Thursday, August 4, 2016

Keeping Your Options Open: Part I

Every healthcare facility has a handful of medical devices that at some point need to get replaced. Some of those devices are “used and abused” and deserve a proper burial, but some still have a pulse.

The question is, will the ones with the pulse be handled just like their battered counter-parts? 
Will the Hospital Departments trade them for shiny-new next generation models without consulting Corporate Office? 
 
Will they be forever retired into an offsite barn used as a storage or, live in the hallway until Joint Commission arrives and then get quickly relocated into a nearby closet or worse, a bathroom (true story!)?

There are five alternatives to consider in addition to the antiquated trade-in or the "out-of-sight, out-of-mind" methods when replacing end-of-use medical devices. 

Each has its pros and cons but all are better alternatives than locking equipment in barns or using as foot stools under the nurse’s station.

The five most common alternatives are:
  1. Internet Sales
  2. Auctions
  3. Hospital Site Sales
  4. Direct Vendor Sales
  5. International Container Load Sales
A 250 bed hospital has an average of 3,250 devices and since majority of devices are different, different selling strategies should be utilized. For the sake of keeping interest and time, let’s explore “Internet Sales” option in this post and reserve the rest for next time. 
 
Internet Sales Pros:
  • Setting Asking Price: let’s face it, we all have access to the internet and if we can
    self-diagnose the root cause of that annoying cough, we can probably determine ballpark price of the equipment.
Quick Tip: Prices published on websites such as eBay and DOTmed should be discounted by at least 33%.  Prices listed on these platforms are almost always negotiable which is why it is imperative for facilities to maintain own database with prices received for sold devices. Also, please don’t assume that asset book value Finance Department has on record is the same as street value. It’s not!
  • Unlimited Selling Cycle: you’re not bound by time limit and can continue selling until you receive a price that meets your expectations.
  • Reaching Global Buyers: you expand your reach beyond vendors personally known to you or working for your facility to a wide range of prospective buyers located in US and abroad.
  • 24 Hour Visibility: whereas online auctions and site sales provide limited visibility hours, the internet is always open.
  • Reduced Commission/Service Fees: establishing an online store can cost as little as $0 or as much as $200/month, depending on the platform used, but that pales in comparison to 20-60% fees charged by providers offering online auctions and equipment consignment/storage services. 
Internet Sales Cons:
  • Time Consuming: it can get time consuming (and irritating for anyone holding a full time job) to respond to prospective buyer’s inquiries, reply to emails, return phone calls, host inspections or verify if the screw holding the plastic case on the bottom of the unit is grey or silver.
  • It takes approximately 2-4 hours to sell common general biomedical device.
  • It takes approximately 40-60 hours to sell a fixed imaging system.
  • It can take months to sell a unique, specialty-focused system or laser.
Of course, sale process can be decreased if you give away the system for the cost of de-install, but if you’ve read this far, I don’t think that is your goal.
  • Choosing Selling Platform – there are plenty of online platform to choose from and it appears as if a new one pops up every day. From medWOW, DOTmed and eBay to SoluMed and MediBid just to name a few. Each platform has its own advertising criteria, fee structure and customer traffic that must be evaluated.
  • Payment Processing: when selling online, buyers need to have payment options and at very minimum, facilities need to be able to process payments by credit card, PayPal, domestic and international wires.
  • Logistics: managing logistics is a pain! And it will be even more painful if buyer is located abroad. It’s not a rocket science to figure out how to ship a 30lb box to Poland, however the process will take on a life of its own when the job calls for de-installation, crating and shipping via ocean-carrier to Australia or determining which consolidated clearing house to use for a shipment to Mexico.
There is definitely some effort involved when selling end-of-use medical devices on the internet, but the financial benefits almost always outweigh the labor involved. 
 
Don’t be afraid to incorporate Internet Sales into your equipment decommission program. Even if you determine it is more beneficial for your facility to trade-in that end-of-use asset, the vendor taking it on a trade just may be more generous with trade-in value if they know you have other options.
 
If you would like to learn more about the benefits of an in-hospital, centrally managed Medical Equipment Decommission Program, please visit www.ecomedhtm.com or send an email to med@ecomedhtm.com.

Friday, June 3, 2016

Transforming Wicked Ways of Selling Used Medical Devices

After 7 years of working in a medical field, I can say with certainty that healthcare professionals are more optimistic about Obamacare than selling medical equipment they no longer need. 

Almost everyone who works in a hospital has a colorful story about their experience with sale of used medical devices and vendors who purchased them.  

And, it makes no difference if they sell equipment at an auction, from the hospital's basement or online. 
At the end of the day, most feel cheated and mislead by the buyer. 

