We recently analyzed a report prepared by Ding Xiang Yuan (abbreviated as DXY; Ding Xiang Yuan is one of the largest and most influential online academic portals connecting 5 million Chinese physicians and life sciences professionals) in 2021 called “In vitro diagnostic industry customer service development report” that includes interesting insights from hospital lab clinicians. Advanced diagnostics and precision medicine are key business areas for Veranex and therefore we would like to share our thoughts and analysis with our customers.
The DXY research was conducted from June to August 2021 consisting of 12 qualitative interviews and a 90-respondent quantitative survey. DXY aimed to achieve a representative sample by selecting participants from a diverse range of cities, hospitals, and laboratory types. Figure 1 provides a breakdown of the research participants.
Key Finding 1: Workload
- Class III hospital labs process on average 3,916 specimens per day; Class II hospital labs 1,107.
- The Chemistry/Immunology and other routine clinical laboratory tests e.g., blood and urine tests, comprise approximately 98% of overall hospital lab IVD tests. Histology and advanced molecular testing account for a small portion of the overall tests performed.
A more detailed breakdown of the workload across all respondent laboratories is provided in figure 2.
Key Finding 2: Organizational Priorities and Development Needs
The accuracy of the testing results, testing speed and comprehensiveness of testing menu are the top three daily operation priorities commonly shared by the lab managers and non-managerial lab staff. Not surprisingly, managing operation costs is ranked as the fourth priority by respondents who have the department’s financial responsibility.
When asked about the goals and needs for development, the respondents showed a strong commitment to continue to pursue operational excellence. But there is an equally strong desire to improve the lab’s role in clinical decision making. That’s why there is excitement around the rapid development of advanced diagnostic technologies, such as early diagnosis and precision medicine for cancers, rapid etiology testing and diagnosis of infectious diseases, screening and early detection of inherited genetic disorders and rare diseases.
Another enabler that will help enhance the role of the laboratory in clinical decision-making is the data interpretation capability. However, respondents admit although they have produced a large amount of data over the years, the ability to use these data largely has not yet been put into practice.
Key Finding 3: Brand Share and Suppliers
The research results also showed most adopted IVD equipment and reagents are international brands, including Roche, Beckman, Abbott, Sysmex, Siemens, etc. The only Chinese brand that made the top 5 list is Mindray. As for the pathology department, the increasing prevalence of international brands in the segment is also evident.
The detailed brand shares among Class III hospital labs, Class II hospital labs and Class III pathology labs are provided below in Figures, 3, 4 and 5.
Key Finding 4: Customer Service Needs and Contracts
A challenge the research authors admitted is the definition and scope of post-sales customer services. Nevertheless, the primary needs of lab customers have consistently been identified as the following:
- Training and education, including the clinical applications of the tests
- Technical support for the initial setup and operation of the equipment
- Maintenance and repair, both the scheduled maintenance and troubleshooting
Even in the case that the service agreement is contracted with the distributor, the manufacturer has always been an important part of service delivery and a preferred option by the customer.
The survey showed although the initial after-sales service agreements are more often contracted with distributors, there is a strong customer preference to switch to the manufacturers directly at the time of renewal. Figures 6 & 7 reveal the current types of contractors and the preferred contractors among the choices of manufacturer, distributor, and third-party service provider.
An annual service agreement is more typical and preferred than pay-as-you-go. The survey showed the average contract period is 5 years.
Understanding your customers is critical for any business or organization. Veranex has extracted the above key findings from a third-party study, which although a snapshot conducted in 2021, provides relevant valuable information in understanding the work environment and job priorities of an important customer group, the Chinese hospital laboratory clinicians. It will also be interesting to see whether the dominance of the international brands in the Chinese public hospital sector will be weakened over the years to come as a result of the ongoing cost containment pressure and made-in-China national policies.
Advanced diagnostics and Precision Medicine are key business areas for Veranex. We also have a deep understanding of the evolving healthcare landscape in China. Our in-market experts closely monitor the policy and market trends in the strategic markets like China to help clients stay on top of industry trends and develop strategies and action plans to tap into the opportunities or tackle the issues.