Impact of Federal Interest Rate Increase on Used Medical Device Sales & Liquidation

“Blueprint for recovering from financial losses caused by used medical device liquidation”

Hospitals rely on liquidation, vendors and auctions to sell unwanted and no longer needed older medical devices. 

These companies enable hospitals to get older devices removed from premises and generate revenue.

For the most part, generated revenue covers liquidation expenses and leftover balance is added into hospital’s overall budget.

However, this year, many hospitals using this model began reporting decrease in revenue from used device sales and liquidation. 

Since cost of liquidation is seldom a budgeted expense, there's a growing concern that soon revenue will not be enough to cover liquidation expenses and hospitals will have to pay to remove older equipment.

Let's explore why this situation transpired and what hospitals need to do to fix it.

No 1: Change in Banks’ Lending Practices

In March of 2018, Federal Reserve raised its key short-term interest rate. It was raised again in September. 

The second increase makes business borrowing costs even more expensive. This marks central bank’s fifth rate increase in 12 months with 1 more projected by the end of 2019.

In addition to rate increase, US banks prefer larger loans. However, majority of companies that buy used equipment are small-mid size businesses seeking loans under $250,000. These loans are less profitable and riskier for banks.

Together, increased rate and bank’s inclination for large loans cap buying power for small-mid size businesses that purchase older medical devices in United States.

International companies, also key players in used medical device industry, are also finding it tougher than ever to get loans. 

SME Alliance (UK group representing small and mid-sized enterprises) reports that big banks are reluctant to lend money and small banks follow classic business model which is averse to lending to small businesses.

Result: Small-mid size companies don’t have enough capital to buy older and less profitable equipment.

No 2: Cheaper and Comparable Chinese Alternative

Not too long ago, companies from Middle East, India and Asia chased US hospital-owned older equipment manufactured by GE, Siemens, Stryker and Philips. 

Today, they are less interested in paying premium for brand names because they can acquire comparable and newer equipment manufactured in China.

Chinese manufactured products range from patient monitors, anesthesia machines, X-ray machines to OR lights. They initially cost a fraction of the price charged by their brand name competitors.

These products are yet to break into US market and given the current tariffs situation may not any time soon, however they penetrated Indian and European markets.

Hospitals that purchased Chinese products 5-7 years ago began replacing them. This created an opportunity for Middle East and Indian companies to buy newer and less expensive devices locally and avoid paying excess taxes, customs and shipping costs for imports.

Result: Older US hospital-owned equipment is less desired by international buyers.able for companies overseas.


Shift No 3: Globalization and Accessibility

Surge of online websites that specialize in selling used medical devices created a buyer’s market.

In US, there are dozens of websites for auctioning and reselling used medical devices. They are competing among each other as well as big rivals, eBay and Amazon.

In addition to US based websites, in the last 2 years, UK, Saudi Arabia, France, Mexico, Ukraine and India created their own online marketplaces to sell and auction used medical devices.

There is no more scarcity of devices. 

Buyers have more device options and places to buy them. 

Participation in scheduled auctions/liquidations has been declining and as a result auction companies are scrapping larger volume of devices than ever.

Result: Greater supply and access to equipment caused decrease in demand and interest.

Current Scenario

With less buying power, both US and international buyers are paying less for older equipment. 

They are saving money to buy newer devices that are guaranteed to be more profitable for them. 

In addition, international buyers who bought almost 80% of US hospital-owned older devices are now shifting to local products.

Vendors, who within the last 12 months, bought older devices from US hospitals are suffering from inventory surplus. To generate cash flow, many of them started selling off accumulated devices at a loss further reducing already low prices.

Meanwhile, US hospital are seeing revenue decrease from older device sales and having more equipment scrapped than sold.

Cost Opportunity Proposal

Financial analysists do not anticipate this trend to reverse in the near future.  Additionally, forecasted instability in the stock market and enacted tariffs will compound this situation.  

However, there is an option hospitals can exercise to hedge and improve sales revenue from medical devices that were removed from clinical use.  

To learn more about this option contact our office for the remainder of this article.  

You will receive a copy of viable and easily attainable solution your facility can implement to alleviate financial loss created by globalization and current surplus of older medical devices on the market.

