Used Medical Equipment Fair Market Value is Unfair

Let’s talk about used medical equipment fair market value, or FMV.  At some point, almost every healthcare provider needs to establish FMV of their used medical devices. 

 

If you engage an appraiser to establish FMV, most likely you will receive a value that is unrelated to price at which your device will sell.

While this value is suitable for the accounting purposes, it is unfortunately useless in the real world.

 

If you try to establish FMV on your own using Google or any other search engine, you will discover that value of the same device can vary by as much as 60%. 

 

So, if FMV provided by an appraiser cannot be used as a benchmark and online FMV results are inconsistent, how can you establish appropriate resale value of your medical device? 

 

In reality, FMV depends on basic economic principles of supply and demand.

For example, during shortage of respiratory devices during a flu season, price of respiratory devices available on secondary market skyrockets regardless of FMV reported by an appraiser or found online.

In addition, FMV has a different meaning to each buyer, their situation, and location. 

 

A buyer who makes an offer on any device for their inventory will assess its FMV lower than if they were purchasing that device for a prospective end-user (party that will use the device). 

 

And, if that end-user was to issue a Purchase Order, that same buyer may significantly increase their offer. 

 

True Story (and actual photos of the system):

This situation took place in our office while we were selling a GE Lunar Prodigy Bone Densitometer for a client.

A buyer submitted an offer that was below resale value range assessed for this system.

Buyer justified their offer by indicated that system lacked a key technological feature, was expensive to de-install, crate, and transport across the country to their facility. 

 

We presented the offer to our client.  As anticipated and per our recommendations, client rejected the offer. 

 

Three weeks later, the same buyer inquired if the system was still available.

After learning that it was, they increased their offer by $8000.

It turned out, they were now working with an end-user who was in Latin America and despite the absence of a key technological feature still wanted this system. 

 

So, with FMV being arbitrary and purchase price carrying little weight on the secondary market, how can you establish at what price to sell your medical device?

 

Here are 9 suggestions to help:  

1. Resale value will depend on supply and demand of “like” or similar devices. Study the market and determine if there’s a surplus or deficit of equipment you’re selling.
2. Look for buyers who need (not want!) your device. 
3. Avoid buyers who purchase for inventory or will resell device to another buyer instead of an end-user.
4. Refrain from selling to a service company that fixed your device… for obvious reasons.
5. If soliciting bids, engage as many buyers in the US and abroad as possible. Don’t limit yourself to 2-3 companies.
6. Establish a resale price range. This will help you analyze offers. Email us if you need help. This service is FREE and without any obligations.
7. If you decide to auction, be mindful of fees. They
   
   drastically reduce profit. For example, eBay collects 10% from the sale of “Healthcare, Lab & Life Sciences” equipment. You will also incur 3% fee from PayPal for payment processing. Your profit is down 13% and you still must deal with packing & shipping, thus cost of your time. If you engage auctioneers, again, be mindful of fees. In addition to 40%-60% profit split, auctioneers may charge for pickup, cleaning, PHI eradication and so on. Also, buyers who purchase from auctions pay up to 20% premium. This reduces the total amount they’re willing to bid.
8. Avoid selling to buyers who advertise they "buy everything and pay top dollar". Historically, these buyers make the lowest offers. Because they buy everything, they need a big facility for storage and that comes with big overhead. These buyers usually resell equipment to other buyers. See suggestion number #3.
9. Build an international network. Approximately 80% of equipment is sold overseas. Privatization of healthcare in Africa, India, and Pakistan lead to a surge of new hospitals and clinics opening in those regions. International buyers are the biggest players in used medical device industry right now.  

While used medical equipment FMV is an unfair and arbitrary number, these 9 proven suggestions will help you resell your medical devices on the secondary market at reasonable prices.

 

 

EcoMed works exclusively with hospitals, surgery centers, imaging centers and independent healthcare providers by managing resale and transportation of medical devices removed from clinical use. If you have medical devices that are no longer being used, contact us and we will provide you with resources that will help you make the right decision on how to sell them.

