SALES LEADERSHIP

Ripple Effects
Heather Baldwin

There’s an old saying that a stone dropped in a river can send ripples downstream for miles. The effects of new healthcare legislation are like that stone, rippling across the medical profession and beyond.    

One of the many companies dealing with those effects is Wright Medical Group (WMGI), a global designer, manufacturer, and distributor of orthopedic implants and instruments. The company is facing a changing and increasingly cost-conscious customer base that has challenged WMGI to address the way it markets and sells its products.

Years ago, Wright’s sales efforts were directed primarily at the surgeons who used the products. “If, in the surgeon’s judgment, our products brought meaningful improvement to outcomes for the patient, there was a high likelihood the hospital would order the product,” says John Treace, WMGI’s senior vice president of US sales and global marketing. “The surgeon’s decision about what was best for the patient weighed heavily in the decision making for the hospitals, particularly when pricing for the product was in line with other like products.”

That scenario is changing. With procedure reimbursement rates expected to decline in coming years, US hospitals are striving to cut billions of dollars from their operations. As part of this effort, decision making for medical device purchases has shifted from individual surgeons to tech-assessment committees. These committees scrutinize every purchase request to ensure that each provides a meaningful patient benefit or cost reduction over products already on the shelf. At the same time, the increased cost and liability of operating in private practice is prompting more and more orthopedic surgeons to balance patient outcomes with the economics of the facility.

WMGI is taking a two-pronged approach to dealing with this trend. For its products serving the more mature hip- and knee-replacement market, WMGI sales reps are adding an economic justification to their traditional features-and-technology selling approach. To help them make that transition, WMGI has reinforced its sales team with internal support that helps with hospital contracting and development of economic models aimed at helping committees and other hospital administrators in their assessment of Wright technologies.

It’s all about showing a compelling combination of clinical effectiveness for patients and long-term cost savings for the facility. “You have to find a way to demonstrate to both the surgeon and committees that your technology either meets the success rates of current products at a lower cost or offers a far superior success rate if it bears a higher cost,” says Treace. “Demonstrating value may go beyond price to include benefits such as reducing surgery time or reducing the cost of delivery and servicing. Whatever the equation, there must be a clear patient and/or facility cost-improvement formula for these products that truly resonates with the facility’s decision-making team.”


On the emerging foot and ankle side of its business, WMGI is taking a different approach, capitalizing on its first-to-market status in a segment of medicine that, until the mid-2000s, was mostly ignored by medical-device companies. “Our strategy was to develop this emerging market and offer the most comprehensive and differentiated product portfolio through the industry’s first specialized sales force, which calls only on foot and ankle doctors,” Treace says. “As a result, we’ve defined ourselves as the go-to vendor in this growing space.”

These two strategies point to the future of the medical products market. “The specialty companies will thrive while generalists, or those playing in mature markets, will need a true value equation in order to sell in the cost-conscious hospital environment of tomorrow,” Treace concludes.


Company Stats

Wright Medical Group Inc., headquartered in Arlington, TN, is an orthopedic medical device company. It designs, manufactures, and markets devices including large-joint implants for the hip and knee; extremity implants for the shoulder, elbow, hand, wrist, and foot; and biologic products, including bone graft substitutes.

Founded in 1950, the company sells its products in roughly 60 countries through a network of independent, commission-based sales representatives, as well as through a combination of employee sales representatives, independent sales representatives, and stocking distributors. WMGI employs about 1,400 people worldwide and has a US sales force of around 400 people.

John Treace, WMGI’s senior vice president of US sales and global marketing, has held sales and marketing positions for 14 years, including during the last 10 years with Wright Medical. Prior to joining Wright, Treace was with Xomed Surgical Products and in field sales with a Seattle-based medical product line distributor.

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