Maria Shepherd, President and Founder, Medi-Vantage04.01.20
The Permanente Medical Groups represent a behemoth compared to the rest of the medical groups in the U.S. Kaiser employs more than three times the number of physicians as the second largest group—Fresenius Medical Care Holdings. The Permanente Medical Groups also bear some scrutiny. They are eight physician-led groups located in nine U.S. states and Washington, D.C., with more than 19,000 doctors in 578 offices. Fresenius, on the other hand, has significantly more worksites than Kaiser, but fewer physicians per worksite. The same goes for Ascension Health, Veterans Health Administration, and others (Table 1), which all have lower MD coverage. Most of the top 10 are IDNs and the top 50 organizations possess and maintain approximately 20,757 medical sites with a reported 102,600 physicians employed.1
Why This Is Important
Why are these statistics useful to the medical device industry? All medtech employees with a role in commercializing products, including R&D, need a comprehensive understanding of the healthcare ecosystem to see the connections between physicians and providers, and how they interact. This information enables an understanding of how resource allocation can be assigned to activities such as voice of the customer. In other words, why not segment and target these groups for all new product development activity and be sure to also capture the voice of the economic buyer at the same time? This allows accurate targeting of all the stakeholders, and recognition of affiliated medical specialties and sites.
The Challenges to Segmenting the Healthcare Ecosystem
Consolidation hasn’t stopped for healthcare organizations and we can expect the number of decision makers to shrink as healthcare organizations become bigger and adhere more to newly evolving corporate standards. Predicting the channel to a purchase decision will be more difficult to assess, especially if it involves bundled contracts. Expect culture conflicts as healthcare system consolidation adds layers of complexity.
Another segment to consider is the alternative care environment. These aren’t just outpatient centers; they also include ASCs, urgent care, long-term care, and home care with new delivery models such as telehealth.
Caregiver segments will continue to evolve. Some medical devices previously utilized by doctors will be delegated to physician assistants, nurse practitioners, or other clinicians. Last, but not least, are patients, who are driving new trends in their care. Medical device product development teams must include direct-to-consumer segment channels.
Overall, clinician environments will become more complicated. Reductions in headcount fly in the face of quality of care goals, and administrative duties continue to rise (does anyone like working with an electronic medical record system?). Decision makers have less time to assess new products or services. This makes the purchase dynamics and cycles that much more complex.
For example, Family Medicine is the largest medical specialty in the top 50 largest medical groups with 86,155 physicians in 46,922 practices. Fast following that number is Internal Medicine with 62,210 physicians in 35,549 practices. Pediatrics ranks third with 41,845 MDs in 19,796 practice locations, followed by OB/GYN with 29,661 doctors in 15,047 sites. The last of the top five is the Cardiovascular Disease medical specialty with 17,476 physicians practicing at 9,233 sites (Table 2).1
Who Are the Top IDNs?
Another way to look at our customers is by reviewing the top integrated delivery systems (IDNs). The goal of IDNs is to enlarge their networks to align with population health management objectives. The breadth of healthcare facilities owned by IDNs include medical practices, hospitals, nursing homes, rehab centers, and other types of healthcare locations. Healthcare delivery in the U.S. has changed dramatically since 2008, which has affected the drivers behind how purchasing decisions are reached. Consolidation of health delivery networks into entities with common branding and guidelines have a goal to improve patient outcomes and lower cost of care.2 Hospital administrators believe this is how the healthcare system can centralize decision making to achieve economies of scale. This affects many other industries beyond medical devices, such as pharmaceuticals, in a number of ways—managing the formulary, adopting EMRs and other IT tools, gaining commercial access, and interacting with the value analysis committee.
If looking at the number of residential facilities, the largest IDN is Kindred Healthcare Inc, with an estimated 432 facilities.3 Kindred Healthcare is a supplier that operates long-term acute-care hospitals and rehab services throughout the U.S.4 If ranking by the number of doctors, HCA is the largest IDN, with 45,685 MDs on staff.3 If ranking by number of hospitals, HCA wins again, with 223 hospitals in its mix (Table 3).3
The Medi-Vantage Perspective
Understanding medical group size, whether there are multiple specialties or if the group is single specialty, helps medical device commercial teams develop the best strategies for physician and provider marketing programs. Specialized VOC techniques can help assess the current situation and, more importantly, predict the long-term situation for targeting medical device decision makers.