 

 

To learn more about benefits of being an EcoMed client, visit us at www.ecomedhtm.com, send us an email or call Toll-Free 855.234.5600. 

Internal Habits Are Hard To Break

Adviser: A person who gives advice in a particular field
~Oxford Dictionary~

Most companies in used medical device space operate as brokers, dealers or remarketers. 

They buy, sell, broker or market used medical devices.

It's a sensible business model that’s practiced in many industries.

This model, however, does not solve an internal problem many hospitals have related to used medical devices.  

As devices age and get replaced, hospitals often
 

• Practice "out of sight, out of mind" approach where devices are stored until they become obsolete and require liquidation.
•  Trade-in below market value. A popular method where supplier of the new device offers “nominal value” for the old device. Works just like trading-in an old car for a new one. Hospitals give up revenue in exchange for convenience.
•  Sell to vendors who email them proposals that read "Sell us your equipment. We buy all equipment. We beat any offer. We pay top dollar!" Every proposal reads the same.   

And, every Department within the same hospital, has their own preferred way of handling devices they no longer need. 

 

Rather than taking advantage of this disorder, I've always advocated for hospitals to address this problem internally.

 

Until each facility and Department follows the same protocol, hospitals will lose revenue and never capture the true cost of equipment life-cycle.

 

It has become my mission and passion to help hospitals fix their internal process. And, to educate them about used medical device industry so they can make informed decisions. 

 

Reselling used medical devices became a byproduct of advice and recommendations that resulted in consistent revenue for our clients. 

  

In my last post, I offered to share 5 reasons that make EcoMed an adviser rather than a traditional broker, dealer or remarketer. 

 

With our mission to improve the internal process being Ground Zero, here are 5 reasons that set us apart:
 

Reason #1. Sales, Sales, Sales

 

Our expertise is managing resale of used devices. We refrain from offering hospitals products to purchase.

 

Why?

 

Because we prefer to represent best interests of facilities and ensure transparency.
 

Reason #2. Please don’t ask to buy your equipment

 

Buying devices from hospitals will put us in the same category as other brokers/dealers and violate our principle of transparency.

 

It also means that unless there's a buyer for your device right now, you will receive a low offer because of high acquisition costs (transportation, storage, refurbishing, uncertainty if/when the devices will resell and insurance just to name a few).

 

Reason #3. Remarketing is insufficient

 

Unlike remarketers whose objective is to market device until there’s an offer, we follow a thorough discovery process where we collect data from Department, service engineers, OEM and FDA if applicable.

 

To resell unique devices, we partner with leasing companies, medical associations and technology startups all over the globe because traditional resale methods are not sufficient.

 

Our marketing plan and selling strategy are determined by device type and not online platform with lowest fees.

 

Reason #4: Complimentary Services

Routine inventory of devices removed from clinical use costs our clients… $0.

 

Clients who need appraisals pay... $0.

 

Recommendations on what to do with devices removed from clinical use - sell? auction? trade-in? recycle? We analyze, our clients pay... $0.

 

Reason #5: Compliance is Everything

 

Are you sure device sold from your facility will not end-up in one of the countries with trade sanctions?   

  

Will your facility be protected if sold device caused injury or death to a future patient?

 

To protect your facility, it is imperative to have the right paperwork in place and we make sure it is.

 

In summary, there are several ways hospitals can handle used medical devices. 

 

Despite their preferred method, it all starts with internal organization, understanding of used device market and what each vendor who deals with used devices will offer your facility.

What are your thoughts on fixing internal process? Do you think it's attainable?  Will it improve efficiency and increase revenue generated from sale of used medical device?

 

 

 

EcoMed works exclusively with hospitals to resell medical devices removed from clinical use. Even if your hospital has another service provider, you may still have questions, need validation, or resources. Contact us with any questions you may have about reselling your medical devices. 
  

To learn more about benefits of being an EcoMed client, send us an email or visit www.ecomedhtm.com.

Who Are You?

"Is EcoMed a medical equipment broker, dealer or remarketer?"

I hear this question a lot.  

Whereas most companies in used medical device space fall into one of these three categories, EcoMed does not.    

