Selling to Surgery Centers
Edition: May 2003 - Vol 11 Number 05
Author: Laura Thill
Surgery centers are the new “in-between” industry, according to Jennie Simmons, president, Surgery Center Consultants in Tucker, Ga. In fact, it may pay off to pay them more attention. As more physicians decide to open their own freestanding surgery centers, they will depend on educated sales reps to help them make the smartest, most cost-efficient purchasing choices.
Traditionally, the hospital, physician and long-term-care markets have dominated the healthcare industry. But as the number of outpatient procedures increase and more out-of-hospital procedures are Medicare-reimbursed, physicians have greater incentives to open their own centers, according to Simmons. Other factors contributing to an increase in surgery centers include:
• Growth of plastic surgery procedures.
• Increase in specialty practices, such as GI and urology procedures.
• Increased legislation monitoring surgery centers.
For many physicians, surgery centers are a means for practicing more productive medicine – where they can better manage patient turnover, reduce overhead, take advantage of group purchasing and make autonomous hiring decisions, notes Simmons. However, not all office-based surgery centers are licensed, accredited or monitored by the state.
Essentially, it’s up to the sales reps to educate this market. “Reps must inform physicians about available services, how to become accredited, what Occupational Safety and Health Administration (OSHA) regulations exist [and more],” says Simmons. “If physicians have good medical product reps, they can streamline their equipment needs and [opening a center] can be affordable.”
To some extent, selling to surgery centers involves new challenges for reps, Simmons acknowledges. “Reps must sell some specialty items to different centers,” she says. Beyond that, however, all centers require the standard fare: carts, medical supplies, wheelchairs and so on. “Even the GI specialists who perform non-invasive surgery still need tables, light, scales and monitors,” she says. “Only the volume will differ from one center to the next.”
Finding New Customers
It’s possible to locate potential surgery center customers even before the centers are ready to open. Reps can contact the local department of human resources, which should have a record of certificate of need (CON) applications for new freestanding centers. “Find out who the consultant on the project is,” says Simmons. “Make yourself available at the start. For example, a rep can save a doctor money by working closely with the contractor and consultant.”
Newly established surgery centers can be located through state-accredited surgery center organizations or listings. When calling on a center, it’s important to know who pays the bills, who places orders and what specialty procedures are performed there. “A GI center will spend more money on a monthly basis on pharmaceuticals vs. medical supplies,” notes Simmons.
Meeting Your Customers’ Needs
“Reps must look outside of what’s available from their distributor,” says Simmons. “Think of different products that can help a center become compliant [with OSHA regulations].”
Warranties and in-service packages are other considerations for reps to offer this customer base. In addition, doctors may need access to loaned equipment when their own equipment breaks down. “Find out how much is being spent on equipment repairs,” says Simmons. Small centers lose track of their repair costs. They may be better off leasing equipment in some situations. “Give the doctors an opportunity to save money on repairs and get better equipment, especially vital signs monitoring equipment,” she adds.
Finally, if a surgery center belongs to a GPO, it’s imperative that the center adheres to the GPO contracts when purchasing equipment and drugs, and reps must help them do so. If the customer isn’t compliant with the GPO contract, reps can’t save them money, notes Simmons.
Among the various niches that surgery centers are discovering is endoscopy. “Certain endoscopic procedures in an office surgery setting have received higher Medicare reimbursement rates,” Simmons explains. “Medicare has studied office procedures and recognized the safety of certain ones in office surgery settings. This is a definite opportunity for sales reps.” Office surgery center physicians will have to negotiate for reimbursement with insurance carriers for endoscopy in office surgery settings. Even so, Simmons believes reps will find it lucrative to offer endoscopic products to this market.
While surgery centers do not necessarily have to follow stricter guidelines than hospitals when performing endoscopic procedures, restrictions do vary from one state to another. Some states, such as California and Florida, require centers to comply with certain restrictions on monitoring equipment and drugs, although these requirements are minimal. "Every surgery center - and its distributor reps - must check with its state's regulations," says Simmons.
The bottom line is, surgery centers offer selling opportunities. The new in-between industry may soon expand into a major market. "As more doctors build surgery centers, hospitals are starting to take a hit - especially in rural areas," says Simmons.