Sit down and talk with Scott Ray and Ryan Dienst about their business, Global Medical Imaging (GMI), and you will inevitably hear about their mission – to help change the health care system in America. Before you roll your eyes and scoff at their lofty goal, realize that these are educated, passionate businessmen. And, believe it or not, they have a very legitimate plan.
GMI is the two and a half year-old brainchild of Ray. After spending more than a decade in the business of selling ultrasound equipment for General Electric, then working in a similar position for another large company, he realized there was an obvious need for quality ultrasound systems at a more competitive price. With that in mind, he crafted his business to be exactly what his customers need in this day and age of overwhelmingly expensive medical costs.
“Our focus is to do everything the manufacturer can do except manufacture,” Ray says. What he means is that, by obtaining demo and slightly used ultrasound equipment, GMI is able to recondition the systems at their Charlotte headquarters and sell them to doctors, hospitals and clinics nationwide for 20 to 40 percent less than the original equipment manufacturers (OEMs).
By saving healthcare providers such a large sum of money, and by having a specialized inventory to match every budget, GMI truly can have a positive economic impact on the state of healthcare in this country. And that is exactly what they intend to do.
When Ray worked for GE, he realized the industry he had come to know so well was becoming less about the people and more about the profits. He watched as the company bought out many smaller ultrasound manufacturers right before Siemens and Philips did the same thing. Although consolidation was not uncommon in corporate America, Ray had become increasingly uncomfortable with it. He realized that the less personal the OEMs were getting, the greater the need was for personalized service. That is where GMI comes in.
“That’s the opportunity that’s been created for us,” Ray explains of the need for his business. “To fill in that vacuum they’ve created and be more responsive, faster, more cost competitive. Ultimately, to just provide a higher level of customer support and service that isn’t currently in this industry.”
This includes stocking systems from all manufacturers in their warehouse, allowing them the ability to ship out a product as early as the day after it’s ordered, and being able to recommend the best system for a customer’s needs no matter which manufacturer made it.
While GMI’s business is still in the early stages, it is clear that they are on to something. Take a look at the revenues alone: they’ve doubled every year since its inception. Partner Ryan Dienst, who focuses on managing the business while Ray focuses on sales, talks numbers. GMI did about $2.4 million in revenue in 2002, which increased to $4.5 million in 2003, and he estimates that this year they will do over $8 million in revenue. He also mentions the 2005 goal for the company is to do over $15 million, doubling the business yet again.
A Team Effort
That is a lot of revenue for what seems to be, in essence, a few big cameras. Ultrasounds are pretty standard equipment and even if you haven’t graduated from med school, you probably know what they do. However, the inner workings of these machines are fairly complex and best left to the experts. Both Ray and Dienst stress that while they specialize in obtaining pre-owned or leased equipment, they are not in the market to simply sell used machines.
This becomes obvious while walking through the warehouse of the Griffith Road business where technicians with years of experience rebuild and reconfigure complex machinery to like-new condition. GMI’s in-house technicians also refurbish (repaint and re-package) the systems so they appear brand new when they are delivered to their customers.
Ray and Dienst proudly speak of a fairly recent addition to the GMI team – their field service organization. Led by Doug Brown and his 30 years of ultrasound service experience with different OEMs, GMI has also added three more field service engineers with a combined 45 years of field ultrasound experience. It is this field service organization, combined with an extensive network of third party technicians, that provides warranty and service contract support for every system that GMI sells throughout the country.
This service department is key to how this business operating successfully and profitably. Ray says it boils down to the fact that the public has essentially been misled by the OEMs.
“Depending on the application, the fact that the machine has been used may be irrelevant,” he explains. “If it’s the same exact feature set and revision level as a brand new system, there’s really no difference except the high cost of brand new equipment.”
Outdated machines fall into the same category. For obvious business and technological purposes, manufacturers are always re-inventing or upgrading their systems. However, Ray points out that the actual life span of an ultrasound system is “indefinite.”
