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Orthopedic vendors play a crucial role in the healthcare industry by providing essential products and services to support the treatment of musculoskeletal conditions. As healthcare systems evolve, the strategic development of a go-to-market strategy becomes paramount for orthopedic companies that seek to engage with these customers. In this article, we will explore the key components and considerations in crafting a comprehensive go-to-market strategy that not only addresses the unique needs of health systems, but also enables orthopedic companies to thrive in a competitive marketplace.
Understanding the Health System Landscape
Before we dive into the development of a go-to-market strategy, it’s essential for orthopedic companies to gain a deep understanding of the health system landscape. Health systems are complex organizations that encompass a wide range of facilities and services, including hospitals, outpatient clinics and ambulatory surgical centers. Moreover, health systems often operate under intricate reimbursement models and regulatory frameworks that differ by region.
The key challenges faced by orthopedic service lines across the U.S. in the post-COVID market revolve around workforce shortages, margin pressures, payor coverage shift from an aging population, higher case mix index, technology integrations, quality and outcomes improvements, procedural volume shifts to lower cost settings of care, competition and patient access and equity. Perhaps those most important to the orthopedic market are procedural volume shifts to lower-cost care settings and increased margin pressure. Any of these, depending on the product and service, can form the foundation of segmentation and development of archetypes.
To understand some of the realities that the orthopedic market faces, Sg2, a healthcare intelligence company, annually assesses service line and procedural growth by region. The Impact of Change® forecast is a multi-variable algorithm that considers population, epidemiology and sociocultural changes, economy and consumerism, policy, innovation and technology and care delivery. The 2023 forecast shows orthopedic procedural volume shifting to lower-cost care settings in response to margin pressures. (See Figures 1 and 2.)
Figure 1: 10-Year Orthopedic Forecast
Note: Analysis excludes 0–17 age group. Sources: Impact of Change®, 2023; HCUP National Inpatient Sample (NIS). Healthcare Cost and Utilization Project (HCUP) 2019. Agency for Healthcare Research and Quality, Rockville, MD; Proprietary Sg2 All-Payer Claims Data Set, 2019; The following 2019 CMS Limited Data Sets (LDS): Carrier, Denominator, Home Health Agency, Hospice, Outpatient, Skilled Nursing Facility; Claritas Pop-Facts®, 2023; Sg2 Analysis, 2023. All rights reserved.
Figure 2: Total Joint Replacement Inpatient Growth Slows Down Amid Accelerating Ambulatory Surgery Center Shift
Note: Analysis excludes 0–17 age group. Hip and knee replacement includes primary hip/knee replacement for the Osteoarthritis CARE Family only. %ASC includes commercial claims only. Sources: Impact of Change®, 2023; HCUP National Inpatient Sample (NIS). Healthcare Cost and Utilization Project (HCUP) 2019. Agency for Healthcare Research and Quality, Rockville, MD; Proprietary Sg2 All-Payer Claims Data Set, 2022; The following 2019 CMS Limited Data Sets (LDS): Carrier, Denominator, Home Health Agency, Hospice, Outpatient, Skilled Nursing Facility; Claritas Pop-Facts®, 2023; IQVIA; Sg2 Analysis, 2023. All rights reserved.
Aligning your products and services with market forces is the first step to generating a go-to-market strategy that positions your organization as a partner that is invested in overcoming business critical challenges versus a transactional vendor with products or services to sell.
A Real World Example
One orthopedic manufacturer created a software capability to partner with its implantable products. The manufacturer’s original strategy was to demonstrate to service line leaders the financial returns that could be realized through increased procedural growth if the company could mine electronic health record data and compare it to clinical guidelines to identify patients who required surgical procedures that used the implantable devices. This strategy assumed that all health system service lines prioritized procedural growth over other initiatives.
The manufacturer’s symmetric go-to-market approach was underperforming against expectations. To address the challenge, the company formulated an asymmetric approach by first identifying the prioritized challenges that service lines were seeking to overcome and then assigning them to each health system across the country. The resulting segmentation exercise placed every health system and its composite hospitals into one of three archetypes, each with its own associated challenge.
The accounts with procedural growth messages aligned with where the manufacturer’s software was successfully placed with greater than 85% accuracy. This independent validation of the segmentation provided confidence that the other two segments, which focused on quality improvement and the ability to adopt and integrate innovative technologies into the health information technology infrastructure, would be impactful.
After six months of testing the archetype-specific go-to-market messaging, the manufacturer started to realize expanded placement of their capabilities that aligned with the plan. The success was rooted in the ability to first identify the challenges in the market relevant to the company’s products. Next, it was imperative to associate each health system and hospital across the country through unique data to one of the three segmented archetypes. And lastly, implementation of the value messaging that demonstrated the company’s “problem/solution fit” for their product was essential.
Market Research and Segmentation
The first step in crafting a go-to-market strategy is conducting comprehensive market research. Orthopedic companies must gather data and insights about their target health system customers, including:
• Demographics. Understand the size, location and patient population served by the health system.
• Pain points. Identify the specific challenges and problems faced by health systems in the orthopedic space, such as cost containment, patient outcomes and supply chain efficiency.
