by
Philip F. Jacobus, CEO | September 04, 2014
From the August 2014 issue of HealthCare Business News magazine
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.
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