A medical device firm was expecting positive outcomes from a clinical trial that could support improved CMS reimbursement coverage for their device. Desiring to leverage the improved reimbursement for increased device sales the company Executives were seeking a recommendation on how to align the sales territories in advance of the clinical trial publication.  Territory alignment along conventional geographical areas that the company had been using would likely reinforce existing disparities within the sales team such as high opportunities for representatives in urban areas and sparse opportunities for representatives assigned less populated areas.  The Executives were receptive to a nonconventional territory alignment that could level opportunities across the entire sales team.

Preparation

A broad survey of available information and in-place was conducted for analysis and included the following resources:

  • In-house database of existing customers
  • Third-party database of practicing physicians who would use the device
  • Third-party hospital database with diagnosis reporting data for the disease that the device would treat
  • Placements of competitive products provided by field personnel
  • Sites where new technologies related to the target disease were being evaluated (e.g. pilot sites, clinical trials)
  • MS Office and MapPoint software

Analysis Approach

Practicing physicians were grouped by physical location to organize individual practitioners into “virtual practices” by location

  • Virtual practices were then ranked by number of individual physicians at each location
  • Hospitals were then examined for the target diagnosis:
    • Number of patients discharged
    • Average reimbursement
    • Length of stay (LOS)
  • Hubs of hospitals and physicians were identified where target patients were receiving care
  • The hubs defined the high opportunity selling areas where allocation of selling resources could yield the greatest sales revenues
  • Individual hospitals that were reporting low reimbursement and high LOS were identified as likely receptive to the medical device on a cost-savings basis (see below: green box higher reimbursement with lower LOS; red box lower reimbursement with higher LOS)
Average Reimbursement vs LOS
Average Reimbursement vs LOS (hospital names intentionally pixilated)
Sub-territory detail
Sub-territory detail

Actions Taken

  • The hubs were used to identify one-hundred sub-territories that included about the same number of target diagnosis patient discharges from hospitals
  • The sub-territories were rolled up into new territories equal in number to the number of Sales team members so each sales associate’s quota offered the same sales opportunity