Breaking into the fortress that is the NHS with your medtech innovation can sometimes seem a bit of losing battle. But it needn’t be so. Seasoned commercialisation strategist Keith Morris explains how SMEs learn deal with the NHS procurement process
As the NHS strives to transform to meet the increased and changing demands for its services, commissioners and healthcare providers still have to deliver safe, efficacious and cost-effective services at local level. The industry sectors that supply the NHS with pharmaceuticals, medical devices and other technologies have a plethora of ideas, products and services that all claim to improve patient care, outcomes and costs – in fact, too many for the NHS to afford them all.
This new and challenging market requires industry to evolve and change the way it develops and promotes its innovative new technologies.
All companies want to get their innovative products noticed and adopted, reduce the time to first revenues and ensure their products are routinely used and not ‘put in the cupboard’ after a pilot evaluation. Their goal is to move through the phases of the innovation curve as quickly as possible. This is especially true for pre-revenue, investor-backed medtech SMEs.
Every NHS commissioner and provider has to manage the health service’s increasingly scarce resources, to invest only in innovative products that will make a real impact on the quality and cost of delivering care. The strategic drivers of improved patient outcomes and value for money are placing greater demands on the business case to support the adoption of medical technology.
Decision-making is becoming an increasingly lengthy process involving multiple stakeholders and requiring much diverse information, all before any NHS procurement can start. Simply offering cost-saving, often based on national-scale data, cuts little ice with decision-makers. A thorough understanding of the impact any new product will have on the wider aspects of healthcare delivery at the local level is just as important as promised financial benefits when convincing the wider stakeholder group to adopt a new technology or product.
How then can an SME, new to doing business with the NHS, get its innovation noticed and adopted, and so gain early traction in the marketplace? Quite simply, high-quality market knowledge and planning is vital for success. This article discusses how medtech SMEs can better prepare to successfully enter this particular market.
Rather than the textbook definition of value as ‘quality/cost’ (Michael Porter suggests patient outcome is a proxy for quality), I favour Clayton Christensen’s concept of a value proposition or ‘job to be done’ (JTBD). By asking what ‘job’ healthcare professionals need to do that isn’t being done effectively, efficiently or at all, it focuses your effort on helping to solve immediate problems, and you will be better placed to present your technology’s true value.
Asking what ‘job’ your product can help get done also focuses your mind on whether your product can satisfy an unmet need or is just a better way of doing what is already being done. Both are valid purposes, but knowing which your product achieves will enable you to have a more realistic expectation of its value and a more productive conversation with your customer.
The US healthcare system is facing similar challenges to the NHS. Stateside, medtech companies are having to change the way they engage with healthcare providers. The days of a sales-driven, transactional relationship are rapidly disappearing. In fact, many hospitals are taking active steps to limit sales representatives’ access to clinicians and C-level administrators. A more strategic ‘partnership relationship’ is replacing the old ways of working. A few large companies (GE Healthcare, Fresenius and Alcon) are leading the way in developing a customer-excellence model, moving away from incremental product and cost improvements to a more ‘whole-system solutions’ approach.
SMEs should take the initiative and adopt a truly marketing-oriented, customer-focused approach when dealing with the NHS. In turn, the NHS needs to be more open to this new model and less suspicious of the industry’s motives.
While product excellence is still a must – a product has to do what it claims to do, be safe for the patient and user, and actually be usable, according to Treacy and Wiersema, a shift from having the best product (product leadership) to offering the best total solution (customer intimacy) is the new discipline of market leaders. The close link between these new models and Christensen’s value proposition are clear, and I believe when executed well they are the key to a new relationship between medtech and the NHS.
Healthcare is increasingly clinically led, ideally based on good-quality and accepted evidence. As a result, today’s NHS demands a highly sophisticated case for adopting new medical technologies, placing greater demands on data and evidence to support their value – and at the local level, since this is where the decisions are now made. I see this evidence base as comprising three parts:
In undertaking evidence reviews, The National Institute for Health and Care Excellence (NICE) observes that often the available evidence is insufficient or doesn’t match the intended claim, which makes good-quality clinical evidence vital. The NHS’ Innovation, Health and Wealth report defines innovation as ‘an idea, service or product, new to the NHS, which significantly improves the quality of health and care wherever it is applied’.
