Rep-less models are promising but hospitals need to be better prepared and manufacturers must create more comprehensive solutions to bring true value.
When some manufacturers launched their rep-less solution last year, it seemed a timely and relevant solution for providers.
In many ways, the launch was in direct response to demands from providers that devices be made available at lower costs to better align with the economic realities and reimbursement conditions of value-based care.
|Rick Ferreira, president and CEO. Intralign|
In that context, “going rep-less” has ranked high on the list because of the magnitude of cost savings it can offer. Take away the “service component” of the medical device sale, and devices should theoretically cost a lot less — 40% or more, by some estimates. This makes mathematical sense when one considers that for the typical medtech company, sales costs often comprise more than 40% of the total budget.
Add to this, the fact that hospitals have long felt uncomfortable with the rep’s role, whose presence and influence in the operating room (OR) makes it difficult for the provider to fully control their purchasing, materials consumption and general flow of the surgical episode. Inherently, the rep’s interest is to maximize device sales, while the provider’s interest is to optimize device usage – two objectives that often run counter to each other.
The rep-less model looks like an ideal solution when considering the financial and governance pressure the provider finds itself in today. Simply calling up the device makers and asking them to “leave the rep at home and just send us the goods” is unlikely to work.
In fact, unless the provider has secured preparedness for such an initiative, it will likely compromise patient safety, surgeon satisfaction and clinical outcome scores. Steps in preparing include:
- Assessing the impact (positive and negative) of the rep in the current situation. Hospitals and surgeons vary in terms of their reliance on reps and for some hospitals, the ideal is a “blended” solution with more controlled rep usage.
- Ensuring that all parties involved are aligned with the objectives and change processes of “going rep-less”. This means having surgeons understand both the advantages and challenges of going rep-less, and motivating the c-suite to secure champions across functional areas.
- Creating clinical preparedness by introducing high-quality clinical resources into the OR that can replace the clinical and instrument knowledge that the rep currently brings. These resources are available and cost much less than the 50% or more device cost differential. Surgical assistants have also been shown to increase overall OR efficiency.
- Redesigning processes and management instruments in the surgical episode to accommodate the “rep-less” model. “Back table” work, inventory control, OR flow, data management and more are typically not designed for the absence of the rep. Integrating process redesign with clinical support is critical.
- Preparing supply chain practices for a purchasing approach that bypasses the rep, including negotiating “rep-less” prices, getting a better handle on RFPs and creating full transparency around device and materials consumption.
The “rep-less model” has a lot of potential. With the proper support and preparedness, providers will benefit and be able to provide appropriate care to patients.
But what about the manufacturers? Will they not sharply oppose the rep-less model?
The answer is: not necessarily. The cost burden of the rep is not only a challenge for the provider. For the manufacturer, having to direct as much as 40% of device revenue to compensate for sales makes it difficult for them to remain price competitive. This is bound to become an even greater challenge in the future.
Some manufacturers have started looking at the idea of “rep-less”, which is great news for healthcare. However, the “rep-less” model must produce true benefits for hospitals across the board to have the desired impact of general cost reduction and better alignment with what the customer (the hospital) needs.
In the light of this, recently launched “rep-less” models are more of a diversion from, rather than an embrace of “rep-less” promises. The models are designed to be relevant for a small percentage of hospitals, because the rest will still need the “service elements." In other words, a solution for the most financially challenged hospitals that are also likely to be least prepared for the “rep-less” challenges described above.
We must expect the industry to come out with more comprehensive solutions in the months and years to come.
Rick Ferreira is President & CEO of Intralign, a healthcare transformation company