While it’s hard to guess how much a certain piece of equipment will sell for in an auction — the market is always changing — an auction is a hospital’s best chance at making a dent in debt owed, says McDaniel.

Hospitals have two types of auctions to choose from when selling their assets: live (onsite auctions) or online auctions.


Hospitals may turn to a live auction instead of an online auction if they are short on time. In some cases, a live auction can liquidate assets in anywhere from two to eight days, while an online auction may last several weeks.

Centurion Service Group, a company that manages both online and live auctions, recognizes that live auctions create immediacy.

“A frenzy usually feeds to higher prices, and you can look at the competition in the eye, and that’s where the ego steps in — you’re not going to let this person win, and the price goes up from there,” says Erik Tivin, Centurion’s CEO.

Online auctions, says McDaniel, also create bidding frenzies. Another factor unique to online auctions is the exposure products receive. Online, the audience is limitless.

Lee McLendon, formerly the CEO of Bossier Specialty Hospital, is now in charge of the liquidation of the facility after the decision was made in September 2009 to liquidate assets rather than declare bankruptcy.

Through a DOTmed online auction, McLendon was able to reach a wider range of potential buyers, including international buyers.

“I had assets to sell that had a cost basis of $4.5 million,” he recalls. “That’s a whole lot of stuff. It took a whole lot of transactions. Without opening to a broader market [through auctions], there’s no way I would have sold all that stuff.”

Economic stress
While the economy is starting to show signs of recovery, hospitals “continue to be adversely impacted by the lingering effects of the economic recession,” based on a hospital survey published earlier this year.

The survey revealed that patients delay or forgo care — 70 percent of hospitals reported fewer patient visits and elective procedures. Making the situation worse, almost nine in 10 hospitals reported an increase in care for which the hospital received no payment at all.

In order for hospitals to stay afloat, they have made significant changes, including cutting administrative costs, reducing staff and curtailing services. The survey found that 89 percent of hospitals reported they had not added staff or increased staff hours. Ninety-eight percent reported not restoring services or programs previously cut due to the economic downturn.

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