On any given day, in operating rooms across the country, surgeons look to medical device sales reps to guide them through complex procedures. Although a patient undergoing a total knee or hip replacement may not realize it, a medical device rep from the implant’s manufacturer is usually in the operating room providing guidance and offering advice to the surgeon – playing a critical role in the procedure.
But what if they didn’t? What if the sales rep wasn’t in the OR at all?
This is the question being asked by some hospital executives as they look for ways to reduce spending on medical devices and supplies – which make up the hospital’s second-largest expense, after labor. As a result, a small number of hospitals are collaborating with medical device manufacturers to train hospital staff on specific products so they can forgo the manufacturer’s “rep services,” and thus pay significantly lower prices for the devices themselves.
The Rep-Less Sales Model
In an August 2014 article for Modern Healthcare, journalist Jaimy Lee outlines the implementation of the new rep-less model at Loma Linda University Medical Center. The hospital pays just 50% of the market price for implants, and representatives of the hospital say the program is going well.
Several medical device manufacturers – both big and small – are piloting programs to test the rep-less sales model. Wright Medical was one of the first to try the rep-less model with its subsidiary, WrightDirect, which sells hip and knee implants at a flat rate that is 50-70% less than the market rate. Last year, Smith & Nephew rolled out a program called Syncera that cuts the price of implants in half by excluding technical and logistical support usually provided by sales reps. Smith & Nephew CEO, Olivier Bohuon, says the program could save hospitals performing 700 procedures a year an average of $4 million over 3 years.
Should You Be Concerned About Companies Going Rep-Less?
While no one disputes the need to cut healthcare spending, the rep-less sales model has some in the industry concerned. But exactly how concerned should they be? Opinions vary, of course. When Wright rolled out its Wright Direct program in 2013, a Bank of America analyst cited it as the “Death of the Medical Device Salesman.” Likewise, healthcare author and advisor, Chris Provines, believes the model is here to stay (see his 7 Reasons Why the “Rep-Less” Medical Device Sales Model Will Likely Stick). At MedReps.com however, we don’t think the sky is falling just yet. Here are 5 solid reasons we think the rep-less sales model isn’t something to worry about.
- Reps provide a clinical benefit in the OR. The role of a medical device sales rep has long included consulting in the OR. Reps may also set up product trays with hundreds of instruments and deliver the implant to the OR ahead of the procedure. A rep’s attention to detail and extensive knowledge of their product unquestionably contributes to patient safety.
- Surgeons aren’t on board with it. In a March 2015 article for MassDevice, Brad Perriello quotes two orthopedic surgeons who are skeptical of device makers “going repless.” If doctors aren’t comfortable performing surgeries without a rep on hand to advise, it’s sure to negatively affect patient outcomes.
- Cost savings are questionable. The cost of training hospital staff to assist the surgeon is not insignificant, and depending on the volume of procedures, multiple members must be trained. Considering the turnover rate of hospital staff, training may be ongoing, making the cost savings less significant. Additionally, procedures performed without a rep are likely to take more time in the OR, reducing the cost savings further. And of course, if going rep-less compromises patient safety and ultimately leads to an increase in negative outcomes, the cost savings will quickly disappear altogether.
- Patients want choices. In the midst of a movement towards more personalized medicine, the rep-less model requires hospitals to offer fewer choices for patients. Hospitals testing the rep-less model are typically contracting with a single company to buy implants – so patients (or their doctors) no longer have their choice of implants. They will receive the implant made by the contracted manufacturer. This move toward standardization goes against the current patient demand for increasing options to meet their specific needs.
- Industry leaders aren’t buying it. Stryker CEO Kevin Lobo dismissed the rep-less model in a January 2015 article by Brian Johnson at Mass Device (and summarized by Fierce Medical Device). Lobo believes reps play a critical advisory role in the OR and promotes an increasingly specialized sales force to improve the level of knowledge reps bring to procedures. When asked about the rep-less model and Smith & Nephew’s Syncera, he told MassDevice, “Until these procedures are de-skilled, it’s very hard to imagine not [having sales reps in the operating room],” adding, “I’m not seeing it impact[ing] us in any meaningful way.”
While hospitals and manufacturers are likely to continue to test the rep-less model, for these 5 reasons and more, we’re confident it won’t bring the extinction of medical device sales jobs. What reasons would you add to this list? Visit us on LinkedIn and Facebook to join the conversation.