References
Maria Shepherd has more than 20 years of experience in medical device marketing in small startups and top-tier companies. After her industry career, including her role as VP of marketing for Oridion Medical, where she boosted the company valuation prior to its acquisition, director of marketing for Philips Medical, and senior management roles at Boston Scientific Corp., she founded Medi-Vantage. Medi-Vantage provides marketing, business strategy, and innovation research for the medical device, diagnostic, and digital health industries. The firm quantitatively and qualitatively sizes and segments opportunities, evaluates new technologies, provides marketing services, and assesses prospective acquisitions. Shepherd has taught marketing and product development courses and is a member of the Aligo Medtech Investment Committee (www.aligo.com). She can be reached at 855-343-3100. Visit her website at www.medi-vantage.com.
Why This Is Important
Why are these statistics useful to the medical device industry? All medtech employees with a role in commercializing products, including R&D, need a comprehensive understanding of the healthcare ecosystem to see the connections between physicians and providers, and how they interact. This information enables an understanding of how resource allocation can be assigned to activities such as voice of the customer. In other words, why not segment and target these groups for all new product development activity and be sure to also capture the voice of the economic buyer at the same time? This allows accurate targeting of all the stakeholders, and recognition of affiliated medical specialties and sites.
The Challenges to Segmenting the Healthcare Ecosystem
Consolidation hasn’t stopped for healthcare organizations and we can expect the number of decision makers to shrink as healthcare organizations become bigger and adhere more to newly evolving corporate standards. Predicting the channel to a purchase decision will be more difficult to assess, especially if it involves bundled contracts. Expect culture conflicts as healthcare system consolidation adds layers of complexity.
Another segment to consider is the alternative care environment. These aren’t just outpatient centers; they also include ASCs, urgent care, long-term care, and home care with new delivery models such as telehealth.
Caregiver segments will continue to evolve. Some medical devices previously utilized by doctors will be delegated to physician assistants, nurse practitioners, or other clinicians. Last, but not least, are patients, who are driving new trends in their care. Medical device product development teams must include direct-to-consumer segment channels.
Overall, clinician environments will become more complicated. Reductions in headcount fly in the face of quality of care goals, and administrative duties continue to rise (does anyone like working with an electronic medical record system?). Decision makers have less time to assess new products or services. This makes the purchase dynamics and cycles that much more complex.
For example, Family Medicine is the largest medical specialty in the top 50 largest medical groups with 86,155 physicians in 46,922 practices. Fast following that number is Internal Medicine with 62,210 physicians in 35,549 practices. Pediatrics ranks third with 41,845 MDs in 19,796 practice locations, followed by OB/GYN with 29,661 doctors in 15,047 sites. The last of the top five is the Cardiovascular Disease medical specialty with 17,476 physicians practicing at 9,233 sites (Table 2).1
Who Are the Top IDNs?
Another way to look at our customers is by reviewing the top integrated delivery systems (IDNs). The goal of IDNs is to enlarge their networks to align with population health management objectives. The breadth of healthcare facilities owned by IDNs include medical practices, hospitals, nursing homes, rehab centers, and other types of healthcare locations. Healthcare delivery in the U.S. has changed dramatically since 2008, which has affected the drivers behind how purchasing decisions are reached. Consolidation of health delivery networks into entities with common branding and guidelines have a goal to improve patient outcomes and lower cost of care.2 Hospital administrators believe this is how the healthcare system can centralize decision making to achieve economies of scale. This affects many other industries beyond medical devices, such as pharmaceuticals, in a number of ways—managing the formulary, adopting EMRs and other IT tools, gaining commercial access, and interacting with the value analysis committee.
If looking at the number of residential facilities, the largest IDN is Kindred Healthcare Inc, with an estimated 432 facilities.3 Kindred Healthcare is a supplier that operates long-term acute-care hospitals and rehab services throughout the U.S.4 If ranking by the number of doctors, HCA is the largest IDN, with 45,685 MDs on staff.3 If ranking by number of hospitals, HCA wins again, with 223 hospitals in its mix (Table 3).3
The Medi-Vantage Perspective
Understanding medical group size, whether there are multiple specialties or if the group is single specialty, helps medical device commercial teams develop the best strategies for physician and provider marketing programs. Specialized VOC techniques can help assess the current situation and, more importantly, predict the long-term situation for targeting medical device decision makers.
References
Maria Shepherd has more than 20 years of experience in medical device marketing in small startups and top-tier companies. After her industry career, including her role as VP of marketing for Oridion Medical, where she boosted the company valuation prior to its acquisition, director of marketing for Philips Medical, and senior management roles at Boston Scientific Corp., she founded Medi-Vantage. Medi-Vantage provides marketing, business strategy, and innovation research for the medical device, diagnostic, and digital health industries. The firm quantitatively and qualitatively sizes and segments opportunities, evaluates new technologies, provides marketing services, and assesses prospective acquisitions. Shepherd has taught marketing and product development courses and is a member of the Aligo Medtech Investment Committee (www.aligo.com). She can be reached at 855-343-3100. Visit her website at www.medi-vantage.com.