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Equipment dealers will need GPO contracts to compete

by Loren Bonner, DOTmed News Online Editor | July 18, 2013
Jeff Weiss
CEO of Atlantis Worldwide
Jeff Weiss, CEO of Atlantis Worldwide , has been in the refurbished medical equipment business for over 20 years. His company has survived many changes in the market. He shares his opinions on some of the challenges facing dealers and sellers in today's shifting health care environment. Here's an edited version of our conversation.

DMN: Many business owners and executives see the changing health care environment as chaotic. What's your opinion?
JW: I wouldn't say it's chaotic. Is it ever changing? Yes. It's the change that's been going on the past 20 plus years I've been in business. Health care is always changing. There are changes in reimbursement, changes in competition and technology. Change is inevitable. I try my best to understand what the changes are and remain competitive.

What have you noticed lately with capital spending in health care?
JW: Health care capital spending seems to be at a standstill. As hospitals try and understand the requirements being placed upon them to convert from Integrated Delivery Networks to Accountable Care Organizations, they take a very cautious stance. On top of that, when you consider that 33 percent of the sequester cost reductions are coming out of the health care marketplace, you see very little capital spending on new equipment, service line expansions and acquisition ventures in health care at this time. So it is a very flat market where capital spending is concerned.

DMN: What do you see as the biggest shake-up for medical equipment dealers and sellers from health care reform?
JW: For medical dealers — for all of us — it's going to be your ability to weather the storm in order to remain viable as things change. We have to contend with the ramifications of the Affordable Care Act. Frankly, I still think we're dealing with the ramifications of the DRA in 2006, when the government began lowering reimbursements for imaging centers. But what I've noticed in the past several years is the purchasing decisions leaving the hands of the radiologist and department director, where they used to be. Now those decisions are being made at the corporate level. Mostly, we see decisions being made in the world of ISDNs. And we see that as a huge change. Moving forward, you are seeing ACO's adopting centralized purchasing for all members of the ACO. Supply chain management now has tremendous power within a delivery network. Equipment dealers, both OEMs and resellers, are going to need GPO contracts to even compete for a health care provider's business from now on. Product standardization, volume purchasing power, and volume discounts will play even more of a role as we move forward. Supply chain management is where the power is.

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