EcoMed works exclusively with healthcare facilities to resell medical devices removed from clinical use. 

However, our services, business model and principles significantly differ from traditional brokers, dealers, and remarketers of used medical devices.  

I decided EcoMed must support healthcare facilities after studying used medical device market for few years. 

During that time, three facts became clear to me:    

• All hospitals upgrade/replace medical devices.  Most hospitals have no defined process for removing devices they replaced.  
• Most hospitals either traded-in replaced devices to OEM or used "liquidation" to resell them. The hospital staff were seldom pleased with results of either option. 
• Brokers/dealers who bought used devices through "liquidation" all claimed to "pay the most." Some offered cash. All offered free pick up. 

If all brokers/dealers were paying the most (and cash, and free pick up) then why were hospital staff not pleased?  

 

This question sent me on a quest to interview Hospital Supply Chain staff, contract specialists, surgery center owners, department managers and biomedical technicians.
  

 

I discovered the top 2 reasons hospital staff were not pleased with OEM trade-in and broker/dealer liquidations were

1. Lack of transparency
2. Limited trust  

The other consistent issues noted during interviews were:  

• Hospital staff had limited knowledge about used medical device industry.
• Most hospitals were understaffed and employees were juggling too many projects. 
• Staff often agreed to vendor's offer to buy or consign devices without any data to support their decision.   

During one interview, the Director of Purchasing for TN-based healthcare system said:

"When the same vendor who sold us equipment 3 years ago gave a quote to buy it back, it seemed like we were taken for a ride."  

Hospitals lacked partners to guide them through the process of reselling used medical devices.

They didn't have anyone representing their best interests. 

Some hospitals had 10,000+ vendors in their database.  But all these vendors wanted were to either sell an expensive product or service, or buy hospital's devices or supplies for pennies on the dollar.   

Most hospitals followed an outdated approach to reselling devices that gave mediocre results.

They've been stuck in this cycle for decades because there's never time, resources and budget to explore alternatives.   

All these findings lead me to conclude that EcoMed must be established as an advisor and a trusted partner to hospitals. 

We had to become the company to represent hospitals' best interests when it came to reselling medical devices.   

With EcoMed's mission redefined, we embraced the following 3 principles:         

1. ALWAYS advocate for internal redeployment of devices.  Not many vendors will ask "Have you checked if other Departments can use this device?" when you contact them about selling it, but we do.
2. Educate hospital staff how to resell equipment.  Only STANDARDIZED resale process will improve efficiency and revenue.    
3. Provide UNBIASED advice, customized service, and solutions.    

EcoMed is not a broker, dealer or a remarketer. 

 

EcoMed is a healthcare advisers that specializes in medical device resale and decommission. 

Our mission is to empower hospital staff to make decisions that are right for their organizations and patients.

Do you agree that our principles and services place us in a league of our own?

If you're still not convinced, keep an eye out for the next post where I will share 5 reasons that illustrate how EcoMed's business model and principles set us apart from traditional brokers, dealers, and remarketers of used medical devices.

EcoMed works exclusively with hospitals to resell medical devices removed from clinical use.  Even if your hospital has another service provider, you may still have questions, need validation, or resources.  Contact us with any questions you may have about reselling your medical devices.  

To learn more about benefits of being an EcoMed client, send us an email or visit www.ecomedhtm.com.

Are you asking the right question?

 

Hospital Departments and Supply Chain teams, are you still asking vendors to make you offers on devices you no longer use? 
 
Asking this question makes you vulnerable. It exposes you to receiving value the device is worth to vendors, not its market value. 
 
You must know your device's value.  Asking vendors to name a price for your device is the same as listing your house on Craigslist and asking home buyers to tell you what your house is worth.
 

We tested this theory last month while reselling highly demanded surgical device.
 
For the same device, we asked one group of vendors to submit offers. 


And, we asked second group of vendors to pay our asking price. 

Both groups were comprised of equipment dealers, brokers, remarketers, manufacturers and private 3rd parties located in various regions around the world.
 