• Key decision-makers. Target decision-makers and influencers within the health system, from physicians and surgeons to supply chain managers and administrators.
• Competitive landscape. Analyze the competition to identify gaps in the market and opportunities for differentiation.
Value Proposition Development
With a clear understanding of the health system landscape, orthopedic companies can develop a compelling value proposition, which should clearly communicate how products and services can address the unique challenges faced by health systems. These challenges need to be aligned with a company’s products and capabilities, as they will define the market segments and how to prioritize them. It’s important for orthopedic companies to highlight the benefits they provide, whether it’s cost savings, improved patient outcomes or enhanced supply chain efficiency.
Sales and Marketing Strategy
Developing a sales and marketing strategy tailored to the health system customer segmentation will enable a more focused and effective approach to the market, which will translate into improved on-market success. With the national accounts assigned to the market segments, the next step in developing an effective strategy is to assess the account demographics and layer in potential sales volumes to enable effective account planning. With the segments and accounts defined and the value messaging associated with each segment complete, it’s time to prioritize the accounts to create the most effective path for achieving sales targets.
One universal component of every go-to-market strategy should be to elevate the company’s brand from a transactional seller of goods to one of partnership, in which solutions to challenges are the focal points of engagement. In order to achieve this, orthopedic companies must develop and include the following:
• Targeted messaging. Craft messaging that resonates with health system decision-makers around corporate partnerships rooted in solutions to the unique challenges each account faces.
• Relationship building. Invest in building long-term relationships with key stakeholders within each account beyond the procurement team.
• Educational content. Provide educational content that demonstrates expertise and helps each account make informed decisions.
• Thought leadership. Establish the company as a thought leader in the orthopedic space through publications, webinars and speaking engagements.
Adaptation and Agility
The healthcare industry is dynamic and subject to continual change, whether due to technological advancements, regulatory shifts or unexpected events like pandemics. Orthopedic companies must be adaptable and agile in their approach, ready to pivot their strategies and offerings as needed to meet evolving market conditions. This includes refreshing market segmentation outputs every one to two years to ensure they are using the right value messaging. All marketing strategies need to remain living documents that are regularly adjusted in preparation for foreseeable market changes and to adapt to those that have already occurred.
Orthopedic vendors play a crucial role in the healthcare industry by providing essential products and services to support the treatment of musculoskeletal conditions. As healthcare systems evolve, the strategic development of a go-to-market strategy becomes paramount for orthopedic companies that seek to engage with these customers. In this...
Orthopedic vendors play a crucial role in the healthcare industry by providing essential products and services to support the treatment of musculoskeletal conditions. As healthcare systems evolve, the strategic development of a go-to-market strategy becomes paramount for orthopedic companies that seek to engage with these customers. In this article, we will explore the key components and considerations in crafting a comprehensive go-to-market strategy that not only addresses the unique needs of health systems, but also enables orthopedic companies to thrive in a competitive marketplace.
Understanding the Health System Landscape
Before we dive into the development of a go-to-market strategy, it’s essential for orthopedic companies to gain a deep understanding of the health system landscape. Health systems are complex organizations that encompass a wide range of facilities and services, including hospitals, outpatient clinics and ambulatory surgical centers. Moreover, health systems often operate under intricate reimbursement models and regulatory frameworks that differ by region.
The key challenges faced by orthopedic service lines across the U.S. in the post-COVID market revolve around workforce shortages, margin pressures, payor coverage shift from an aging population, higher case mix index, technology integrations, quality and outcomes improvements, procedural volume shifts to lower cost settings of care, competition and patient access and equity. Perhaps those most important to the orthopedic market are procedural volume shifts to lower-cost care settings and increased margin pressure. Any of these, depending on the product and service, can form the foundation of segmentation and development of archetypes.
To understand some of the realities that the orthopedic market faces, Sg2, a healthcare intelligence company, annually assesses service line and procedural growth by region. The Impact of Change® forecast is a multi-variable algorithm that considers population, epidemiology and sociocultural changes, economy and consumerism, policy, innovation and technology and care delivery. The 2023 forecast shows orthopedic procedural volume shifting to lower-cost care settings in response to margin pressures. (See Figures 1 and 2.)
Figure 1: 10-Year Orthopedic Forecast
Note: Analysis excludes 0–17 age group. Sources: Impact of Change®, 2023; HCUP National Inpatient Sample (NIS). Healthcare Cost and Utilization Project (HCUP) 2019. Agency for Healthcare Research and Quality, Rockville, MD; Proprietary Sg2 All-Payer Claims Data Set, 2019; The following 2019 CMS Limited Data Sets (LDS): Carrier, Denominator, Home Health Agency, Hospice, Outpatient, Skilled Nursing Facility; Claritas Pop-Facts®, 2023; Sg2 Analysis, 2023. All rights reserved.