Regardless of their title and location, the sentiment shared by folks who work in healthcare and have to deal with trading-in or selling equipment is the same:

“Three words: used car dealership.” – Respiratory Nurse, MI

“I was selling a new patient monitor and told by one buyer it's worthless because key options are not enabled.” – Cardiologist, MO

“We auctioned a truck full of equipment and received a check for $250. How’s that possible?” – Hospital Purchasing Manager, IL


Are these folks the ones to blame because they assumed prices published on the internet are actual prices vendors pay?


Did the vendors who purchased the equipment take advantage of them?

Or, is the medical device industry guilty as a whole because it deliberately keeps prices hidden from the public?   

Answers to these questions are irrelevant because each party will have their own truth. However, what is relevant is that none of the folks selling equipment followed a process.  

They either contacted a vendor they already knew, or searched for one on the internet. That’s not a process, that’s equivalent to calling Goodwill and asking them to buy a juice maker that was received as a housewarming gift and never used because “it's just a pain to wash after each use”. 

Without a process, resentment, frustration and mistrust will continue to plague the minds of healthcare professionals whose jobs require them to manage aging medical devices. 


And that’s too bad, because selling can help one’s bottom line (if done properly) and help medical communities that do not have first-hand access to diagnostic and life-saving equipment.  

So, if your facility is ready to transform how used medical equipment is sold, here are some helpful tips:

  1. Centralize and standardize the process.  Having one central location to process all devices that are being sold is more efficient then having 7 nurses trying to sell 3 IV Poles.  
  2. Manage the process.  Accountability and understanding the process directly correlate to revenue that will be generated.  If your facility is content with $250 check for a truck full of equipment, assign the process to an existing, already swamped employee.  If your facility is ready to command $8000 for just one ultrasound, outsource the process.  
  3. Don’t use the same vendor to buy all your equipment.  This is the same as investing all your money into one stock.  Vendor diversification is just as important as financial diversification.  Vendor who specializes in refurbishing patient monitors will pay more for the monitors but they will pay below market price for the surgical table.  Contrary to popular belief, international vendors are not looking for donations of crappy, old equipment and will pay premium to acquire working devices.      
  4. Don’t use the same method to sell all your equipment.  Some devices such as ventilators should not be traded-in to the manufacturer, fixed diagnostic systems are simply not suited for auctions and hospital furniture does not sell well at onsite sales. 
  5. Time the sale.  Did you know that same vendor will pay 15-22% more for equipment if they have a buyer and even more if their buyer gave them a PO?  Timing the sale leads to more revenue.  Isn't it fantastic?  There’re always problems related to budget deficits, unbudgeted expenses and missed annual targets. Without too much effort that financial gap can be reduced just by learning if equipment is being purchased for stock or for an end-user.
If the thought of selling used medical equipment is daunting and hearing the same old story of how equipment is not desirable because "it’s not painted orange with green polka dots" is annoying, take action.  

Without a process, valuable devices will be undersold, inefficiency and miscommunication will flourish and staff will continue to waste time and mistrust buyers.  Start the process, own it and rally the troops to support it!

If you would like to learn more about the benefits of an in-hospital, centrally managed Medical Equipment Decommission Program, please visit www.ecomedhtm.com or send an email to med@ecomedhtm.com.

Tuesday, February 16, 2016

Simple Goals Lead to Great Opportunities

Four years ago, EcoMed was found to educate and help healthcare providers to manage decommission of medical devices that were being upgraded and removed from use.
 
Our goals were simple: 

Share Knowledge
Provide Value
Bring Transparency
Deliver Results

Our mission was to help a healthcare community to implement a value-based process that will provide cost savings and consistent revenue through strategic disposition of medical devices on a global scale. 
 
While most companies focused on buying and selling medical devices, why did we pursue such an unconventional undertaking?
 
Here are just some of the reasons:
  1. Because dealing with decommission of medical devices is frustrating, time-consuming and not in a budget for most Healthcare Supply Chain and service providers.
  2. Because healthcare facilities have other priorities.  Providing patient care, improving patient experience and maintaining fiscal responsibility, are just to name a few.
  3. Because there are thousands of medical equipment remarketers, resellers, dealers, auctioneers, refurbishers and underserved medical facilities and healthcare providers do not have the resources to get to know them and take advantage of their expertise.
  4. Because according to CMS, the average American spent $9,523 on healthcare in 2014 and this amount is projected to surpass $10,000 this year! 
While managing decommission of end-of-use medical devices will not entirely obliterate this $10k price tag, personally, it makes me feel good to know that we as a company are doing something to help lessen this burden.