Results were exactly as projected.  Vendors who chose to participate from the first group, gave offers that were considerably lower than our asking price. 
 
This is not because they were trying to be insulting, but because they gave us offers based on their perception of what the device is worth. 

We positioned this sale by stating: "Taking Offers! Make An Offer!"  Vendors from first group did just that, they made us offers that were marginally negotiable.
 
Vendors who chose to participate from the second group worked with us and agreed to asking price.  

Since multiple vendors agreed to pay asking price, it gave us leverage and position to negotiate with multiple parties.   
 
After negotiations, final price was 94% higher than the lowest offer and 41% higher than the highest negotiated offer received from vendors who submitted offers.
 
Takeaway of this experiment is simple.  Know the value of your device.  Don't ask vendors for offers.  Tell vendors your asking price.  
 
The only questions you should be asking vendors when reselling used medical devices are their expectations related to functionality, inspection and pickup.
 
This approach sets expectations, keeps you in control and makes resale process more transparent. 


EcoMed works exclusively with hospitals by reselling end-of-use medical devices. Even if your hospital has another service provider, you may still have questions, need validation, or resources.  Don't hesitate to reach out and ask.

 

To learn more about benefits of a managing resale of end-of-use medical devices, visit www.ecomedhtm.com or send an email to med@ecomedhtm.com.          

Are You Ready To Do This Right?

It's that time of the year when goals were just set and New Year's resolutions are still part of our every-other day vocab. 

While this topic is still relevant, let's chat how those of you working in healthcare with medical devices can help your facilities set a goal for successful end-of-use medical device decommission/resale program.

Saying you want to sell or you already sell medical devices outside your facility is not enough. 

If you Google "used medical equipment" your search will return dozens of companies unanimously promising to "buy your used medical equipment" and pay "maximum for your used medical equipment".

How do you know which company to select? How do you know if they are paying maximum when all of them make the same claim? Is selling your end-of-use medical devices to a vendor or accumulating them in storage for an auction even constitutes a program?  Absolutely not.

 

A successful decommission program must be Measurable, Dynamic and Strategic. 

 

Before you set it up, ask yourself and all stakeholders the following 2 questions:

1. Who in the facility will take ownership of the process?
2. Who will be our service provider?

Second question is critical and will make the biggest impact on your program's success, revenue, and available resources.

You need to decide if you want to work with a

• Liquidator - service provider that commonly liquidates devices through auctions.
• Used Equipment Vendor - will offer to purchase all available devices for nominal price regardless of device type, condition or age.
• Re-marketer - specializes in online and email marketing of equipment.
• Consignor - likely to take physical possession of equipment prior to sale completion.  
• Consultant - manages resale process, makes strategic recommendations, coordinates de-installations projects, manages logistics and standardizes process across the whole system.
• Yourself - self-administration of the program.

Completing the following 5 tasks to create a roadmap, use proper sales strategy and leverage negotiations:

1. Identify devices already removed from service.
2. Identify devices scheduled for replacement/upgrade this year.
3. Perform Market Demand and Price Analysis for both device groups.
• Adjust for: cyclical price fluctuation, current FDA recalls and manufacturer's notices.
4. Chart removal time line.
• Put dates on monthly calendar. You will start seeing projects from different Departments and Facilities that can be consolidated for potential cost reduction (ex: removal of obsolete fixed equipment).
5. Use this information to set an annual Sales Revenue Target!

These are the basic components to consider when setting a goal for successful program.

 

A goal will guide you and reduce surprises along the way. It will financially benefit your facility.  It will create consistency and transparency.  It will reduce liability. And, above all it will ensure you remain in control of the process.

 

If you continue to haphazardly handle end-of-use devices by storing them, misplacing documents for sold assets, consigning assets for mediocre service, chasing buyers to pick up sold devices, than you will continue to be frustrated by mediocre results and lack of process. 

Now is a great time to set a goal to implement decommission/resale program in your facility.  Do it the right way and you just may reach your Sales Revenue Target by June!

 

And, if you are planning to self-administer the program, Contact Us for a complimentary list of items you need to have in place before the launch.

 

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

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.

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.

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.