So here’s a dilemma: An innovative product may have good scientific or clinical evidence but will not, by definition, have been used in the NHS before. Therefore, evidence of its utility will be scarce. In practice, innovative products will have been studied in post-market clinical studies. They may also have been evaluated through a few pilot studies. Therefore, it’s critical to gain at least preliminary evidence of utility from these studies, where possible. Adoption of innovation critically needs innovators and early adopters, both at the individual and Trust/CCG level. That means real NHS procurement customers who are prepared to take an ‘informed risk’ to trial and then adopt the innovation into routine use. It also needs the medtech industry to help reduce the risk in that decision as much as possible.
Moving forward, the 2014 NHS Five Year Forward View recognised the role of innovation in transforming its services. It concluded that ‘blockbuster’ stand-alone innovations will probably be rare, and it is seeking to combine different technologies and changed ways of working to transform care delivery, calling it ‘combinatorial innovation’. Initiatives such as the test-bed sites, a focus on researching high-impact issues such as GP out-of-hours services and health and care ‘new towns’ reflect a move towards innovation at the level of whole care delivery.
With particular reference to devices and diagnostics, the intent of the Five Year Forward View is to aim for quicker adoption of ‘cost-effective’ innovation. A new NICE programme, Commissioning through Evaluation, aims to examine real-world clinical evidence in the absence of data from randomised controlled trials on medtech, which is often hard to secure.
NICE will also expand its work on devices and equipment, and support the best approach for rolling out high-value innovations. Operational pilots to generate evidence on the financial and operational impact on services – while decommissioning outmoded legacy technologies and treatments to help pay for them – are an example cited. Whether this promise will help resolve the ‘adoption dilemma’ of innovative technologies remains to be seen.
A well-constructed, evidence-based case for adoption is more likely to help convince forward-thinking NHS commissioners and providers to pilot test your product in order to realise its utility benefits. An understanding of the impact of any new device on the wider aspects of healthcare delivery, for example, patient experience, workflow, resource management and staffing, is just as important as the clinical, financial and economic evidence when convincing the wider stakeholder group to go with the product.
Your financial case has to be relevant to the paying customer. National scale cost-saving models based on ‘my product can save the NHS millions of pounds’ or ‘diabetes costs the NHS hundreds of millions of pounds every year’ may indicate market potential and appeal to investors, but your NHS procurement customer needs to know what it will cost them to purchase and use your product, the savings they can realise, and how and when they will get a return on their investment.
While no less important, health economic models address the macro-economic benefits of a change in care and are most useful for commissioners. Models often rely on published data from many studies. Innovative and new-to-market products often won’t have sufficient and relevant data, but if they are based on existing technologies there may be a good history of research and use, as well as some level of economic modelling.
The NHS Five Year Forward View states ‘at a time when NHS funding is constrained it would be difficult to justify a further major diversion of resources from proven care to treatments of unknown cost-effectiveness. It will be easier if the costs of doing so can be supported by those manufacturers who would like their products evaluated in this way.’
In the USA, where healthcare is facing similar challenges to the NHS, medtech companies are moving away from incremental product and cost improvements to a more ‘whole-system’ solutions approach. Increasingly, I expect that the customer will want to see demonstrated the shared vision and goal to improve patient outcomes and solve real problems, and have a business model and strategy that is adaptable.
The activities of product development and marketing are highly inter-dependent and need to be run concurrently and not sequentially. Marketing is not just advertising and promotion, it is a structured and detailed analysis of the environment in which you and your customer are operating. The strategy and plans to enter the market that come out of this analysis will, in turn, inform what your product design and required functionality should be. It’s a continuous and iterative process.
Cacciolatti and Fearne have shown that in many SMEs, marketing strategies aren’t based on a robust framework, and the associated activities are often ‘simplistic, haphazard and often responsive and reactive to competitor activity, often based on intuitive ideas rather than formal data’. Several other studies have shown that marketing in SMEs is often unstructured or its importance is not fully understood, and that often there is a lack of marketing expertise coupled with limited resources.
In conclusion, despite the immense challenges facing medtech SMEs trying to enter the NHS marketplace, I believe it’s both necessary and possible.
There are people in the NHS committed to improving the care they give and always looking for new ways to do this. Find them, share their goals and aim to deliver customer excellence.
I suggest ‘thinking big and acting local’: by all means, have the vision of NHS-wide adoption, improving the lives of large numbers of patients and saving the NHS millions, but focus on starting at the local Trust or CCG level.
When it comes down to it, very little in business is insurmountable. I’m reminded of the riddle ‘How do you eat an elephant?’ The answer? One bite at a time!
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