Strategies for University Hospitals
How do university hospitals best work with medtech?
The relationship between Big Medtech and university hospitals can be tense. Often, medtech is accused of opaque pricing, of selling Ferraris to physicians, of disguising a short-termist approach based on quarterly sales targets under the banner of partnership. But is there an alternative? Here we talk to Neil Wright, commercial director at Guy’s and St Thomas’ NHS Foundation Trust, a major London trust, about a different, longer-term approach.
Wright appreciates just how frustrating it can be to work with big, decentralised, bureaucratic public healthcare systems. “Most medtech companies take a scattergun approach to big university hospital systems. They will reach out to many individuals and be less strategic and targeted in their approach. Historically, the approach is ‘make many and broad approaches to hospitals teams and hope one of them is successful.’”
This can often lead to failure and wastes time for everyone. “One medtech company explained how they have been working on a project for years with a senior clinician who kept saying that it was nearly there and that he just needed to get final approval from the hospital executive team. They finally realised that the physician had never had any serious discussions with senior management. Getting to the truth took years. The supplier described how they had to take direct action to speak to someone to get the real position!”
He also says that many university hospitals are bad at saying no. “Companies will be strung along with maybes and pilots for years because no one has the confidence to say no.”
Wright and colleagues have pioneered a new approach which involves building deeper, longer-term relationships. This doesn’t necessarily lead to a sale for the supplier. But it should massively accelerate the adoption of the best new technology and care pathway redesign, resulting in better patient care and ultimately opportunity.
“Working with an industry partner we might identify 4-5 projects that we want to do. These are defined as things that will impact on patient outcomes by physician teams. We say to the supplier ‘help us develop and design five patient pathways. Work with us to show how we can apply the technology. But do so in a product agnostic basis.’”
For suppliers, Wright sees his role as being “a Babel Fish”. In the Hitchhiker Guide to the Galaxy this is a small fish which people slip into their ears that provides instantaneous universal translation. “Sometimes I will have a long conversation with a medtech company and then I need to translate what they are saying into NHS-speak internally. We are constantly playing back the two languages to provide a mutually comprehensible and win/win solution.” This builds mutual trust and ensures both parties feel reassured.
“This approach enables us to speed up tech adoption. So we can change a patient pathway after 3-4 years, not 10. For the supplier, the opportunity leads from, say, 50 sales of products into the current pathway in 10 years to, maybe, 200 of product placement in the improved pathway.” But, he says, there is a risk that the medtech collaborator will not be the one who wins the final sale.
Response from medtech has been mixed. Some companies have got it. But the leopard often doesn’t change its spots, says Wright. “With one supplier it looked as though everything was working well, until we discovered they were still following more traditional methods and approaching our physicians behind the scenes.”
This new approach reflects broader organisational changes at Guy’s and St Thomas’. As commercial director, Wright, for instance, has a much broader remit than many of his colleagues and competitors elsewhere. “As a job title in the NHS ‘Commercial Director’ often means procurement. We go way beyond that.” In fact, Wright is in charge of commercial initiatives, generally. “That means primarily ways of generating money in non-standard ways. That could be working on specialised commissions for the NHS, industry partnerships, healthcare education and events or innovative services and viability and assessment projects.”
With 50 people in the team, the focus is much broader than elsewhere. Wright says similar departments in other big university hospitals have just 5-10 people. Guy’s and St Thomas’ also has an in-house legal team which, he says, makes an enormous difference to cost, expertise and time.
Wright says Guy’s and St Thomas also had to take a good long look in the mirror before engaging in long-term partnerships. “We did an audit of suppliers to find out if they thought we were a good partner.”
This yielded some interesting negatives. ‘The response was that we could be hard to deal with. We often said “maybe” for very long periods of time.”
“So we say to our partners now, ‘we won’t say ‘maybe’, when it is ‘yes’ or possibly ‘no’. And we will give you the access you need to work with us at a high level. We won’t muck you about.”
So what does Wright want from suppliers? Big Medtech tends to be fragmented and siloed by product sets. Ideally, he wants is a single point of contact for the entire company. That, he says, often proves to be a tall order. “We find that alliance managers typically don’t have these powers in real life. The reality is that power resides in the siloed divisions.” There are a number of companies that are now embracing the ‘enterprisewide approach’ with Medtronic being one of the long standing exponents. “Through its IHS consultancy arm, it can genuinely do this.”
His remit goes far beyond medtech. “We want to work with biotech, big tech and service providers as well,” he says. The sensible thing, he says, is to identify your own strengths and work with partners who can fill your weaknesses. “NHS trusts often try and develop things that they really shouldn’t. For example, as a university hospital, we should not seek to develop in isolation hardware solutions or even complex apps (especially when there are already very good offers in the market) because this is not our area of expertise.”
He says Guy’s and St Thomas’ has also brought far more management rigour to outsourcing services.
He sees this as an area with a lot of growth potential. “If an expert provider can do a better job at a lower price to high quality, then we have no problem with outsourcing.”
As with the UK NHS private finance initiatives of the 1990s and 2000s, he says the devil is in the detail. Take a hypothetical example. “You might look at a contract for outsourcing. Those running the service in-house thought it was making a £1m profit. But they hadn’t factored in a series of general overheads which were shared. Doing this turned the £1m profit into a £1m loss. The next step was to look at all the processes within the service before it was outsourced. ‘Why are you sending five paper reminders to patients before they turn up at material cost?’ And the real answer to that was ‘because we’ve always done it that way.’”
In other words, he contends that you only outsource when you have real clarity on the business model you are actually deploying and a robust specification for what is needed. To ensure true value for money is assessed a public sector comparator model should be utilised for each opportunity.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
