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.

Holidays, Goals and Lots of Noise

The Holidays are officially here. And despite the politically correct name, it is officially shopping time, party time, vacation time, family time, gift-giving time, bonus time, travel time, TV time, and of course, the Facebook posting time. 

 

It can also be an emotional time, spent reflecting, remembering, and reconsidering what you mediocrely did in the past that can be done better in the future. 

 

New plans and goals are made. Some of them are even kept and achieved. Most, unfortunately are not because plans and goals made in the heat and emotion of the moment are often not realistic.

 

So while the corporate world is buzzing with next year's action plans and online marketplace is screaming which gadgets you absolutely must buy, because apparently everything you own will be obsolete in less than 7 days, maybe, for just a moment, you can block their noise by 

• Hanging out with kids. They make you forget about adult hassles and welcome you into the world where being silly and awkward are rewarded with laughter, where stories are not judged and promises are kept.  
• Getting together with people closest to you.  And telling them how grateful you are to have them in your life. Trade memories, share ideas and raise a toast to new adventures. 
• Staying realistically positive. Everyone struggles, at home, at work, at the airport. Anywhere you look, it seems like a challenge, or an annoyance-of-sorts is lurking in the shadows. Pay a tribute to it with a glass of wine, or your spirit of choice, and move on to something that will make you laugh. 
• Making peace with at least one person. There's someone you'll see during the season that's not your favorite. Don’t succumb to negative impulses, maybe even say “hello” and see where it goes.   
• Being your own Santa. Make a list of gifts to buy for yourself! Something nice. Something you really want. Celebrate yourself, your past year and your next year. 

And as much as I want to keep work out of this post, I cannot. Many of you will be working. Hopefully the time and effort spent in the office will get you one step closer to achieving your professional goals in 2016.   

 

With all that, I wish you and your families good health, happiness, laughter and love. May you enjoy the time with the ones you love, the ones who love you, the ones who keep you safe and the ones who give you comfort.

 

Let this be a Very Merry Christmas and let the New Year bring new adventures, professional successes and personal victories into your life.

Decoding Buyer Profile

Understanding consumer behavior is not an easy task.  According to Psychology Today “it is a hotbed of psychological research as it ties together communication, identity, social status, decision-making, mental and physical health”.
Collected data is further segmented by corporations to position themselves on the market, advertise products and forecast revenue.

While this information is not groundbreaking and slightly boring, you are probably thinking, how is it relevant to me?

If you are employed in a healthcare setting and involved with replacement of medical devices, understanding buyers that purchase pre-owned medical equipment directly from Healthcare Providers will help you target an appropriate audience for devices that are being removed from service.

To attain the most financially advantageous outcome in a direct sale of end-of-use medical devices, you need to recognize that your buyer is first of all, a consumer with specific needs that fit their business model. 

The following list summarizes services and products of most common buyers that purchase pre-owned medical equipment directly from Healthcare Providers.  Selecting the right buyer will result in additional revenue in your pocket, well technically not yours, but nevertheless, it will make you feel like a hero... or a hustler! 

1.      Remarketer – these companies specialize in Marketing used devices.  After obtaining manufacturer, model, production year and photos of equipment, they market it on the internet, by email and directly to medical equipment dealers. 

These companies seldom set selling prices and often solicit offers.  The highest offer received is reduced sometimes by as much as 60% before being presented as the purchase price for equipment. 

Occasionally, remarketers will accept equipment on consignment where the split may be as high as 60/40 (in their favor), but most prefer not to handle equipment directly, meaning it remains with the facility until buyer is located. 

Remarketers specialize in marketing and advertising services and seldom possess technical training required to check functionality, review service history or confirm eradication of ePHI before handing over device to the buyer.

2.     Reseller – these are the “Jacks of all Trades, Masters of ...” companies.  They purchase all types of used medical equipment. 

Resellers often purchase on site and by the “box”.  They contact Biomed, Materials Management and if they can get to, Purchasing Departments to inquire if any used equipment is available for sale.  They may send a truck directly to equipment storage area and make an offer on whatever is available.  

Since these companies pick up equipment by the box, they cannot predict if anything valuable is buried on the bottom, so at the risk of overpaying for scrap, they have no choice but to make low purchase offers. 

A lot of equipment they obtain is scrapped, some is resold to dealers, refurbishing companies or occasionally to end-users.  Resellers have some technical skills and may provide basic services such as minor repairs, parts replacement, cleaning and painting before reselling equipment.   

3.     Refurbisher – companies that actually refurbish medical equipment are highly skilled and often ISO certified.  They take great care and pride in their refurbishing process which is often documented and available for review. 

Technicians working at these companies are frequently certified and manufacturer trained.  Refurbished equipment is sold with a warranty to an end-user who may be a Healthcare Provider or an academic organization. 

Since refurbishing companies are dealing with end-users and have additional sources of revenue such as warranties and service contracts, they pay top dollar for used medical equipment.  With that said, they are more selective in their purchases and abstain from outdated technologies. 

4.     Original Equipment Manufacturer – “aka” the OEM enters the picture when older, not outdated equipment is being replaced.  OEM will do a trade-in, or “buy back” older equipment and apply price offered for a trade-in as a credit towards purchase price of the new device. 

OEM, rarely if ever, pays a fair price for trade-in equipment.  It is critical to review every dollar sign in the new device Purchase Agreement because price paid for a trade-in is likely embedded in it. 

Since OEM obtains most of the revenue from sale of new equipment, few have interest in refurbishing equipment they take on a trade.  Thus, they either destroy it to prevent from entering the secondary market or resell it to an OEM-contracted vendor. 

Either way, while it may be convenient to have an OEM pick up older equipment and it’s attractive to see lower price of new equipment on paper, in reality, this practice prevents underserved medical community from acquiring affordable equipment and bluntly stated “leaves money on the table”.    

Deliberately omitted from this list are Auction Houses that are starting to saturate the online marketplace.  Auction Houses do not purchase equipment. Equipment is consigned to them and their job is to sell it through an auction. 

Slightly simplified, but the auction process begins after substantial amount of equipment is collected from several facilities.  Prospective buyers stored in Auction House’s database are notified of date, time and location. 

Since Auction Houses provide an auction platform, they do not get involved in details that

may enhance price of equipment such as replaced parts or recent PM. Their scope of service doesn’t include operability verification, eradication of ePHI and conducting de-installation of fixed systems.  Those tasks are transposed to prospective buyers. 

Information provided to prospective buyers is limited to manufacturer, model and quantity. To participate in an auction, buyers are limited to those having a credit card and available during set auction time.  Buyers typically pay a premium fee that may be as high as 20% per transactions and some Auction Houses actually impose a fee on sellers thus further reducing the overall generated revenue for the seller.  

When working with an Auction House, it is essential to keep a very detailed list of consigned equipment, review items sold at each auction, audit items that did not sell and will be auctioned at a later date, review all sale prices and associated buyer and seller fees. 

This list is not intended to minimize or maximize buyer’s expertise but to distinguish between their service offerings which directly impacts their buying practices. Purchasing used medical equipment directly from Healthcare Providers is done all the time, but this practice is not regulated and buyers set their own rules and prices, thereby often claiming they “can offer the best price”. 

While receiving the best price is a sweet melody to one's ear, understanding buyer’s role and business model can guide Healthcare Providers into making an appropriate decision as to which buyer to engage for a specific device and what deliverables to expect from their joint collaboration.