The Contract Squeeze

YouTube: youtube.com/watch?v=XAWm3LTI_Ow

Ask most MedTech suppliers about their biggest challenges in healthcare contracting and they will point to external obstacles: getting through the door, winning over value analysis, navigating GPO bid cycles. But Dan Toomey sees it differently. His biggest hurdle has always been internal.

"My biggest hurdle has always been internally," Dan explains. "It's that communication with my team to understand what I'm trying to do as a national accounts director at the contracting level, at the C-suite level of the hospital."

This episode introduces Dan's framework for accelerating contract implementation through coordinated internal alignment, what he calls "the contract squeeze."

What Is the Contract Squeeze?

The contract squeeze is Dan's term for a top-down, bottom-up approach to winning IDN business. It is not complicated in concept, but it requires disciplined coordination between teams that often operate in silos.

The idea is straightforward: your national accounts team works the business relationships at the top (contracting, supply chain, procurement), while your field sales team builds clinical relationships at the bottom (physicians, nurses, department heads). When both efforts mature, they converge at value analysis, where the decision gets made.

"You have the contracting team talking about the business side of it. You got the sales team selling the clinical side of it. It meets together at value analysis. The outcome is a trusted partnership." - Dan Toomey

This convergence does not happen by accident. It requires internal collaboration between national accounts directors, regional managers, sales reps, and marketing teams. Everyone needs to understand what the others are doing and why.

Sell the Company, Not the Product

One of the most important distinctions Dan makes is between what field reps do and what national accounts directors should do. Field reps sell products. National accounts directors sell the company.

"The national accounts director is the business sales," Dan says. "They should be meeting with supply chain, value analysis, the contracting team, going over what the organization brings. Selling the company first and not the products."

What does selling the company look like? It means answering questions that contract managers and supply chain leaders care about: Can you handle the supply? Where do your products come from? What does your supply chain look like? What resiliencies have you put in place? What guarantees are you willing to offer?

This foundation matters because it establishes credibility before anyone evaluates the clinical merits of your technology. It positions you as a reliable partner, not just another vendor with a pitch.

Understanding the Contract Manager's World

A critical insight Dan shares is that most contracting professionals at hospitals are not clinical. They have not worked in the field. They do not know the nuances of how your device performs in a procedure.

"If you go in trying to sell a clinical solution to a contracting manager who hasn't really been in the field, it's kind of going over their head," Dan explains. "They're going to go call on the others that they rely on, or bring in value analysis."

This means your first job with contract managers is not to overwhelm them with clinical data. It is to understand how they tick: What are their goals? What initiatives are they driving? What directions have they received from hospital leadership? What savings targets do they need to hit?

When you understand their world, you can show how your company fits into what they are trying to accomplish. You become a resource, not a burden.

"Selling the company first and not the products. That's the conversation you're always having. How do I sell my company to build a foundation of who we are?" - Dan Toomey

Make the Contract Manager Your Advocate

Here is the practical reality: it is very rare for manufacturers to get direct access to value analysis committees. The contract manager or supply chain director is typically the one who presents your case.

"Most likely they're the ones who are going to have to present to value analysis," Dan says. "If you can make that contract manager, that supply chain director more versed in your company and what you're bringing, you've set yourself up for success."

This is why educating contract managers matters so much. You are not just informing them. You are equipping them to sell on your behalf. Give them the language, the data points, the value propositions they need to make a compelling case when you are not in the room.

Clinical Buy-In Rises to Meet You

While national accounts is working the business side, field reps are building relationships with clinicians. They are educating physicians, working with nursing staff, demonstrating the technology, and proving its value in real clinical settings.

When clinicians become comfortable with your product, they communicate upward. They tell their leadership they had a good experience. They mention that the rep goes above and beyond. They note that the company has other products that could address needs.

This upward communication eventually reaches value analysis. And when it does, the contract manager you have been educating hears clinical endorsement that matches the business case you have been building.

That is the squeeze in action: pressure from both directions, meeting in the middle.

Transparency as a Competitive Advantage

Dan emphasizes that transparency is essential to building trusted partnerships, and this goes beyond just being honest about pricing.

Post-COVID, hospitals care deeply about supply chain resilience. They want to know where your products are made. They want to understand where bottlenecks could occur. They want your disaster relief plans. They want to know about your third-party suppliers and what happens if there is a backorder.

"Building all that up front is extremely important to building that success of how open you're going to be," Dan says.

But transparency also means going beyond the initial sale. It means helping educate different departments at the hospital. It means creating resources like pamphlets, QR codes, and training materials. It means setting up feedback mechanisms like surveys so you can report back on how implementation is going.

When you do these things to earn the business, you should keep doing them after you get the business. Continued education, SKU reduction for further cost savings, ongoing support: these are what transform a contract win into a long-term partnership.

"Use the contract manager as a resource, opening doors, setting up conversations. Let them be that liaison. They're going to help you get to the right people." - Dan Toomey

The Outcome: Trusted Partnership

When the contract squeeze works, you do not just win a contract. You establish yourself as a strategic industry partner. The contract manager becomes your advocate. The clinical staff knows and trusts your reps. Supply chain sees you as reliable. Value analysis has heard good things from multiple directions.

"That output of the trusted partnership is really what you built that whole time," Dan concludes.

This is not a quick win strategy. It requires coordination, patience, and genuine investment in relationships at every level of the health system. But for companies willing to do the work, the contract squeeze provides a framework for sustainable success in IDN contracting.

You might also find these episodes valuable:

• Episode 1: Patient-Centered Partnerships - The four levels of supplier relationships and what it takes to reach true industry partner status.
• Episode 2: Congratulations, You Won a New Contract. Now What? - The post-award playbook for turning your contract into real engagement.
• Episode 10: The First Meeting: Who Are You Bringing With You? - How to structure that critical first meeting with a health system.