Guest Column | July 26, 2022

How Medtechs Can Work Best With Value Analysis Committees

By Thomas Hickey, founder & host, MedTech Gurus Podcast

Expert NetworkValue analysis professionals are not the lords of the lowest cost. Value analysis professionals are the equivalent of an economic traffic cop at a complex, delicately balanced six-way intersection that includes manufacturer, distributor, negotiator (Group Purchasing Organization or Integrated Delivery Network), hospital system, clinician, and, most importantly, patient. Value analysis pros are paid by the healthcare system or facility to obtain the highest available value (which may or may not be the lowest cost) for healthcare products or services, taking into consideration the specific needs and objectives of all parties.

Let’s explore a value analysis committee’s (VAC) expectations of you, the medtech vendor who’s holding what you believe to be the next great, innovative healthcare product or service. How do you approach the VAC to be successful? What happens if things don’t go initially as you’d hoped?

To begin with, understand the VA process is not an overnight one. VACs meet on a schedule and their time is precious, so, accept the reality that getting from “here” to “there” could take a month… or it could take six months before you get either the thumbs-up or the thumbs-down. In some cases, it might take longer, especially if the VAC believes your offering is alluring but they need more clinical data and validation to reach a final decision.

“There will be some pain points,” says Amy Whitaker, RN, BSN, corporate vice president, clinical transformation, Advantus Health Partners. “You’ve got to be patient, be responsive, be helpful, and, above all, be a good steward of the committee’s time. The good news is a VAC will work with a supplier to identify gaps and make recommendations. Just be sure to never overstate and underdeliver.”

In one case, a medtech vendor had come up with a robotic innovation that, according to the hype, was the greatest thing to ever come down the pike. (Even sliced bread blushed.) Unfortunately, when it came time to assess clinical data and validate how the product actually performed in the healthcare arena, it didn’t live up to the promise. Not even close.

In these situations, you not only swing and miss in an embarrassing fashion, you also negatively impact your own reputation and standing with this particular VAC and its members, who may be on the committee the next time you seek an audience, or they may have moved on to another healthcare system. In either case, they’ll remember you and your empty promises. Don’t go there.

VACs Are Thorough

James Russell, RN-BC, MBA, CVAHP, director of clinical resource management, MD Anderson Cancer Center, points out, “The VAC leans on GPOs to help gather data and to connect and confer with other healthcare systems and providers. They do their homework, and they can help educate clinicians on costs and ways to contain costs without compromising patient outcomes.” It is critically important for you to be open to feedback and to remain flexible.

“In all cases, two-way flexibility is key to the relationship between the VAC and supplier,” Russell says. “VACs value suppliers with an attitude of fairness and they’re always seeking to establish long-term relationships.” It may take an agonizingly long time, but it’s worth it to proceed thoughtfully, patiently, and responsively.

But where do you start? Who do you call? What’s the key to getting a foot in the door and a PowerPoint deck loaded with impressive data onto a screen for the committee’s consideration?

“Most value analysis departments are embedded in the supply chain department,” Russell points out. “The best way for a supplier to find VA professionals is to start with supply chain. When you do connect with someone in supply chain, the vendor should ask if the healthcare system has a value analysis package, and you should do as much of the up-front legwork as possible to help facilitate and expedite the vetting process.”

Understand The “Alphabet Soup” Of Healthcare Distribution

GPOs, IDNs, RPCs … so many initials on top of all those medical certifications and degree designations that follow a healthcare professional’s name. They matter. It’s critically important you understand the differences between healthcare’s three major distribution entities:

  • Group Purchasing Organizations (GPO) – A third-party, outside organization that secures reduced purchasing prices for its members. Essentially, they are bulk-buying.
  • Integrated Delivery Networks (IDN) – Networks of hospitals, care facilities, and healthcare providers that work together to provide the full spectrum of healthcare services – from primary and acute care to nursing homes and home-health services.
  • Regional Purchasing Coalitions (RPC) – A group of healthcare providers that have voluntarily combined purchasing power to access more favorable pricing either through a GPO or by working directly with suppliers.

Yes, it sounds like three ways to accomplish the same thing but it’s important to be tuned into individual subtleties and nuances that characterize each entity. When you are, you are able to confidently present yourself as knowledgeable when it comes to the often-complex matrix of healthcare purchasing and distribution.

Darby Thompson, a partner with Excelerant Consulting, reinforces the point that VACs are to be respected for their knowledge. “VA teams are made up of varying perspectives, so suppliers don’t always know best,” he says. “They want to determine if you’re just new bells & whistles or potentially a game-changer.”

Thompson also advises suppliers to willingly accept VAC feedback, even if they tell you “your baby is ugly.” Then, it’s time to do something with the feedback, painful though it may be. The best suppliers listen, evolve, and collaborate. Stay true to all of your commitments (to the VAC) and, in Thompson’s words, “Always operate as a partner.”

Since the COVID-19 pandemic began, in the interest of time and oftentimes stretched resources, VACs upped their game even more, which means you, as the holder of the next great medtech innovation, better have your ducks in a row before you ask a healthcare provider or a VAC for a slice of their valuable time.

Provider Opinions Matter

“Provider preference definitely matters in the decision-making process,” says Russell. VACs not only want to see proof of improved patient outcomes, but they also want to be respectful of the provider’s ease of workflow.

While all key constituencies -- manufacturer, distributor, negotiator, hospital system, clinician, and patient -- are factored into the decision-making process, VACs give strong consideration to preferences of those who ultimately use the medtech innovation while treating patients. Hopeful suppliers seeking to court favor with providers must also understand VACs trust their providers to offer fact-based, unbiased opinions about the new innovation.

“Wooing providers still occurs – hosted dinners, paid getaways, fees for speaking gigs – but providers know that no new products can ‘come in the back door’,” Russell points out. “They must be fully vetted before being used. Otherwise, liability issues can arise for the provider and the hospital.”

“Suppliers must understand VA professionals are putting their own reputation on the line when making recommendations and decisions,” Thompson says. Obviously, the same can be said of providers who offer their own personal insight, opinion, and preferences to VACs.

Bottom Line

Suppliers must prove their new technology is more efficient, improves patient outcomes, and enhances clinician workflow … at a fair price.

About The Author:

Tom Hickey is founder and host of the MedTech Gurus podcast. He also serves as senior VP, business development, at TTi Health Research & Economics. He develops innovative strategies and tactics and possesses a deep understanding of sales strategy and sales channels. With more than 35 years’ experience in the medical device industry and executive-level experience with manufacturers and group purchasing organizations, Hickey is skilled at assessing launches, start-ups, international distribution, technology, and market feasibility. He has successfully launched several products and hired, coached, and trained hundreds of independent and distributor sales team members. He can be reached at