The last decade has seen an unprecedent growth in the Spine market. Mainly due to the aging population and the development of improved technologies with new and better implants and instruments. Most of us, we have seen how spinal companies were growing and increasing their sales and profits. At the same time , we were giving full dedication to surgeons and hospitals for good salaries. Certainly, they were very good sunny times…
Stormy Weather
But as the weather changes to severe conditions as hurricanes or tornadoes the same has happened in the Spinal market in a very short period of time. Now, we are confused and dissapointed. Every day we have to fight with more competitors -agresivier as ever-, with hospital administrations, and insurance companies.If it is not enough, we have also to deal with our own managers and departments.
We want to blame someone. Who is Guilty for changing our agreeable Spinal environment?
The Spinal industry has been working on traditional business models based on R&D and innovation. The surgeons have been the target audience and the key influencers that impact buying decisions. Now, the recent shifts to value-based and cost efficiency models has led to an increase in stakeholders involved in medical device buying decisions.
The Spine Market is entering into the Maturity Stage of the Industry Life Cycle.After the steady increase in sales during the last decade, the market has become saturated of competitors. Additionaly, there is an absence of significant growth, with a lack of innovation in new products (commoditization). To make things worse, the falling prices due to the preassure from hospitals and insurance companies may lead to a decrease in profits.
“The party is over”…and most of the participants do not seem to know it yet
It is clear that we are witnessing a shift in the landscape but what we see in the field everyday is that things are changing but mainly for us (Spinal reps):
Top Management: They are really and mostly concerned about shareholders.They set budgets and cost-saving actions not aligned with the Spine market reality. They want to meet the expectations of the stock market.
Insurance Companies and Hospital administrations: They focus on prices. They want the best ones but they are not willing to give up anything. They demand our best 24 hours service, Spinal Sets consigments, lighter instruments cases, retractors, support and trainings for their staff.
Middle Management: Most of them assume the increasing sales and profit objectives from the top management without any complaint. Then, they transfer them and set impossibles budgets to the Sales organization. Although they understand the market trends, at the end, they are just protect their jobs.
Sales Reps: “Spend Less, Sell More” is what we hear from our managers everyday. Pressure and more pressure. If we can’t increase revenue in a short period of time, probably we will be gone.How to grow with barriers from insurance companies denying surgeries? How to grow at a high rate with such lower prices? How to grow with no significant products launches?
Surgeons: At the end, they are at the core of the spinal business.They are responsable for the patients. They want a good product when they need it. They expect the same service as always, despite price cuts.
Fight or Flight…
Transitions are hard. It is difficult to change.You can Flight to an easiest market (more stable or growing). Or you can choose to Fight by getting adapted to the new environmental conditions. Progress is impossible without change, and those who cannot change their minds cannot change anything (George Bernard Shaw).
Sooner or later any market enters into maturity. That means mergers, fusions and changes in the business models. Healthcare systems are under acute financial pressure. Companies are trying to get adapted to increase efficiencies, reduce costs and lately, find new ways to maintain their competitivenes. We have to face reality: We can not do anything about it.
Only one more thing…
“Don’t wish it were easier. Wish you were better.” ― Jim Rohn