Written By: Larry Stevens
When we opened the doors of Med One in April of 1991, we believed we had a simple strategy to offer hospitals a better way to acquire equipment through the use of equipment leasing. Leasing was then as it is now, a standard way for businesses to acquire the use of equipment and because of significant changes that had been enacted as it relates to Medicare reimbursement policy, hospitals were beginning to embrace this tool in their business philosophies as well.
Then as now, our approach to equipment leasing was built upon three significant pillars.
Our thought process back then was that since we were going to concentrate on a single type of lessee, and be somewhat selective in the type of equipment we were going to lease, we could remove a lot of the barriers that existed in our industry and simplify the process beyond what anyone could have imagined. Some of the innovations that we introduced to our prospective customer base included:
1. We did away with credit applications. Our belief was that if we could establish that we were dealing with a legitimate acute care hospital with an established track record in business – then we didn’t need to require our customers to fill out a form to prove to us that they “qualified.”
2. We eliminated doing credit checks, and we established an automatic credit approval policy for acute care hospitals. This allowed us the ability to provide unqualified lease approvals in a matter of minutes, rather than a matter of days.
3. We substantially trimmed our lease agreement by eliminating many redundant clauses, making our agreement language more user friendly. We also simplified the remaining clauses of the document.
4. We eliminated many of the ancillary back up documents that were (and continue to be) required as part of a traditional lease documentation package.
5. We instituted “purchase order only” leases, with no lease agreement to sign - for certain types of equipment.
6. We integrated the concept of short term rental with our leasing programs and introduced the Equity Rental program which offers our customers the ability to obtain some types of new equipment with the ease and flexibility of rental, combined with the ability to allow our customers to absolutely control their rental dollars by gaining equity credits toward the eventual purchase of the equipment.
We have always felt that we have created a winning strategy and over the years we gained significant acceptance and received numerous accolades for our Creativity, Simplicity and Responsiveness. On many occasions we have had new customers ask incredulously - “Is this is really all I have to sign?” We even had the CEO of a major US hospital reach out to us and said, “if your story ever gets out no one should ever want to lease equipment from anyone else except Med One.”
From the beginning days of Med One, and for most of our history, our emphasis has been placed on working with the manufacturers who produce and sell moveable medical equipment to acute care hospitals. Our sales efforts were focused directly upon serving, supporting, training, and helping an impressive group of equipment vendors who saw the value of using Med One to help their customers acquire their equipment. Virtually all our sales efforts have been directed toward our equipment vendors and convincing that segment of the market to enhance and increase their sales through using what we have to offer.
This strategic business plan has served us well for 26 years. We have been able to work with some of the world’s most impressive equipment manufacturers. We have seen our lease business flourish and grow to impressive heights. However, always in the back of our minds was the thought that we needed to develop the capability to tell our story directly to the market, so that we didn’t have to rely upon others to promote our business.
In recent years, we have developed the capability to “speak directly” to our market in various other segments of our business. Our folks in the equipment sales division have always “told their own story to the market.” We have seen this division take hold and progress since its inception. Because of this experience we are confident in being able to look to our equipment sales division to develop as a major contributor to Med One’s total top line revenue in the future.
Our rental division definitely “tells their own story to the market.” In the areas where our distribution centers are located, we have sales reps, drivers, customer service reps, and many others who have direct and almost daily contact with our customers and prospective customers. At customer locations, our trucks are regularly coming and going to deliver or pick up equipment. Our sales reps and customer service reps are in the hospitals to assess needs, as well as our service, and to ensure that our rental relationships are strong and long lasting."For the first time ever, we have embarked upon the course of taking our leasing story directly to the market."
Our leasing business, however, has largely remained a vendor focused service business. Opportunities to “tell our own story” have been limited at best. That being said, leasing is the preponderance of what we do, and we have been very successful operating in the “world of vendors.” Our leasing division is our most seasoned and mature entity, it contributes the bulk of our revenue and profitability. We have lease relationships with over 2,500 different hospitals – our customer base comprises 40% of the hospitals in the United States. Still, we often only have a single transaction with any given hospital, and we have relied upon someone else’s (Vendor) sales people to bring the opportunities to us.
In 2016 (25 years after starting the business) we launched a major effort to fortify our business and sales strategy for Med One Capital Funding – our leasing entity. For the first time ever, we have embarked upon the course of taking our leasing story directly to the market. Our efforts are predictably modest to begin with. We have established well-seasoned and qualified professionals to represent our interests in key areas of the country where we have a strong concentration of existing business, and significant opportunity to attract new leasing customers.
Originally from Eastern Pennsylvania, Brian Nappi lives in the northern part of the San Diego area. Brian works with present customers and prospective customers throughout California. He has traveled all over the world and has worked in many different industries including capital equipment sales in the hospital space. He enjoys riding dirt bikes, beach volleyball, skiing, and many other outdoor activities.
Al Mugno is located in Long Island, New York, and covers the Northeast United States for Med One. He has an extensive background of selling capital equipment into hospitals in New York, and values greatly the relationships he has developed over the years during his time at Alaris, and CareFusion (now Becton Dickenson). Al’s family is his #1 priority and much of his non-work time is spent with his sons who play hockey and baseball at a high level.
Amy Vizanko headquarters in Jacksonville, Florida, and covers the Southeast United States. Originally from Minnesota, Amy spent several years representing CareFusion (BD) in North Florida and found great success connecting with customers based on her biomedical engineering background. Her past customer relationships developed at CareFusion are paving the way for early success as she is now reconnecting with many people in Florida, Georgia, and South Carolina.
We have very high expectations that these folks will become “trailblazers” for Med One and help us to establish a strong capability to better control our own destiny and chart our own course into the future. We are extremely proud of the record that we have established in the leasing industry and the outstanding lease portfolio we have created over the past 27 years. As I stated above, we have leased equipment directly to over 40% of the hospitals in the US. We are among the largest independent leasing companies in the United States. We believe that we have been able to create a unique and attractive offering of leasing products and programs that provide real and long-term benefits for our customers. We are confident that as we concentrate on telling our story more proactively and more directly to our prospective customers, our company will grow and reach heights that we never would have dreamed of.
This is a change that has been a long time coming to pass. As a management group we have debated and discussed this issue for several years. As a company, we are committed to this change and we believe that it will have a dramatic impact in the years to come.
I recently read an article that discussed some of the worlds most recognized and successful companies and analyzed fundamental strategy changes they have had to make. The take away from the article was this:
“The lesson is that changes in business strategies were not incidental footnotes in the histories of these businesses. Rather, in each case, the changes that were made unlocked new dimensions of revenue and profitability – heights that would never have been reached by staying the course. Making such changes requires both the foresight to know that existing strategies are ill-suited for future opportunities and the discipline to enact fundamental shifts in corporate focus.”
I am not of a mind to say that our existing strategy has been ill-suited for future opportunities, nor that we must make fundamental changes to save our company. But this new initiative feels right to us. We are thrilled with the quality
of the people we’ve been able to attract to help us lead this change. We are hopeful that as a company we can execute this strategy in a way that will benefit Med One and its present and future employees in ways that today we
can’t even imagine.