“Manufacturers will typically end the life of a product after 10 years, or two years after they’ve made the last one,” according to Ray. This renders the product obsolete. He adds that the systems become obsolete because manufactures choose not to service them, not because they are beyond servicing. Enter, once again, GMI.
“We have a very well managed parts inventory and superior service levels to maintain our products,” explains Ray. “We also manage how many service contracts we have and on what, so we maintain the right stock level of parts.”
Having access to a wide range of older, yet still reliable products is another way America’s health care system will benefit from this company. They have the inventory to sell ultrasound machines to a facility on any budget for any need.
“We carry the market leaders, but we need to have a product for all price points,” says Ray of why the company works so well. “So if you have $100,000 to spend, we have a great brand new system. If you only have $10,000 to spend, but you have the same needs, we can go back in generations. This allows a customer to find a system to meet their diagnostic needs at a less expensive price.”
“Everyone doesn’t need a state-of-the-art system,” Dienst adds. “The public health clinic that’s doing free scanning for the county doesn’t need a $100,000 ultrasound system. They need a very good, very reliable black and white system that does basic scanning. We have the ability to match up their economic and diagnostic needs with a product that fits both.”
Only the Best
With these added areas of concentration, it’s a safe bet that GMI’s salespeople are an absolutely amazing team. “Our people need to know everybody’s A and B product,” Ray emphasizes. He points out that sales representatives for the OEMs only have to know their own high-end and low-end products. He continues, “Our sales people have to know each manufacturer’s A and B products and they also have to know everybody’s A and B product from the last generation and the generation before that.”
He goes on to explain that their company works by having 20 or 30 systems ‰ which are their “core products.” This allows that personalization of the purchase, at the same time allowing the company to sell to every budget. Says Ray emphatically, “That is challenging. Can you imagine the breadth of their knowledge?”
Knowledge is certainly a large part of it, especially since there is more to ultrasounds than the standard pregnancy uses at the ob/gyn (albeit a large part of it). GMI also markets their product to cardiologists, urologists and radiologists who often put ultrasound machines to work in their practices and in studies. And while you may consider the family cardiologist to be an expert, but not necessarily a good businessman, he can make sound decisions with a refurbished GMI.
Ray explains that their company helps the often outrageously pricey “business” of health care make sense. Because the doctors or hospitals are reimbursed a flat rate for their services, regardless of the price of their equipment, it seems only natural that the same doctors would purchase a same-as-new machine for a fraction of the OEM’s price.
In addition to saving healthcare providers money, GMI stands behind their product. Unlike other used machines, their refurbished units come with a minimum one-year warranty as well as the option of an extended service contract.
“That’s the big difference,” Ray boasts. “Our competition will sell the unit as-is or give you a 30-day warranty if they have to. We are completely the other way from a buyer’s usual experience.”
Lofty and Impressive Goals
For Ray and Dienst, they are just as concerned about satisfying their customers as about profits. However, they also take satisfaction in doing their part for the medical system in America.
These two are constantly setting goals and are proud to say their business is simply the best when it comes to selling, servicing and refurbishing ultrasound machines. In fact, one of their future goals is to expand their already extensive service department. After being in the industry for so many years, Ray knows what the competition is doing, and he takes pride in having put together an unmatched operation that far surpasses the impersonality of the OEMs and the shoddy follow-through of the stereotypical used equipment sales firms.
Amazingly, while Ray, Dienst and their employees may be benefiting from the booming business, it appears that the implications are much broader – that everyone in the country is better off as well.
Dienst explains it best, “In the overall healthcare environment where costs keep rising, reimbursements are falling, and insurance costs are going through the roof, we have a way for doctors, hospitals or clinics to have revenue-producing equipment at a lower price.” He adds, “It’s the same quality, which helps improve the overall economics of health care in general,” and sums up, “So that’s, in essence, our impact on the healthcare industry in general.” And at a time when many people hesitate to trust even their doctor, it’s safe to say Global Medical Imaging is helping to renew confidence in our ability to service the demands of America’s healthcare system.