And, it brings me great honor to say that our efforts were recognized not only by some of the greatest healthcare facilities in the Midwest, but also by Premier, Inc. GPO.
 
One week ago, we were notified that EcoMed has been awarded a nationwide contract with Premier, Inc. for Medical Equipment Decommission Services.
 
It's a privilege to start sharing our knowledge with Premier members.  We look forward to showing that a managed process of decommissioning medical devices can result in measurable revenue and lead to
  • Cost savings
  • Process improvement
  • Greater staff efficiencies
And above all, a direct opportunity for underserved medical communities to purchase medical equipment at affordable prices. 

We are thrilled to help healthcare providers around the country regain control over HOW their medical devices are decommissioned. And, we are proud to have been selected by Premier, Inc. to show HOW it can be done!
 
On a personal note, I'm grateful that EcoMed has been given a higher platform to make a difference in our healthcare community.  With great pride and humility, I look forward to continuing our mission and transforming the medical device decommission process one day at a time.


If you would like to learn more about the benefits of a centrally managed, in-house Medical Equipment Decommission Program, please visit us at www.ecomedhtm.com or send an email to med@ecomedhtm.com. 

Monday, January 11, 2016

Personal Attachment: 10 Minutes of Unlicensed Therapy

Who’s got attachment issues? It’s remarkable to what extremes people go to hang on to their dated belongings. The “I cannot let this go” phenomenon clutters our homes, our minds and certainly generates a few dollars for Hollywood when shows like Hoarders has viewers glued to the screens with mouths wide open.
It’s almost endearing to have a collection of sorts. And trust me, I know as my “good luck charms” paraphernalia is starting to overpopulate the shelf it calls home. 
 
However, for those of you working in a medical setting and exhibiting profound attachment to underused medical devices and supplies, this type of behavior can be filed under an "expensive and unrewarding" hobby.    
 
You see, unlike personal collections that may increase in value or be resold directly to other collectors, auctioned off (watch out for those fees!) or brought to consignment stores, medical devices simply depreciate in value and eventually become almost worthless.
 
This was a tough lesson recently learned by two Chicago area physicians who decided to retire and sell all the assets from their private practice. They were proud of their established, 20 year old clinic that was heavily stocked with barely used medical equipment, supplies and furniture.  They had no doubts that buyers will be lined up outside their door ready to pay premium for well-maintained products.  
 
Among items that ranged in age from few months to 20 years, were two “once-upon-a-time” very valuable and expensive diagnostic devices. Both devices were purchased at a sticker price, directly from OEM nine years ago.  
 
Sadly, for various reasons, both devices were completely under-utilized and sat around practically untouched throughout most of their longevity. Truth is, physicians should have sold them years ago when reimbursement rates for procedures performed on these devices were more rewarding and equipment was still young.  
 
But, they didn’t sell them, or any of their other acquisitions.  On the contrary, even though physicians seldom used the equipment, they rented storage space and paid a local service company to have it preventatively checked and regularly cleaned. They kept all of the original boxes, purchasing agreements, technical spec brochures and sales rep’s business cards.
 
They were hoping their amassed collection and due diligence will pay off and they will be able to sell all equipment by discounting it 25% from original purchase price. What, really?
 
As good and lucrative as this plan sounds, here’s why it’s not realistic:
  1. Technology evolved and these devices are missing standard options desired by today’s market
  2. Software is now outdated and considering the age of equipment is not worth the upgrade
  3. Some of the devices are no longer supported by their manufacturers
  4. Some of the supplies used with these devices are no longer being manufactured
  5. End-users such as medical facilities will not purchase equipment without at least a 90 day warranty and do not want to pay any associated de-installation fees
  6. Dealers/Refurbishing Companies are looking for bargains and despite working condition & good cosmetics, they still have costs associated with refurbishing process and warranty
The two physicians learned an expensive and eye-opening lesson. Not only did the recent volatility of the stock market negatively impacted their IRAs, their overall retirement portfolio dropped by more than $24,000 due to poor planning, inherent industry misconception and weak market demand for complex and dated medical equipment.
 
So how can you help your facility from getting caught in same situation? Simple, if you know of any device not being utilized, advocate to sell it! The longer it sits around and collects dust, the less rewarding will be its’ decommission.  
 
Unless devices used in your facility are entirely made of gold, they will not increase in value with age. And if they are made of gold, please snap a selfie standing next to one of them and send it to me. I will frame and add it to my collection of “good luck charms”!
 
 
If you would like to learn more about the benefits of centrally managed, in-house Medical Equipment Decommission Program, please visit www.ecomedhtm.com.