EcoMed works exclusively with hospitals, surgery centers, imaging centers and independent healthcare providers by managing resale and transportation of used medical devices. Contact us for COMPLIMENTORY recommendations, resources, support and medical device industry insights that will help your organization make the right decision on how to handle medical devices removed from clinical use.  

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. 

7 Mistakes Hospitals Make When Selling Used Medical Devices

With great uncertainty looming over the future of healthcare, hospitals are revamping internal processes to save money. 

One of the least discussed processes and most mismanaged is the resale of end-of-use medical devices. 

These are not  the "end-of-life devices" with obsolete technology and zero market demand.  These are working devices, supported by OEM, just no longer needed by the hospital, with moderate-to-"I REALLY NEED IT!" market demand.   

To generate revenue from end-of-use medical devices, hospitals either auction them, trade-in to OEM or resell to vendors.  

Each of these methods has its flaws and benefits, but the underlying problem is the absence of a dedicated person trained to resell equipment.  

Person tasked with reselling equipment usually joggles multiple projects.  Reselling equipment is seldom a priority.  Without proper training, this person likely follows an antiquated formula for reselling to vendors that goes like this: 

"Email at least 3 vendors to buy equipment.  Get 3 bids. Pick the highest.  Show it to the Boss.  Get Boss's approval.  Notify highest bidder.  Get paid when bidder picks up equipment.  Deliver payment to Finance.  Light up a cigar for a job well done... well, maybe no cigar"

In a nutshell, most hospitals across the nation use this antiquated formula to resell used medical devices.
 
Let's review 7 reasons why this formula doesn't work.

1.  Wrong Start:  How do you decide which vendors to email?  Do they need to be "in the system"? Are they current service providers?  Or, do you go to DOTmed and select top 3 companies?  By the way, those companies pay to be displayed at the top, that doesn't mean they pay fair value for used devices.   

Used medical device industry is GLOBAL.  Emailing 3 vendors you know, found on DOTmed or Google is the wrong way to start this process.  Before finding vendors to bid on equipment, you must determine average global resale value of your device. 

2.  Three Vendor Dilemma: Asking same 3 vendors in your digital rolodex to buy your used equipment is like going to the same hairstylist you don't particularly like but you go because it's convenient.   

In reality, unless your vendors specialize in refurbishing, warrantying and reselling equipment to an end-user, they will give you a low, below market bid.  Only vendors described above know true value of equipment and have the confidence of reselling it later.  These 2 elements are essential in attaining the best bid.    

Also, if you only contact 3 vendors, it's very likely that they know each other.  Used medical device industry is a small, niche market and most vendors work together and resell equipment to each other all the time.   

Have you ever wondered why sometimes, received bids are identical?  

Could it be a coincidence... or a scheme?  You will never know unless you expand your vendor network.     

3.  Vendor vs. Real Estate Agent: Asking your vendors to buy your equipment is like asking your Real Estate Agent to buy your house. 

Imagine how devastated (and pissed and foolish) you may feel if you sold your home to a Real Estate Agent, who sold it for $15k more the following month?! 

Houses don't appreciate by $15k in 30 days, but equipment does in the hands of someone who understands used equipment market. 
 
Of course, this will never happen with your house because Real Estate Agents are governed by state laws and follow strict NAR code of ethics that prohibits them from conducting certain transactions. 
 
Vendors that buy medical equipment directly from hospitals are not bound by any laws or code of conduct and can do as they please. 

For this sole reason, it is safer to outsource resale of end-of-use medical devices to an independent company that works for your hospital instead of approaching vendors directly!

4.  Trade-in Drama.  During equipment upgrade, you ask OEM supplying new equipment to give you a trade-in value for old equipment.  You do know, that the value OEM offers is not market value, right? 

OEMs are not obligated to offer fair trade-in values.  According to OEM documents, trade-in value needs to be nominal. (Hint: If it's not in OEM Master Agreement, then it's in the Service/Product Agreement OEM has with your GPO.) 

So what's a nominal value and how do they arrive at it? 

In most cases, information about your old equipment goes to OEM "trading desk" which is just a fancy description of an obscure process that follows. 

Trading desk personnel share information about your equipment with OEM contracted dealers and distributors and asks them to bid on your equipment. 

After bids are received, OEM will take their slice off the top bid and Voila, you have your nominal trade-in value!

