May 11 2015 by Don Lawrence

Will the Rep-Less Medical Device Sales Model Deliver?

There is talk in the medical device industry about a rep-less sales model to help hospitals reduce costs associated with medical devices. In the current environment, it’s not uncommon to find a rep in the operating room during surgery, providing advice and assisting the surgeon and staff with a complex procedure. Surgeons rely on these device reps for their technical expertise and product knowledge.  But that landscape is changing in hospitals around the country in an effort to cut costs.

A recent (@medrepscom) article noted that the implementation of the new rep-less model at Loma Linda University Medical Center (@lomalindahealth) has the hospital paying just 50% of the market price for implants, and representatives of the hospital say the program is going well. Regardless of the fact that reps account for a small fraction of the implant cost, this new trend has both medical device companies and their reps concerned, and rightfully so. That said, in a January 2015 article by Brian Johnson at Mass Device (and summarized by Fierce Medical Device) Stryker CEO Kevin Lobo dismissed the rep-less model. 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. And while the article points out that the sky isn’t falling quite yet, hospitals are piloting the new model to test the cost savings and implications in the OR.

At eRounds we have some observations on the surgeon/device representative relationship.

  • Surgeons need their reps.  Even a seasoned surgeon who has performed hundreds of complex lumbar fusions still has questions from time to time. Having the rep in the OR gives them a level of comfort they aren’t yet willing to dismiss. The best reps have extensive experience and most have a wide network of colleagues with which they may collaborate in order to help the surgeon and staff.
  • Morphing with the industry.  At the very least, reps will increasingly be asked to adapt to other roles or to do more with less… perhaps cover more hospitals and spread themselves a little thinner.  As this occurs, are there other ways for hospitals and surgeons to replace that knowledge and for reps to be more efficient and access knowledge from colleagues? We believe the answer is yes and this is a core reason for our development of eRounds.
  • Training hospital staff and surgeons may not make it cost-effective. While there appear to be cost savings at first glance, this really doesn’t add up.  It is estimated the cost for “covering a case” for a spinal implant procedure (which includes rep’s compensation and benefits) for instance, is around 15%.  A nice savings for sure, but there are additional costs that are incurred in removing the rep from the picture. These include ongoing training to replace the expertise that reps deliver in the OR. These trainings typically have high costs associated with them as they are typically done in person and require travel on behalf of the clinician and, or, the rep.

As the industry continues to explore this potential model, eRounds has seen a distinct uptick in calls from medical device companies and hospitals who understand the value that an image sharing and collaboration platform can deliver. With eRounds, device reps are empowered to share their knowledge, expertise and advice in a secure cloud-based image sharing and collaboration platform. Reps can share detailed images, step-by-step processes, and guides with hospital staff and collaborate on complex surgeries where their devices are being implanted. While these private communities between device companies/reps and hospital staff don’t directly replace the tried and true, on-site model, it is delivering a new and innovative solution that supports the changing landscape.

We are interested to hear your thoughts on this trend and how you see this playing out over the coming months/year. Tweet to us @team_erounds, comment on Facebook or send me an email .