From Suppliers to Strategic Partners: How Medtech can Help Hospitals Thrive in a Post-COVID world | Deloitte US has been saved
By Jay Zhu, managing director, and Charlotte Ehrlich, senior consultant, Deloitte Consulting LLP
States have begun to restart their economies and patients are beginning to return to hospitals for services they had put off. Between March 1 and June 30, US hospitals will have lost $202.6 billion, according to the American Hospital Association (AHA). Up to 30 percent of delayed surgeries will not return, according to some estimates.1
In response to the financial strain caused by the COVID-19 pandemic, many hospitals and health systems are searching for new and creative strategies to reduce costs and improve efficiencies. As they transition from responding to the COVID-19 pandemic to recovering from it, hospitals are actively preparing for the return of deferred procedures. Medtech manufacturers have an opportunity to help their customers prepare while forging stronger relationships.
For years, it has been getting more challenging for medtech to compete on product features and price. Some companies are vulnerable to being replaced by cheaper, good enough competitors in an increasingly commoditized market. Many companies have expanded their value propositions from clinical benefits to operational and economic outcomes by offering workflow optimization, operational advisory, and other programs or services. However, many providers are not ready to engage medtech on these expanded offerings and typically don’t see medtech as having the expertise or resources to be an advisor or partner on those issues.
However, with the unprecedented challenges created by COVID-19, many providers have become more receptive to new or creative solutions and might be more willing to partner with medtech manufacturers. This can create a unique opportunity for medtech to transform their value propositions and elevate from selling products to selling outcomes. To do that, medtech executives should understand how priorities have changed for their customers, examine their existing value propositions and offerings, and ensure they have aligned themselves with the new needs of their customers. Successful medtech companies could be partners to hospitals and health systems by introducing new offerings to help providers overcome new challenges and priorities created by COVID-19. They should also refine their messages to be more COVID-19-relevant and collaborate closely with hospitals and health systems clients to help them achieve their desired outcomes.
Four pressing provider problems medtech could help solve
Here’s a look at four pressing issues for hospitals and health systems today, and strategies medtech leaders should consider:
1. Supply chain and inventory: Ensuring an adequate supply of personal protective equipment (PPE), ventilators, and other devices remains a challenge for many hospitals, even as the surge of COVID-19 patients has diminished. Medtech companies should explore strategies to ease the pressure on provider supply chains to obtain these critical products by:
2. Staffing: Maintaining proper staffing was a challenge for hospitals as they prepared for COVID-19 patients. As deferred services restart, providers could see staffing shortages in some areas where demand might temporarily exceed capacity. Medtech can help their provider customers by:
3. Deferred procedures: As my colleague Steve Burrill noted in his May 28 blog, hospitals and health systems should focus on bringing back patients who deferred care because of the pandemic. It could take two to six months for volume to return to pre-pandemic levels, according to a survey of 50 clinical leaders, conducted by the Deloitte Center for Health Solutions. This relatively optimistic estimate might reflect a level of confidence among respondents that their organizations can make patients feel safe about returning. Medtech can help providers strategically restart delayed procedures by:
4. Financial assistance: The Coronavirus Aid, Relief, and Economic Security (CARES) Act injected $100 billion into hospitals and health systems, but many industry leaders and analysts agree it isn’t nearly enough to keep up with the lagging revenues and other upheaval. Medtech companies can help providers address their near-term financial challenges and improve affordability by:
Four factors to consider when prioritizing value
Medtech companies should identify an initial list of COVID-19-related value themes based on the new needs of their customers. Consider these four factors when prioritizing and refining the value proposition:
Customer value and experience has taken on a new dimension in the post-pandemic world. Medtech companies that can match their offerings to the new needs of their customers will likely be able to bolster trust and build stronger relationships that can endure well beyond the COVID-19 crisis. We see this as a unique and optimal time for medtech to elevate from transactional relationships and create long-term strategic partnerships beyond COVID-19.
Acknowledgement: Heather Nelson, senior manager
Endnotes
1. Impact of Coronavirus on Personal Health, Economic and Food Security, and Medicaid, Kaiser Family Foundation, May 27, 2020
2. Americans are delaying medical care, and its devastating health care providers, Washington Post, June 2, 2020