5.  Negotiations, what's that? Bids vendors submit to purchase used devices are seldom, if ever negotiated. 

You hustle over new equipment pricing, service terms and other perks to add into Purchase Agreement, but somehow negotiating best price for the same equipment you are selling years later is not of interest. 

Sure, if you are selling a run-down Cyto Tek Centrifuge, it's not worth the effort.  You should scrap it and not waste time on finding someone who will buy it. 

But, if it's desirable equipment such as C-Arm, why are you giving it away for a top bid of $5000?

6.  Top Dollar Marketing Bait.  All vendors claim to pay "Top Dollar, Highest Value, Best Price for Your Equipment".   

In reality, no vendor will pay top dollar unless they need your equipment at the moment you are selling it.   

Vendors buying for inventory WILL NEVER pay top dollar.  

To get top dollar, takes time, patience and large network of vendors in United States and overseas. 

Is it worth the time building that network?   

Definitely not if you plan to sell Level 1 Fluid Warmers or its equivalents. 

But if you're serious about generating revenue and selling Hospital Beds, Infusion Pumps, Surgical Equipment, Ultrasounds, yes, it is absolutely worth it. 

You will generate double or triple the trade-in value offered by OEM by selling to US dealers, or get 4x as much by selling the same devices to vendors in Africa and Latin America.

7.  Missing Paperwork:  More hospitals are getting into trouble with  CMS, FTC and EPA for making mistakes when reselling equipment.   

Why?   

Because in this industry, almost every vendor who buys equipment from the hospital (again, unless they specialize in refurbishing, warrantying and reselling) will resell it to another vendor.   

Equipment can exchange 4 sets of hands until it finds its second permanent owner.   

Not every vendor will remove patient information from an EKG machine.  Not every vendor will check whether their buyer is located in the country that has trade sanctions imposed by US Department of Treasury.   

Failing to have proper paperwork and lack of due diligence, lands hospitals in hot water with governing authorities.   

When that happens, time required to correct mistakes and fines for hustling are astronomical. (Fact: Medical Center in New York was fined $113,000 by EPA because vendor retained to de-install an obsolete imaging system improperly disposed oil from the generator.)

Selling end-of-use medical devices to vendors has been practiced by hospitals for decades.  When it's done properly, it's a great way to supplement budget deficits and create additional revenue. 

The problem is that 90% of the time it's done haphazardly and without much thought put into the process.  The process is either broken or doesn't exist. 

If you truly want to act in the best interest of your hospital and have C-Suite sing you accolades at the next Town Hall, stop hustling and using an antiquated formula that yields mediocre results and can get your facility in trouble.
 
Fix the process, stop segmentation that occurs when each department does its own selling, identify key person (and please, not the overloaded, swamped and frustrated Contract Specialist or Buyer in Purchasing) who will manage the process FULL TIME.  Train them!  The results will be unrivaled. 

We are here to help you decide the best way to decommission medical devices your organization no longer uses. Even if you work with another service provider, have questions, need suggestions, looking for validation or resources, EcoMed is here to help. 

 

To learn more about benefits of a managed Medical Equipment Decommission Program, please 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.

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. 

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. 

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.

This No Longer Best Practice is Now Getting Old

Trading-in older medical equipment for new medical device, is an aging and unfruitful practice of a Healthcare Supply Chain.  Healthcare systems that separate these two acts have a financial advantage because they can

1. Resell older equipment at market price, rather than nominal price paid by OEM 
2. Calculate true cost of equipment ownership
3. Maintain leverage in negotiating best price for the new device

Acts of procurement and trade-in are like “bride and groom,” it appears one cannot exist without the other.  But in reality, it is a poor marriage of incompatible entities, destined for cataclysm from the beginning. 

Trading-in equipment only complicates an already arduous process of procuring new medical device.  Among many dissatisfactions shared, the single, most frequent frustration expressed by 100% of Healthcare systems surveyed on this topic was

"Receiving substantially less than the Fair Market Price for trade-in equipment from OEM"

There are a multitude of reasons behind low prices paid by OEM for trade-in equipment but the most common one is due to OEM Trading Desk process.  Most OEMs have a Trading Desk that is responsible for collecting trade-in equipment details from all sales reps. 

These details are than distributed mostly to OEM-only contracted vendors who bid on available trade-in equipment.  Vendor with the best offer gets awarded the equipment. 

