the mix as well. Private equity made more than 700 deals representing more than $100 billion in investments in alternate sites in 2018, according to information reported in Becker's Hospital Review[ES1] and Harvard Business Review[ES2]. And technology firms are helping drive the shift in sites of care through digital health applications, remote monitoring solutions and robotics advancements.
Identifying and Engaging the Key Sites of Care
Overall, alternate sites of care fall into two buckets. There are the "old but growing" sites of care: traditional sites that have gained volume and importance as care has shifted outside the hospital/IDN, such as ambulatory surgical centers, long-term care and skilled nursing facilities, home health providers, and infusion centers. There also are the "new and emerging" sites of care created largely out of one or more of the growth drivers listed above. Examples include retail clinics, telemedicine, digital health, and employer-managed health sites.
However, the key factors that determine a site of care's importance aren't age or novelty but rather market concentration, growth and decision-making authority. Sites scoring moderate to high across each of these three dimensions have the potential to materially influence the success of a manufacturer's products. Accordingly, they require further investigation and potentially a site-specific go-to-market strategy.
Once sites have been assessed against those three factors, manufacturers should then assess the role of value-based care, relevant product financials and the degree of unique buyer needs (for example, expanded support and services, pricing models or innovation requirements) across each site.
If a site is deemed materially important through this assessment, manufacturers should then determine the most appropriate go-to-market option as well as any impact on their innovation agenda. The most important sites should be engaged with comprehensive go-to-market strategies, commonly including product-oriented sales teams, dedicated non-personal promotion and site-specific service support. Moreover, manufacturers' R&D agenda should adjust to consider the site's future needs as well.
Let's review a few examples:
|Market Concentration||Growth||Decision-Making Authority|
|Ambulatory Surgical Centers||High||Moderate||High||Urgent Care Clinics||Low||Moderate||Low|
|Skilled Nursing Facilities||Low||Low||Moderate|
Ambulatory surgical centers (ASCs) score high to moderate in each first-order dimension, thereby indicating their potential to materially influence the manufacturer's market success. As such, second-order investigation is required (value-based care, product financials and unique buyer needs). For most manufacturers, ASCs' high product spend and unique needs (for example, smaller operating rooms) stipulate that they receive customized go-to-market strategies and influence the company's innovation agenda (such as on-hand surgical tools instead of large robots).
Conversely, urgent care clinics scoring low to moderate in each dimension largely do not require site-specific engagement strategies because the market is fragmented, limiting the ability of manufacturers to engage as a B-to-B partner; expansion opportunities are slowing as prime locations have already been accounted for; and treated cases are low-acuity, prompting limited drug and device purchasing. Though urgent care clinics owned by IPPN/IDNs could benefit from value programs and community health initiatives, independent clinics likely do not need specific engagement plans.
Many organizations have already used this guiding framework to identify their most meaningful alternate sites and craft site-specific engagement strategies. For instance, a detailed assessment of market dynamics and the treatment decision-making process in the long-term care market revealed to a large pharmaceuticals manufacturer the ineffectiveness of engaging individual long-term care facilities with a team of retail sales reps, as these facilities rarely influence treatment decisions. The manufacturer pivoted to an account management model targeting large long-term care pharmacies and chains of facilities with the aim of influencing formularies and protocols. The retail sales teams' efforts were repurposed to focus on influencing demand upstream by engaging patient discharge teams in hospitals and IDNs.
In another case, following an assessment of site of care customer needs, a large pharmaceutical company with a cardiovascular portfolio created a dedicated long-term team whose mandate is to illustrate the value of the company's products and above-brand support on transitions of care to patients in skilled nursing and assisted living facilities.
Or consider this example: Based on a review of private equity's impact on emerging sites of care, a market-leading biotechnology company re-evaluated certain contracting definitions and customer engagement strategies to better meet the needs of decision makers in its therapeutic areas, including private equity firms.
Alternate sites of care will only continue to rise in importance. Healthcare players need to assess the potential impact to their business and design an engagement approach for the most important alternate sites to protect market share and capitalize on growth opportunities.
Throughout the rest of our blog post series, we'll dive into the most meaningful alternate sites and outline how companies can adjust their strategies to remain competitive and grow their business. We'll address questions such as:
- How does your go-to-market strategy need to change to engage alternate sites?
- How do you tailor your engagement strategy, value proposition and support services to meet the needs of a specific alternate site of care?
- In which local healthcare markets is a certain channel most and least concentrated?
- Where and who are the most attractive acquisition targets in a given channel?