The medical equipment industry is a dynamic one. It’s also a competitive one.
That’s the word from Joh-Paul Smolenski, a vendor finance manager here at Direct Capital. Smolenski works alongside medical equipment vendors and doctors on a daily basis. He was kind enough to give us a glimpse at how the industry is doing as of September 2011. Join me for the ride.
What’s In Demand
Because doctors are so busy, Smolenski said, trust, speed and service are paramount. Thus, the field of financing for medical supplies and equipment is fast-paced and competitive.
The need is also acute. Many doctor’s offices and hospitals are switching over to Electronic Medical Records for the first time, and it’s an expensive undertaking, to say the least. Having a partner that can help doctors access the equipment and software they need with a reasonable payment structure is vital for both sellers and buyers, he noted.
“A lot of MDs are financing their Electronic Medical Records, which is the software they need for treating patients and recording the data instead of filing everything in paperwork and storage cabinets,” Smolenski said. “Every doctor is mandated to have the software by 2014. If they don’t, they will start to be penalized for it.”
While EMRs are the headlining need for many doctors, there are other needs that stand out in the segment. CBC analyzers, which are used to perform blood and urine tests in-house rather than sending samples to laboratories, have been in demand for the last couple of years. While the initial cost may be high, financing can help to mitigate that, and over time doctors save on a price tag that Smolenski estimates to be up to $30,000 a year.
Where The Industry Is Headed
As was the case with so many industries, 2009 “was a year to forget,” according to Smolenski.
“Everything was extremely slow across the board,” he said.
Then 2010 brought brighter days, thanks to an improving economic forecast, and the expanded availability of financing. The good times rolled on into 2011, where things were “dynamite” until they hit a snag thus far in September. Smolenski has an easy explanation for that.
“A lot of doctors have small businesses with less than 10 employees, so when their kids go back to school—especially college—they pay for tuition this time of year and focus less on their business,” he said.
The good news is that many doctors need new equipment and supplies for the fourth quarter, the chilly season where so many get sick and need medical attention. Okay, the getting sick part isn’t good news. Still, doctors are busier, medical vendors are busier and the finance firms like Direct Capital see a corresponding rise in demand for equipment financing. It’s also tax season, and Smolenski said doctors are looking to invest in their practice while protecting themselves from the IRS.
Need Medical Financing?
Direct Capital has been providing medical financing for years, and Smolenski understandably touts that fact.
“Doctors trust Direct Capital because it is quick and easy to work with us,” he said. “Our rates are as competitive as the largest financial institutions, but our speed and service are untouchable.”
Hey, can’t argue with that. If you have medical financing needs or if you provide equipment to the medical industry, check us out and see if we can help. It’s just a hop, skip and a click away!
What are your thoughts on what’s going on in the world of medical?
Check out our previous post on machine tools and stay tuned for more vendor trend reports from Direct Capital! Let us know what you think of the series.