Are We Ready to Say Goodbye to Sales Reps in Medical Device?
A vital part of the surgical team
When you’re wheeled in for a hip or a spinal fusion surgery, you’ll see a team of people in surgical masks and scrubs. That team is composed of a surgeon, an anesthesiologist scrub tech, a circulating tech, nurses and maybe students, and a device sales representative. It can be hard to tell who’s who because of the masks, but there is definitely a health-care industry representative in that team, and he or she is there to provide invaluable technical support to the surgeon because they know precisely when and how a device is to be used.
Device reps are the experts of their products. They train intensely for their jobs. Before they’re allowed to sell anything to surgeons, they have to know their products inside and out. Companies ensure the sales rep aptitude is high through rigorous testing and sales product training, often using cadavers or simulated labs. This is why med reps can be a huge asset to surgical teams in surgery.
Not many people know that.
But that practice is beginning to be questioned, mainly because of the costs associated with medical device sales reps that show up as higher prices to the end customer. As more M&A activity from provider organizations leads to the highest degree of consolidation seen in history, hospital IDN’s are controlling more of the demand for devices in a centralized fashion. There have been very aggressive efforts to cut costs that are being driven by changes in reimbursement, bundled payments, and other market pressures. Hospitals are now taking a closer look at the costs of everything that’s happening in the O.R. and across all areas of care. Many administrators have even begun to question if there indeed needs to be medical representatives present. Some medical device companies are also evaluating the role of the sales rep in the operating room. Hospitals have started implementing stricter rules, with some going as far as banning reps in the OR.
Is going rep-less really the solution?
Are we ready to let go of device reps who have seen provided a great service to surgeons and their operating teams? With highly technical expertise, and hundreds of surgeries under their belt, are we ready to hand off this responsibility to an already burdened hospital staff? What are the hidden costs of going rep-less?
In my interview with Rep-Lite’s President, Rick Barnett, he said “…the problem with rep-less is that you take a tremendous amount of responsibility and put it right on to a hospital employee. Well, the hospital is already maxed out. So now we’ve got an even bigger problem because we’re asking people to probably double or triple their daily work with the same amount of time.”
An innovative solution
Inevitably, I would argue that we are not and most likely never will be a rep-less industry. However, Mr. Barnett does offer an interesting solution. Hence the name of his company, “Rep-Lite”. Rep-Lite was founded to provide a needed solution for medical device manufacturers and care providers to continue providing amazing patient care while keeping the cost of devices low.
Instead of having teams of manufacturer sales professionals and device experts present at a hospital account, Rep-Lite works as a middle-man between device companies and hospitals and places a support team member at the hospital, one who has undergone extensive training in multiple medical equipment and device brands. This effectively streamlines the support and sales process, while allowing maximum support to health-care providers to do their job without interference. Bottom line, the Rep-Lite service rep provides the support and doesn’t cost as much as a traditional device sales rep.
The drawback? Well, this type of model must be supported with a strong contractual position by the device vendor. Also, with less incentive to protect the business, a service rep may not have the initiative to go above and beyond for a surgeon or hospital. In a highly competitive market, having sales professionals present to protect and grow business is crucial. However, with a shrinking number of hospitals and an increasing number of sole-source or dual-source contract positions, the model may not be too far from wide-spread reality. It is gaining traction though, and time will tell.
Mr. Barnett said,” …the Rep-Lite model really can provide value across the spectrum of care and not only for the providers and our healthcare providers but the vendors and the manufacturers and the innovative companies that are bringing innovating to this space.”
It is enlightening to learn about companies like Rep-Lite that have discovered ways to push the envelope to add value to both device companies and providers alike.
In our follow-up interview with Mr. Barnett he said “We feel like it’s important that when we are engaged with a client, the Rep-Lite folks focus not only on the products but on the strategic initiatives that those clients want to move forward in the space. They (Rep-Lite representatives) are not covering multiple companies or multiple lines, it’s all focused on our client’s portfolio.”
I like that Rep-Lite hires and trains people to focus on their clients exclusively. This allows the service reps to develop expertise and relationships that translate into value and improved outcomes.
The bottom line
When asked by device companies currently using Rep-Lite, “What if I want to hire my Rep-Lite person (because they are doing so well and they are doing their job amazingly)” Mr. Barnett replied, “It’s one of our value propositions. It’s a career path for the Rep-Lite folks. I think for our clients what is critical is the fact that they can bring on a Rep-Lite person, they can make sure he or she responds well to customers, they’re grasping the technology, they can really work with the direct employee, and there’s a need for a direct person, it’s a phone call. As long as the person is in good standing with both Rep-Lite and our clients, I 1000% always agree to let them go.”
What employer would not like to de-risk a hire? I like that feature of their service. Rep-Lite provides a great opportunity for companies to de-risk the hiring process. It ensures that health facilities have the expertise needed by physicians for their surgeries while also improving efficiency and reducing the cost.
There will always be a need for healthcare industry representatives expertise, especially with the constant innovation happening in technology.
Ultimately, I would agree with Mr. Barnett. I believe that the healthcare industry is not ready to go rep-less. Rep-lite may be the way forward in the years to come.
Listen to the full interview with Rick Barnett here on the Outcomes Rocket Podcast.