MedAssets seeks consolidation in supply of parts, refurbishing

Firm acquires imaging parts supplier ReMedPar

During this decade, more and more large equipment OEMs have begun to provide multivendor maintenance service. This trend, coupled with growing economic pressures on hospitals and other scanner end users, has sparked a proliferation of companies supplying equipment service providers. In this environment, conditions could be ripe for a consolidation of both parts and refurbished equipment supply firms.

“All (service) organizations—whether in-house, OEMs, or independents—are looking for broader access to all types of parts and broader capabilities from their suppliers,” said Chip Halverson, president and CEO of MedAssets Exchange in Wood Dale, IL.

MedAssets, created last June through a management buyout of the bulk of personnel, equipment, and other assets of Comdisco Medical Exchange (SCAN 8/18/99), is one company looking to ride the wave of consolidation. MedAssets last month acquired ReMedPar, a Goodlettsville, TN-based medical imaging parts supplier. MedAssets will retain the ReMedPar name and continue to use the Tennessee facility.

This is not likely to be the last purchase by MedAssets, according to Halverson. The firm’s financial backers are behind a strategy to grow both internally and through acquisition of related businesses.

MedAssets is currently one of the larger firms involved in medical imaging parts and refurbished equipment supply, industries that remain highly fragmented, he said. About 60 or 70 independent suppliers, none of which has more than a single-digit market share, compete in both the medical imaging parts and refurbished equipment sectors in the U.S.

“There is room for consolidation and for a major organization to emerge that has depth and breadth of services, financial strength, and marketing reach,” Halverson said.

Equipment maintenance organizations now are forced to go through the ordeal of searching a multitude of suppliers in order to obtain the right parts and related supplies to service the full spectrum of imaging modalities and systems from all imaging vendors, he said.

“We are pulling together products and services to extend the life of the (imaging equipment) installed base and to facilitate multivendor service,” Halverson said. “If we bring together these different capabilities and have a broad enough product offering, people will look to us not only for the breadth of product offering but for price and quality.”

MedAssets will not supply actual maintenance services, since its own customers are the independent service organizations (ISOs), OEM multivendor service groups, and in-house hospital service organizations. However, the company has built up significant technical expertise in both the systems and parts businesses, which can be used to support maintenance efforts and provide equipment installation and other related services.

One of the products picked up in the ReMedPar acquisition is a remote equipment diagnostics software package, which MedAssets can now supply to its service and hospital customers. MedAssets also has a fleet of mobile MRI, CT, angiography, and cardiac catheterization units purchased in the Comdisco buyout. The company leases this equipment either for temporary use as hospitals change equipment or for long-term—up to five years—supply of imaging services.

While steady downward price pressures in the supply of medical imaging equipment was a main reason Comdisco decided to divest most of its refurbished parts business (SCAN 4/14/99), MedAssets remains bullish about future prospects, Halverson said. A main reason for confidence is that hospital customers, under price pressures themselves, are looking for cost-effective ways to extend the lives of existing imaging systems.

“If we can provide the means for them to extend the life of their equipment through field upgrades and more ready access to parts and other technical capabilities, we think they will be buyers,” he said.