Of course, this is an oversimplified glimpse of what actually takes place.  But, without getting into semantics of the bidding process and how much of the vendor’s received offer is in fact given to the Healthcare system, this process devalues trade-in equipment at least twice from its fair market price.

Knowing about the general Trading Desk process, is the first step in recognizing that the relationship between procurement and trade-in acts is toxic. 

By separating these two acts into independent tasks, Healthcare systems can

1. Maintain an advantage during purchase negotiations for new device while
2. Retaining full control over resale of older equipment  

While it may not always be possible to divorce these two acts due to prior contractual obligations, it is certainly advisable and financially advantageous (in most cases) to explore and establish a formal, internal process going forward.  

In the past, trading-in older equipment was customary.  Today, in the age of value-based healthcare, continuing this aging practice is equivalent to mishandling organizational capital assets and funds. 

Managing and controlling resale of older equipment earmarked for OEM trade-in, is one of the simplest and guaranteed ways of creating additional revenue from an already existing and owned resources.

Reflection and Few Words of Gratitude

Yesterday was a very special day for my family.  It was my son's second birthday.  Yes, he was born on 11.12.13 and as he grows up, his friends and those who learn of his birthday will likely think that it is the coolest birth date ever. 

However, two years ago today, instead of celebrating his birth, we were praying for his survival because shortly after being born, his left lung collapsed and he was intubated. 

That was the hardest time of my life and I do not want to relive it.  However, I do want to express my deepest gratitude to doctors and nurses that went above and beyond the call of their profession to care around the clock for my son.  Within ten long and painful days, they nursed him to perfect health and he was able to come home. 

I cannot articulate the gratitude and appreciation I feel each day when I look at my little boy.  Words also cannot express the honor and exuberance I felt when I found out that EcoMed was retained for a project by the same hospital that saved my son's life.  

"As we express our gratitude, we must never forget that the highest appreciation is not to utter words but to live by them"

~ John F. Kennedy

 
It was bittersweet to walk through the main entrance of this hospital for the first time since two years ago.  And, although I didn't have to be on the second level, I couldn't help but take the East elevator up and stand in front of the NICU hoping that all the babies that are there now can follow my son's journey and go home. 

 As my mind drifted away to that breezy and sunny November of 2013, I quickly forced myself to regain composure because this time I was here for a different purpose.  There was a monumental task at hand and it required concentration and undivided attention.   
 
I took the elevator to the ground level and reunited with my crew in Radiology Department.  As always, expertly and with scientific precision they were already dismantling one of the imaging systems that had served its purpose.  With great ease, they swiftly worked with simple tools and within hours parted out an imaging table, a gantry and removed overhead ceiling rails. 
 
Dismantled parts were laying in several meticulously arranged piles on the floor.  Later, each pile will be taken to an appropriate recycling plant where it will be stripped of oils, harsh metals and reprocessed.  But now, the hallways were buzzing with patient traffic and my crew had to work around these piles.  It wasn't until 8pm that a first handmade dolly made its way out of the hospital carrying all the dismantled parts of a system that once was used for patient diagnosis.    
 
I mention simple tools and handmade dolly for a reason.  Certainly, not because I would want anyone to think that my crew operates with cavemen technology, but because I want everyone to know that we carefully choose where and how we allocate resources.  While our tools may not be as shiny and new, they function extremely well. 

It is not the tools that do the job, but the crew who expertly know how to use them.  In a race to have the latest and greatest technology, simple facts such as this one are often forgotten.  I firmly believe the reason we were awarded this project is not because of my patient experience or because my crew had the latest technology but simply because we were able to provide quality, value, timely service and deliver significant savings. 
 

After two, grueling eleven-hour days, phase one of the project was completed.  I was left alone, standing in an empty hospital hallway overwhelmed with a business sense of accomplishment and an authentic, human feeling of gratitude.  I am convinced that those who have found their true calling in life, strive to execute it with meticulous precision and the last 24 hours proved that I was on the right path. 
 
The gift of working on a project for a hospital that saved my son's life was nothing short of a blessing.  I always inspire EcoMed team to take ownership and responsibility in everything they do, but for this project in particular, I aspired to supersede even my own expectations.  I'm overjoyed to say that it was a privilege to help and improve a hospital that saved my son and I could not have done it without the help of EcoMed family.