How Long Does Hospital Value Analysis Take?

Plan for months. In my experience, even a breakthrough technology needs at least about 90 days to get through a hospital value analysis committee. A more commoditized product can take 12, 15 or even 18 months. Small companies selling hospital-based products tell me the same thing in plainer words: it takes forever and ever.

Why does it take so long?

Hospital systems have designed the process to be hard. It used to be that the FDA was the big hurdle. Now you can have clearance in hand and still wait a year to get the device on the shelf.

The process has also changed over the last 10 or 15 years. Physicians no longer sit on many of these committees, so your clinical champion is often not even in the room when the vote happens. Even physicians who bring a lot of business into a hospital tell me they no longer decide what goes on the shelf.

And every hospital system runs its own cycle. Some move in 3 months, many take 6 or 9, and plenty take 12 or 15. Where you land depends on what cycle the hospital is in when you apply, and you do not control that.

What makes it faster or slower?

Three things move the clock, in my experience.

• How new the device really is. If it is a true breakthrough, think about 90 days at best. If it looks like something the hospital already buys, expect the long end.
• How crowded the category is. In a category with 14 devices already on the market, it might take you about 12 months to get through.
• Not the price. Even a disposable at around $1,000 can take 6 to 8 months, sometimes a year. A modest price does not buy you a short process.

How should I plan my runway around it?

Build the wait into the plan from the start. You really cannot start selling into a hospital until its value analysis process is complete. So revenue from that hospital starts after approval, not after the first great meeting with a physician.

That is why I start applications early. In a launch, I begin value analysis applications around day 31, while the soft launch is still running. Even if a hospital loves the device, it will take months, so you want several hospitals moving through the process at the same time.

I also run two funnels side by side: a value analysis funnel and a clinical demand funnel. The clinical funnel builds the physicians who want the device. The value analysis funnel tracks where each hospital is in its process. If you only work the clinical side, you can end up with excited doctors and no way for their hospital to buy.

Is there a way around the wait?

Sometimes. If your device fits the work done in ambulatory surgery centers or office-based labs, those sites do not carry the same process, the same inertia or the same hospital friction. You are not waiting through a 3, 6, 9 or 12 month value analysis cycle to find out whether you get on the shelf. For many startups that is a faster first market while hospital applications run in the background.

Government hospitals can be another creative way in. You still deal with process there, just not the same committee.

Where to start

List the first hospitals you want. For each one, find out how its value analysis process works and how long it usually runs. Then put realistic dates in your forecast, with no revenue from a hospital before its approval date. If the numbers do not work, look at outpatient sites first.