Matt Werder was poised to spend several million dollars to replace IV fluid pumps in patient rooms throughout Hennepin County Medical Center. But he was hitting a wall trying to recoup some cash from the old ones, which still worked but lacked updated features.
One manufacturer claimed the more than 400 IV pumps had no value, and another offered a few dollars apiece.
So Werder, HCMC’s director of supply chain management, put in a call to Miga Solutions, a Plymouth-based company that has developed a Kelley Blue Book of sorts for medical equipment. Miga valued the pumps at $180,000.
“That data was key,” Werder said. “We renegotiated with the manufacturer and were able to realize the full trade-in value.”
Unlike the consumer world, where websites, online auctions and consignment shops can help sellers determine the market value of their goods, hospitals don’t have such easy and reliable sources for pricing on used MRIs, CT scanners and other equipment that originally cost millions of dollars.
Miga, with its proprietary pricing information on more than 15,000 types of medical equipment, is one of the nation’s few resources. The privately owned company is gearing for high double-digit growth this year, as health reform efforts put pressure on hospitals to keep costs down while improving patient care.
“This is the new economics of health care,” said Peter Robson, Miga’s CEO. “We’re all about wasted money.”
The company’s name is an acronym for “make it go away.” Formed in 2004, it initially focused on helping hospitals resell, recycle or donate outdated or unwanted equipment. It has since expanded its services to help hospitals find cost savings throughout the equipment’s entire life cycle, including analyzing service contracts that can cost into the six figures.
While hospital staff typically put most of its research and energy into buying a new MRI machine or the latest cancer-fighting tool, as much as 75 percent of annual equipment-related spending comes after the purchase.
“Capital equipment is the biggest chunk of untapped savings opportunities for hospitals,” said Robson, who said the nation’s hospitals waste an estimated $10 billion every year.
With a database of 50,000 global sources, Miga promises real-time pricing information that most suppliers don’t share with hospitals. Hospitals pay a subscription price to tap into the Web-based suite of tools and services, or can hire Miga to help with more hands-on consulting.
Many hospitals “miss an opportunity to save because they don’t have the tools to identify it,” said Robson, a self-described “database, marketing guy,” who helped develop a data-driven loyalty program at Dayton’s in the 1990s.
“That’s money that can be redirected to patient care.”
Miga and its staff of 17 have worked with all of the metropolitan area’s major hospital systems and a few clinics, including Allina Health, Fairview Health Systems and Suburban Radiology. About two-thirds of its customers do business across the Upper Midwest, and the company is making a concerted nationwide push.
In the company’s offices in Plymouth, antique wooden wheelchairs are positioned around a large wooden conference table, which Miga purchased for a song from a hospital. An attached warehouse contains medical equipment that is on consignment for clients.
Among Miga’s success stories is an unnamed clinic whose X-ray system stopped working, forcing patients to go elsewhere. Miga located a quality used X-ray system another hospital was selling, and it was installed and working within nine days. It saved the clinic $75,000 over a new system, Robson said.
In another case, a hospital was considering buying new heart ultrasound machines for $180,000 to make them compatible with more sophisticated applications. Miga found a commercial software patch that worked with the existing ultrasound equipment; the software cost only $5,000.
“Want to know why health care is so expensive?” Robson said. “Here’s one reason: Only buy what you need.”
HCMC’s Werder said Miga has helped the hospital be “good financial stewards” by helping to validate that it is using resources wisely.
It has turned to Miga to locate surgical stretchers after the original manufacturer quit making them, and to evaluate quotes on both new and used equipment, including a fleet of new anesthesia machines it bought last year.
The hospital also has hired Miga to evaluate service agreements, a key focus of potential savings, said HCMC’s Werder.
“You don’t want to have an MRI machine down when you’re a Level One trauma center,” he said. “You’ll pretty much pay any price to keep that piece of equipment up and running. But, do you really need it?”