What to know:

Health care systems are continuing to consolidate, creating “mega systems” with considerable size and influence. For example, Hospital Corporation of America, based in Tennessee, now owns facilities containing more than 43,000 beds; Kaiser Permanente, based in California, owns facilities containing more than 40,000 beds; and Tenet Health, based in Texas, owns facilities containing nearly 22,000 beds.

Purchasing at these large conglomerates is often very different compared to at independent hospitals. Some affiliated members have considerable freedom when making purchasing decisions, but in many hospital systems, purchasing is controlled through the parent organization in a way that can severely limit choices at affiliated hospitals. Seeking value through volume- or portfolio-based discounts creates a significant savings opportunity across an entire health system; however, because brand choices made by parent organizations lead to substantial device volumes, they can therefore notably boost or deflate the sales of specific medtech companies based on whether or not they make the cut.

Payers can also exert increasing influence in mega hospital systems by influencing patient routing. Specifically, insurers may choose to steer patients to facilities that stock only certain brands of devices and equipment. In this way as well, medtech companies can get locked out of potentially lucrative business or can see a sizeable boost in revenues based on their relationships with large health systems as well as payers.

What to do:

  • Modify your marketing message to match the client. How you market to big hospital systems will be different compared to marketing to smaller systems or independent hospitals. Large hospital systems will be more interested in buying solutions that can provide cost savings throughout the system and this needs to be reflected in your messaging.
  • Target the right facility and stakeholder. Individual hospitals within a conglomerate may not have decision-making powers on purchasing. Be strategic about your account targeting and understand which facilities within a system hold the influence, and to what extent.
  • Be aware of integrated payers. Because insurers can influence the routing of patients to facilities that use particular brands of products, your marketing message shouldn’t stop with buyers. Payers will continue to gain more influence, requiring medtech companies to become more active in payer engagement.
  • Understand that consolidation and integrated payers aren’t static. This field is continually changing with hospital mega systems growing and shrinking, and patient routing patterns shifting over time. Medtech companies will need to invest in periodic research to keep up with this evolving space.


For additional data and insights on marketing strategies, facility and stakeholder targeting, and payer insights, check out our suite of Commercial Targeting solutions.

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