Healthcare Vendor or Strategic Partner? The choice is not as simple as many make it out to be….

The following is a guest article by Troy Foster, Senior Manager of Communications Infrastructure.

Like many healthcare IT professionals, I am regularly bombarded with emails and phone calls from prospective vendors touting their wares.  Having spent years on both sides of the healthcare vendor and healthcare customer side of the fence, I’m sympathetic to the challenge that sales teams have in sourcing customers and making their numbers.   While I represented a vendor, I remember well one of my favorite catchphrases that I utilized with all of my customers.  As I sat across the table, with a broad smile I would regularly exclaim, “We are proud to be a strategic partner of yours and I will do everything I can to insure you are successful!”

In hindsight, I realize I was being completely genuine.  I truly did think of myself as a strategic partner of the customers I engaged with.   I tried to be as responsive as possible when they called with issues.  I would send regular emails inquiring about how the system is working and I would periodically check in with other team members who had visited to get feedback.  I proudly patted myself on the back convinced I was setting myself apart as a partner who cared and who provided enormous value.

Fast forward a few years and I find myself sitting across the same table staring at a fresh face with a broad smile proclaiming proudly that he represents his vendor who is a strategic partner of mine.  I nod and over the course of the next few months I quickly realize that in the competitive world of healthcare IT, I desperately do need vendors who are strategic partners.  Unfortunately, most vendors don’t truly understand what that means.

After one particularly exasperating exchange in which I had expressed frustration over the fact that I had learned about the vendors future roadmap from an IT blog, I decided to sit down and document what I needed from a vendor and how that differed from my expectations from a strategic partner.  I now sit down with every prospective vendor and give them the choice:  Are you sure you want to be my strategic partner or do you just want to be my vendor?

There are a number of key differentiators that I identified between what I expect from a strategic partner.  I now sit down with most of my vendors and review these requirements.   I also make sure that vendors understand that it’s completely ok for them to be a vendor!  Both of us have to agree there is mutual value before proceeding with a strategic partnership.

Here’s a look at what I see as the vendor’s responsibilities for being a strategic partner:

  1. Account representation – One of the absolute first requirements of a strategic partner that I have is that they provide me with a designated strategic account manager.  This person does NOT carry a number and is NOT the account executive responsible for selling.  It is impossible as a customer to sit down with my sales representative who is the self-appointed “account manager” who I know is desperately trying to make his quarterly number and not question every suggestion he makes as to whether it’s truly a suggestion for my benefit or is he just trying to get a PO. Furthermore, a good sales executive seldom has the time to just visit and discuss.  They need to sell, sell, sell!   A true strategic account manager is the health system advocate for their company.  They understand my issues and challenges and they insure my feature requests are on the list for consideration.  They periodically visit the hospital, get first hand feedback and observations and they take that back to headquarters.  The strategic account manager is also responsible for scheduling regular product roadmap and healthcare system checkups with the health system.
  2. Collaboration and Innovation – In order for a health system to truly feel like they are “partnering” with a vendor, they need to feel like they have some input and insight into the future enhancements of the product. This does not mean the vendor has to open the doors and give full transparency into the R & D roadmap, but I do expect to have the opportunity to provide feedback, participate in early testing and engage in joint testing and evaluating.   I also expect my vendors to partner with other vendors and engage in collaboration and integration efforts to allow us to streamline and enhance the capabilities of our technology offerings.
  3. Financial commitment – As a vendor or partner, the price I pay is always a negotiation. However, the price I pay for the product is not the only factor that prospective strategic partners need to understand.   Providing health systems with prototypes or beta releases, resources to assist and an onsite presence to install, evaluate and test has financial cost.  A company executive of mine summed it up perfectly while talking to the executive of another vendor we worked with when he said, “Before you do business with <insert customer name>, you have to ask yourself if you can afford to do business with them”.   Especially with some of the more high profile health systems, the money spent to manage and maintain a strategic partnership is not trivial.

That’s not to say that the Health System doesn’t have any responsibility in a strategic partnership.
They do. Here’s my take on Health System responsibilities for being a strategic partner:

  1. Patience and commitment – I list this requirement first as I see this as the most common failing of many healthcare IT leaders.  Too many healthcare leaders treat vendor “partnerships” as one-sided affairs.  They pull out their customer “cudgel” the minute things go wrong.  Partnerships cannot be one-sided.  Particularly in cases where I’m working closely with a vendor partner on new product development or design, the vendor partner needs to be given the opportunity to identify and address defects.  We also need to insure that vendor partners knows the health system is committed to using the product as long as patient and staff safety needs aren’t being jeopardized, health system needs are being addressed  and prompt resolution of issues is prioritized.
  2. Referenceability – The greatest benefit of a strategic partnership to a vendor is the ability of them to offer prospective customers the opportunity to at minimum participate in reference calls and in some cases site visits.  These activities lead to the increased sales which funds the strategic partnership.
  3. Facility and personnel resources – In order to truly innovate and collaborate, health systems need to invest in space and personnel and allow vendor partners to install equipment and software to test, integrate and collaborate effectively and efficiently with other vendors. The ability to bring vendors into a simulated care environment complete with a bed, nursecall, telemetry, EMR sandbox feeds etc. allows both the vendor partners and health system the opportunity to much more effectively mimic, test and innovate.

Rising healthcare costs, physician and staff shortages and an expanding offering of new and advanced technology makes the need for strategic partnerships between vendors and health systems more critical than ever.   The need to consolidate and integrate technologies in order to simplify workflows and enhance patient care will allow for more efficient and effective patient care.  At the same time, the cost of doing business is rising and more and more vendors are struggling to compete.   The ability of healthcare systems and vendors to identify opportunities to partner and advance their respective needs will be a key determinant in identifying the future success and profitability of healthcare and vendor organizations.

About Troy Foster

Troy has been working in healthcare for almost 25 years. He has worked as a consultant, vendor and internally within hospital IT. Troy has spent the past 5 years as the senior manager of communications infrastructure at Stanford Hospital. Troy’s background includes extensive experience in nursecall, secure messaging and alert/alarm middleware as well as several other communication and clinical IT systems and he has presented at numerous conferences across the country. Currently, Troy is heavily involved in the activation of a new 850,000 sq foot hospital.