The concept of a sales force for hospitals and health systems is once again a core component of a progressive strategy. The first wave of the sales approach, which occurred in the mid to late 1990s, was an extension of the push by healthcare organizations to incorporate more of a marketing orientation and philosophy into their operations. However, due to misunderstanding and misapplication, the sales function had limited success and an abbreviated life span.

This time around healthcare executives recognize the urgency and the relevancy of the concept--as they realize that the long-term survival of their organization could very well depend on the successful implementation of a sales effort. The impetus behind this effort has its roots and rationale in the miscues and misapplied resources of strategic initiatives that have distracted and distanced healthcare executives from one of their most important constituencies: physicians.

Forward to the Past

In a sense, the sales effort is an organized endeavor to return to the halcyon days when physicians and healthcare executives co-existed more as partners and less as competitors. Those days seem distant and somewhat idyllic in these times of physician-driven niche players, specialty hospitals, diagnostic imaging centers and a wide array of ventures that are siphoning off profitable business from hospitals. Hospital leaders often attribute such infighting and subsequent out-migration to the physicians' desire for added income. Certainly that is a component, but extensive research (conducted by the Advisory Board a few years ago) revealed that the catalyst for some of these direct competition initiatives originated due to a lack of communication between physicians and hospital executives. In essence, physicians felt that hospital executives during the 1990s were more focused on doing deals than they were on communicating with them.

The sales initiative is an organization-wide approach to re-open the lines of communication, and re-establish the trust and rapport that existed prior to the merger-mania days. The sales reps, or physician liaisons (as they are sometimes called) are mid-level surrogates for the CEO, tasked to repair bridges and restore the rules of engagement.

The Incredibles

The new wave of sales professionals has been given a rather daunting task with multiple objectives. Their primary mission is to move volume to the hospitals or health systems that employ them. Yet in the process, they also perform four other key functions:

1. Serve as an emissary from the CEO to maintain favorable relations with the physician or physician group.

    

2. Provide information and education (marketing) on new and existing services the hospital has to offer.

    

3. Gather market reconnaissance from the field (especially on the competition) that might be useful in gaining a strategic advantage in the market.

    

4. Offer immediate assistance in making the physician's life easier through improved communication to key department directors or hospital administrators. The goal is to prove their ability to make things happen, basically as ombudsmen for the organization.

The basic problem with that seemingly Herculean assignment is that many times the sales professionals are given the responsibility, but not given the resources or the clout to achieve those objectives. Their ability to perform their function is incompatible with their capacity to realize their stated objectives. This was one of the key things that devalued and eventually doomed the effort the first time. The expectations were too high, the allocations too low. Maybe healthcare executives will learn a lesson from the past, adjusting expectations downward a bit. At the same time, for the sales force to succeed, there needs to be an increase in the capital and cachet allotted the role. Otherwise it will be déjà vu all over again.

Inside and in Sync

To achieve the optimal results from the sales function, healthcare leaders need to realize that there is value just in the process, that such efforts take time, and that the results will be difficult to quantify. This latter point is particularly true at the outset. The savvy hospital executive will recognize that there is inherent benefit in just having representatives from the organization inside the physician's office to establish a communication link between the doctor's practice and the hospital or health system. This invaluable and irreplaceable communication linkage is something that has been diminished over the last decade leading to new levels of miscommunication and mistrust. With a robust sales force initiative, the organization has ambassadors in the field whose sole job is both to receive as well as disperse relevant information to the doctors who either refer to the physicians who admit to the hospitals, or admit directly. While this may seem somewhat secondary in scope and value, hospitals that have established sales teams will swear by the efficacy of the function.

Elicit Information

One role that should be underscored (and never underappreciated) is the role of the sales professional in gathering market reconnaissance on the competition. This can range from the latest buzz on the other hospitals and health systems in the area, to doctor-driven ventures and physician-vested enterprises. As much as any group within the healthcare realm, doctors are usually in the know when it comes to initiatives and information that will affect their business. If the sales professional is effective in establishing a high level of trust, responsive physicians will likely share such information, unless of course it involves the particular physician's own enterprising efforts. Even then, consistent visits and effective follow up may serve to head off physician ventures that would compete with the hospital.

Even if the hospital is unable to thwart a new competitor from starting up, the sales professional can provide insight and market intelligence that can greatly assist the hospital with its pre-emptive competitive strategy. This can take the form of everything from registering descriptive/resonant names and trademarks, to mounting a preliminary marketing and positioning campaign. As we have seen far too often, hospitals and health systems are woefully slow in launching their competitive counterstrike and thus respond more reactively. This is one main reason why niche players have gotten the upper hand when they have come into a new market-lethargic response from the legacy systems. Good market reconnaissance can at least provide healthcare executives with advance warning and early strategic commentary on ventures that threaten to take away business and steal market share. Armed with such pivotal information, the savvy healthcare leader will move swiftly, decisively and effectively.

Above All, Patients

At the end of the day, while abilities, characteristics and key functions are highly valuable, the true value of the sales professional will be determined by the ability to shift volume to the sponsoring institution. A sales rep that is immensely successful in meeting with physicians and developing a rapport is of little value unless that translates into steering incremental business to the hospital.

Eventually it will come down to the correlation between sales efforts and marked improvement in patient volume, hospital margin and financial viability. That is the ultimate metric for any sales professional-in any industry. In that vein, the concept of a sales force has been tested and proven over the decades to work in a variety of settings and a host of other industries. Now that it has resurfaced in this industry, perhaps the second time around we'll get it right.

Fundamentally it boils down to this: Healthcare executives need to recognize that physicians are a pivotal stakeholder group that can either make them or break them, serving as invaluable partners or formidable competitors. A sophisticated sales approach that is supported with substantive data, but centers on productive and progressive relationships, is an incalculably sound investment that can reap sizable reward and lasting returns.

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Preston Gee is the author of Service Line Success: Eight Essential Rules (ACHE/Health Administration Press), and is SVP of Strategic Planning at St. David's HealthCare Partnership in Austin, TX. Gee can be contacted at preston.gee@stdavids.com.