Figure 2: Total Joint Replacement Inpatient Growth Slows Down Amid Accelerating Ambulatory Surgery Center Shift
Note: Analysis excludes 0–17 age group. Hip and knee replacement includes primary hip/knee replacement for the Osteoarthritis CARE Family only. %ASC includes commercial claims only. Sources: Impact of Change®, 2023; HCUP National Inpatient Sample (NIS). Healthcare Cost and Utilization Project (HCUP) 2019. Agency for Healthcare Research and Quality, Rockville, MD; Proprietary Sg2 All-Payer Claims Data Set, 2022; The following 2019 CMS Limited Data Sets (LDS): Carrier, Denominator, Home Health Agency, Hospice, Outpatient, Skilled Nursing Facility; Claritas Pop-Facts®, 2023; IQVIA; Sg2 Analysis, 2023. All rights reserved.
Aligning your products and services with market forces is the first step to generating a go-to-market strategy that positions your organization as a partner that is invested in overcoming business critical challenges versus a transactional vendor with products or services to sell.
A Real World Example
One orthopedic manufacturer created a software capability to partner with its implantable products. The manufacturer’s original strategy was to demonstrate to service line leaders the financial returns that could be realized through increased procedural growth if the company could mine electronic health record data and compare it to clinical guidelines to identify patients who required surgical procedures that used the implantable devices. This strategy assumed that all health system service lines prioritized procedural growth over other initiatives.
The manufacturer’s symmetric go-to-market approach was underperforming against expectations. To address the challenge, the company formulated an asymmetric approach by first identifying the prioritized challenges that service lines were seeking to overcome and then assigning them to each health system across the country. The resulting segmentation exercise placed every health system and its composite hospitals into one of three archetypes, each with its own associated challenge.
The accounts with procedural growth messages aligned with where the manufacturer’s software was successfully placed with greater than 85% accuracy. This independent validation of the segmentation provided confidence that the other two segments, which focused on quality improvement and the ability to adopt and integrate innovative technologies into the health information technology infrastructure, would be impactful.
After six months of testing the archetype-specific go-to-market messaging, the manufacturer started to realize expanded placement of their capabilities that aligned with the plan. The success was rooted in the ability to first identify the challenges in the market relevant to the company’s products. Next, it was imperative to associate each health system and hospital across the country through unique data to one of the three segmented archetypes. And lastly, implementation of the value messaging that demonstrated the company’s “problem/solution fit” for their product was essential.
Market Research and Segmentation
The first step in crafting a go-to-market strategy is conducting comprehensive market research. Orthopedic companies must gather data and insights about their target health system customers, including:
• Demographics. Understand the size, location and patient population served by the health system.
• Pain points. Identify the specific challenges and problems faced by health systems in the orthopedic space, such as cost containment, patient outcomes and supply chain efficiency.
• Key decision-makers. Target decision-makers and influencers within the health system, from physicians and surgeons to supply chain managers and administrators.
• Competitive landscape. Analyze the competition to identify gaps in the market and opportunities for differentiation.
Value Proposition Development
With a clear understanding of the health system landscape, orthopedic companies can develop a compelling value proposition, which should clearly communicate how products and services can address the unique challenges faced by health systems. These challenges need to be aligned with a company’s products and capabilities, as they will define the market segments and how to prioritize them. It’s important for orthopedic companies to highlight the benefits they provide, whether it’s cost savings, improved patient outcomes or enhanced supply chain efficiency.
Sales and Marketing Strategy
Developing a sales and marketing strategy tailored to the health system customer segmentation will enable a more focused and effective approach to the market, which will translate into improved on-market success. With the national accounts assigned to the market segments, the next step in developing an effective strategy is to assess the account demographics and layer in potential sales volumes to enable effective account planning. With the segments and accounts defined and the value messaging associated with each segment complete, it’s time to prioritize the accounts to create the most effective path for achieving sales targets.
One universal component of every go-to-market strategy should be to elevate the company’s brand from a transactional seller of goods to one of partnership, in which solutions to challenges are the focal points of engagement. In order to achieve this, orthopedic companies must develop and include the following:
• Targeted messaging. Craft messaging that resonates with health system decision-makers around corporate partnerships rooted in solutions to the unique challenges each account faces.
• Relationship building. Invest in building long-term relationships with key stakeholders within each account beyond the procurement team.
• Educational content. Provide educational content that demonstrates expertise and helps each account make informed decisions.
• Thought leadership. Establish the company as a thought leader in the orthopedic space through publications, webinars and speaking engagements.
Adaptation and Agility
The healthcare industry is dynamic and subject to continual change, whether due to technological advancements, regulatory shifts or unexpected events like pandemics. Orthopedic companies must be adaptable and agile in their approach, ready to pivot their strategies and offerings as needed to meet evolving market conditions. This includes refreshing market segmentation outputs every one to two years to ensure they are using the right value messaging. All marketing strategies need to remain living documents that are regularly adjusted in preparation for foreseeable market changes and to adapt to those that have already occurred.
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RH
Ron Herzig is a consulting principal on Sg2’s Life Sciences and Industry team. He brings over two decades of international experience working in strategic leadership roles driving competitive market success across product and service lines. His career spans the discovery, product development and marketed products business segments in biotechnology, pharma and medical device.
