Ed Sloan
How to save on service and parts
September 04, 2014
by Philip F. Jacobus, CEO
[Editor’s note: This is the first installment of Cost Containment Corner. This is planned as a recurring column in DOTmed HealthCare Business News. If you have suggestions for individuals to be interviewed or technology or services that can help health care providers to save money, we want to hear from you. Send your ideas to stories@dotmed.com with the subject line “Ideas for Cost Containment Corner.”]
Ed Sloan, Sr. founded ReMedPar in 1987, which was eventually purchased by Aramark. In 2008, he founded Ed Sloan & Associates, and has been instrumental in launching MESA in Switzerland as a Pan-European Union independent service organization.
If it is happening in the diagnostic imaging marketplace, chances are Ed knows about it (full disclosure: Ed also serves on the DOTmed Board of Directors). In early July, Philip Jacobus, DOTmed’s President, caught up with Ed on the phone to ask him about policies and procedures that can lower the cost of health care.
HCBN: What new technology is lowering the cost of health care?
ES: Remote monitoring and remote diagnostics are two trends that are really exciting to me. My engineers receive an email when an MR chiller shuts down. We can read helium levels remotely and using the Internet, we can connect to a computer to determine what is wrong with the system. This technology has been around for awhile in industry. When it is fully integrated into the health care delivery network, it is going to require fewer people to monitor more machines on a real time basis and do it at a lower cost.
HCBN: What about ‘proprietary software programs?’
ES: It is true that manufacturers design software which is protected, but I predict in the same way that there are third party developers for iPhone and Android apps, there will be software developed for remote monitoring, remote diagnostics and eventually remote calibration. In the same way the Internet has changed the world, it is changing health care.
HCBN: What about your experiences in Europe?
ES: Europe is changing every day. There are many more independent service companies than there were five years ago, let alone 10 years ago. OEMs are servicing each other’s equipment because there is less business for them. In the end, the need for better and less expensive patient outcomes will drive more independent and in-house service in Europe. Europe will be more open like the U.S. is today because European providers will demand it.
HCBN: Your company is involved in the spare parts business. What can you tell us about that industry?
ES: I think the spare parts business is going to have another consolidation. In addition, I noticed that many parts companies are working together more closely. In the early ‘90s the aftermarket in health care coined a word “coopetition” meaning we cooperate and we compete as companies operating in the same space. Health care providers want someone to solve their problem when they need a spare part. Many providers like to go to one person and ask that person to source the part reliably and quickly. I believe customers are looking for a one-stop shop because they are so busy that they do not have the time to shop around. In the end, the solution costs less because suppliers work together to achieve economies of scale.
HCBN: Do you think it is possible to get multiple firms to work together?
ES: I think it is inevitable. It might require one player to invest in multiple companies, but as companies make sales and benefit from these kinds of relationships, they will be happy. If my customer needs a part and your company can supply it reliably, then my customer is happy and I am happy and you are happy. When smart people are making money together, they keep working together, they cooperate. When providers pay less, they are happy.
HCBN: Is the Internet changing the way providers buy parts?
ES: Absolutely, but only if the provider feels safe and trusts the company they are doing business with. The Internet makes the market more efficient and makes pricing more transparent. If you do not provide quality in today’s market the Internet will expose you. If you do provide quality at a lower price the Internet will help providers find you and reward you.
Ed Sloan, Sr. founded ReMedPar in 1987, which was eventually purchased by Aramark. In 2008, he founded Ed Sloan & Associates, and has been instrumental in launching MESA in Switzerland as a Pan-European Union independent service organization.
If it is happening in the diagnostic imaging marketplace, chances are Ed knows about it (full disclosure: Ed also serves on the DOTmed Board of Directors). In early July, Philip Jacobus, DOTmed’s President, caught up with Ed on the phone to ask him about policies and procedures that can lower the cost of health care.
HCBN: What new technology is lowering the cost of health care?
ES: Remote monitoring and remote diagnostics are two trends that are really exciting to me. My engineers receive an email when an MR chiller shuts down. We can read helium levels remotely and using the Internet, we can connect to a computer to determine what is wrong with the system. This technology has been around for awhile in industry. When it is fully integrated into the health care delivery network, it is going to require fewer people to monitor more machines on a real time basis and do it at a lower cost.
HCBN: What about ‘proprietary software programs?’
ES: It is true that manufacturers design software which is protected, but I predict in the same way that there are third party developers for iPhone and Android apps, there will be software developed for remote monitoring, remote diagnostics and eventually remote calibration. In the same way the Internet has changed the world, it is changing health care.
HCBN: What about your experiences in Europe?
ES: Europe is changing every day. There are many more independent service companies than there were five years ago, let alone 10 years ago. OEMs are servicing each other’s equipment because there is less business for them. In the end, the need for better and less expensive patient outcomes will drive more independent and in-house service in Europe. Europe will be more open like the U.S. is today because European providers will demand it.
HCBN: Your company is involved in the spare parts business. What can you tell us about that industry?
ES: I think the spare parts business is going to have another consolidation. In addition, I noticed that many parts companies are working together more closely. In the early ‘90s the aftermarket in health care coined a word “coopetition” meaning we cooperate and we compete as companies operating in the same space. Health care providers want someone to solve their problem when they need a spare part. Many providers like to go to one person and ask that person to source the part reliably and quickly. I believe customers are looking for a one-stop shop because they are so busy that they do not have the time to shop around. In the end, the solution costs less because suppliers work together to achieve economies of scale.
HCBN: Do you think it is possible to get multiple firms to work together?
ES: I think it is inevitable. It might require one player to invest in multiple companies, but as companies make sales and benefit from these kinds of relationships, they will be happy. If my customer needs a part and your company can supply it reliably, then my customer is happy and I am happy and you are happy. When smart people are making money together, they keep working together, they cooperate. When providers pay less, they are happy.
HCBN: Is the Internet changing the way providers buy parts?
ES: Absolutely, but only if the provider feels safe and trusts the company they are doing business with. The Internet makes the market more efficient and makes pricing more transparent. If you do not provide quality in today’s market the Internet will expose you. If you do provide quality at a lower price the Internet will help providers find you and reward you.