The Bridge

4 ways to segment your IDN customers

by Colleen Keenan and Nicole Winegardner

The Covid-19 epidemic has upended the way we work, particularly for how suppliers and service providers engage their provider customers—but customer segmentation can help you navigate this new reality.

Slide decks: Understand different IDN customer archetypes and segmentation strategies

Background

According to an Accenture survey, 65% of meetings between pharmaceutical sales reps and providers shifted to virtual settings during the pandemic. Without in-person access to busy providers, maintaining customer relationships is more important than ever, but it's also more difficult than ever.  

As a result, suppliers and service providers will need to engage their provider customers in new ways and at different levels of the organization. Customer segmentation is one tool that can help allocate your resources and ensure you are investing your time strategically to foster productive customer relationships. Factors such as revenue, size, geography, or footprint can help segment and prioritize how you spend time with your large Integrated Delivery Network (IDN) customers. 

4 ways to think about segmenting your provider customers

To help, we've analyzed four common segmentation methods below and discuss considerations for each.

1. Revenue

One of the most obvious ways to segment your customers is by how much money they earn each year. You should take both total revenue and operating revenue into account to get a true picture of the largest IDNs. Operating revenue can often be a better measurement for a system's true health care delivery scale, since total revenue can vary wildly during extreme economic conditions (e.g., Covid-19) or during a merger. 

Keep in mind, though, that for-profit systems don't distinguish between operating and non-operating revenue. Additionally, privately held, for-profit systems don't have to report their financial statements, so they often don't show up in common financial databases. If you decide to use a third-party list, you will have to factor these private systems in separately.

2. Number of hospitals

Another way to segment your customers is based purely on how many hospitals they have in their system. Using this method, you'll likely identify the privately held systems left off the revenue lists. Additionally, you'll likely capture chains that lease or affiliate with critical access hospitals that you wouldn't expect to see on lists of the largest "hospital systems." Make sure to use your own analytical filter depending on the customers you want to target rather than relying wholly on a third-party list.

3. National hospital footprint

You can also segment customers by those that have a national footprint. These systems all have regional structures with substantial delegated authority for strategy and operations, but they also have clear corporate hubs where vendors or other partners might want to have influence. This method will highlight the systems that are more likely to pursue integration across their organization. You'll probably see the same names if you segmented by revenue or hospital count. The important distinction here, however, is that regional players are taken off this list.

4. Geography

A final segmentation method you are likely familiar with is by geography. Health care can be largely regional in the United States and those organizations typically have a significant amount of influence in their markets. These are often multistate systems that aren't yet on the national scale but are willing and looking to expand their footprints into new geographies. 

Why you shouldn't rely on only one method

These strategies are a good starting place to think about segmenting your customers—but remember that not every organization you should prioritize will fit into these neat categories. As such, you'll also want to take an organization's progressiveness into account when allocating resources and developing strategic partnerships.

Specifically, keep in mind that most health systems remain systems in name only (SINOs), despite seemingly being united under one organization. These organizations still operate as a collection of independent facilities and physician entities, and they still struggle to provide patients with seamless, coordinated care across sites and episodes. Use the following questions to help identify which organizations are pursuing true integration—and therefore likely more open to strategic provider-supplier relationships:

  1. Do they have an established clinically integrated network (CIN) of employed and independent physicians?

  2. Have they incentivized physicians to choose lower-cost, higher-quality treatment options—especially in specialty areas you care about?

  3. Do they have a single EHR?

  4. Do they maintain a centralized system-wide P&T committee and formulary?

  5. Do they manage a centralized value analysis process, with analytics to track physician compliance?

  6. Do they have a centralized lab?

  7. Do they have a centralized capital purchasing or capital allocation committee?

  8. Do they share any lower-utilization clinical equipment (e.g., lasers, fluoroscopy, surgical robots) across sites of care in the system?

  9. Are their service lines or disease coverage areas organized within facilities (e.g., they may have multiple CV service line leaders and diabetes care teams), or are they organized at the system level?

  10. Do they organize clinical services around cross-continuum (i.e., not just hospital) care?

  11. At what level do they make decisions for partnership?

Once you've analyzed your provider customers based on these different filters and questions, you can then narrow down your partnership approach and prioritize organizations that rise to the top of the list. Overall, segmenting your customers will help inform the organizations you should dedicate more time and resources to; the contacts you should engage with based on the organization's priorities and purchasing structure; and how to organize your own teams and messaging strategy accordingly.

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