When patients think about healthcare, most immediately conjure up images of the services doctors and nurses provide. But delivering those services requires hundreds if not thousands of products.
They range from gargantuan MRI machines to cotton swabs to the patient portal software for scheduling appointments. Regardless of their scale and scope, they’re all products with production schedules, marketing plans, sales teams, logistics specialists, and—in most cases—product managers. For those contemplating moving into the $4.3 trillion healthcare industry, or even those already working there, it’s key to understand what makes product management in healthcare a little different from consumer tech or small business solutions. It begins with what’s at stake.
Who’s the customer for healthcare product managers?
Healthcare in most markets has a highly unusual dynamic. Patients may seem like the customer, but unless you’re selling an over-the-counter product strictly through retail channels, they’re seldom making any of the purchase decisions.
Moving higher up the decision tree are healthcare provider staff that either prescribes medicines, treatments, or medical equipment or actively uses these products while diagnosing and treating patients. However, unless they’re a solo practitioner or a very small practice, purchasing a particular electronic medical record system, x-ray machine, or medicated gauze strip falls to a purchasing administrator.
Patients ultimately don’t pay for many of the services they receive or the products used for their treatment. That’s handled by private health insurance or government-funded programs, which set their own rules for what’s covered and how much they will reimburse providers for those items… and how much out-of-pocket expense falls on the patient themselves.
This four-tiered system requires product managers to understand what patients need for optimal care, what appeals to the healthcare practitioners in terms of optimal patient outcomes as well as ease of use, how it addresses pain points for the entire organization, and how much if at all, insurance companies will pay for it. Likewise, all four personas often need education about product capabilities, features, risks, and advantages. This is why we’re treated to commercials for psoriasis medications during football games.
More focus on opportunities than ideation
Outside of health tech industry startups, healthcare product managers are rarely tasked with developing groundbreaking, disruptive technologies and solutions. Instead, their primary goal is discovering market opportunities and validating their viability for the technical solutions their research and development teams have already come up with.
This is primarily due to the extremely lengthy timelines and massive budgets for medical research, as well as the regulatory hurdles and safety testing demands for this industry. Unlike some new social media apps or e-commerce loyalty tech, healthcare solutions must ensure they do no harm and have quantitative evidence supporting their claims. Moving quickly and breaking things isn’t ideal when discussing human lives.
However, because healthcare companies—especially pharmaceutical firms—have invested millions of dollars into specific formulations and manufacturing facilities, there is immense pressure to monetize and fully exploit the market opportunities for each of their successful discoveries. It’s why you’ll eventually see the same basic drug reformulated and targeted at different medical conditions—such as completely unrelated autoimmune diseases—or for completely unexpected health issues (Pfizer’s Viagra was famously originally developed to treat high blood pressure and heart disease).
Finding secondary uses for products isn’t unique to the healthcare industry, as plenty of firms pivot or expand to seek out new markets for existing tech. But there’s considerably more urgency to maximizing the total addressable market given the astronomical research and development costs combined with the ticking time bomb. Pharmaceutical companies, for example, only have 20 years between filing a patent and generic competitors coming on the scene.
Roles and responsibilities for healthcare product managers
Healthcare PMs still have many “traditional” product management responsibilities. They’re still defining user personas, keeping up with competitors and market dynamics, building product roadmaps, and serving as the connective glue that keeps the product development train running.
But some additional responsibilities are relatively unique to the industry. While other fields have their share of regulations, such as PCI for payments, healthcare products take the cake regarding regulatory oversight, and for good reason. It is a life-or-death business, after all.
Product managers in this domain must stay up-to-date on the implications of each regulatory body and compliance standard their products fall under, which can be a pretty extensive list. This includes submitting products for approval, running clinical trials, and amassing and analyzing huge amounts of patient data to determine the efficacy of the desired outcomes, along with any unintended side effects or otherwise unintended consequences.
And since many of these products also use digital communications and patient data storage, they’re also subject to oversight from those regulatory bodies. A complex medical device could easily need to meet the demanding requirements regarding wireless communications from the FCC, patient confidentiality under HIPAA, health and safety standards from the FDA, privacy concerns under GDPR… the list goes on and on.
All of that factors into creating comprehensive project schedules and product roadmaps, which then inform the far more complex go-to-market tactics for this industry. Siemens doesn’t just list a new ultrasound machine on their website and hope the orders come rolling in, nor does Novartis ship a new cancer drug to hospital pharmacies hoping they’ll prescribe it.
Finding market opportunities
Product managers work hard to quantify the market opportunity and line up orders. That means assessing the global patient market for each product, understanding the current alternative treatments and solutions, differentiating these new offerings, and building awareness and confidence in the product’s efficacy.
And while nailing pricing strategy helps every type of product, it’s critical in healthcare for a few reasons. First, you’re trying to offset years and millions of dollars of research with high-profit margins. Then, you’re trying to make sure the pricing is differentiated and appropriate for each individual market and health insurance company to ensure patients can afford the product and it gets covered fully or partially by their health plans. And, once it’s on the market, it’s a constant cat-and-mouse game of keeping competitors at bay with a compelling value proposition that doesn’t undercut profits.
What makes for a good healthcare product manager?
Healthcare product managers should have an amazing attention to detail and love processes and documentation. This is not a field for PMs who want to fly by the seat of their pants and take lots of shortcuts. There’s too much on the line for patients and the company itself.
They should love learning and be diligent students of the science, trends, regulatory bodies, and insurance markets relevant to their firm’s business. Those will all keep changing with new discoveries, technical advances, and shifting political winds, so you can’t rely on facts from 15 years or even 15 days ago.
Successful healthcare product managers will develop and maintain a deep understanding of the regulatory requirements and approval process for their products. They’ll automatically build those timelines and steps into all of their planning as second nature and won’t try to resist or “get around” any of these demands.
They’ll also need a full understanding of the competitive landscape. Competitors might have similar offerings, but they could also be completely different treatments, such as a company selling a back brace competing against chiropractors and physical therapy treatments some patients or healthcare providers may opt for instead.
Healthcare providers must also maintain a sense of urgency despite the lengthy time-to-market for their solutions. Even a minor delay can cascade into major downstream issues or breakdowns, impacting the total earnings opportunities and first-to-market advantages for their products. This complexity also means “lone wolf” product managers won’t thrive in most healthcare product development environments. To get products to market, product teams must be well organized with very clear divisions of labor and responsibility.
Stakeholder management and cross-functional communication skills also play a large role in a healthcare product manager’s ability to usher their products through this gauntlet. Disparate teams spread across different locations may only get involved during different timeline phases, and antsy senior management and shareholders will continually seek status updates and metrics to track progress during development and adoption once it hits the market. Financial analysis and reporting skills will also come in handy here.
And while it’s not a prerequisite by any means, product managers in this line of work certainly benefit from some experience and expertise with the technology and scientific concepts utilized by their products. This gives them more confidence when dealing with scientists and engineers while reducing any sense of imposter syndrome in such a complex setting.
Product management with a higher calling
Healthcare product management certainly isn’t for everyone and requires patience and a meticulous approach to their work. The lengthy timelines and high rate of failure could test the will of anyone.
But how many other product jobs create as meaningful of an impact as providing patients with life-saving treatments or delivering solutions that truly improve their quality of life? And for an industry with no signs of slowing down, there’s no better time to get in the game if it looks like a match.