LIQUIDATING EQUIPMENT? All about Tag Sales September MRG Newsletter

In recent newsletters we have been discussing the various methods facilities can liquidate the remaining assets of a building that has either closed, merged, or been replaced. Another method of selling all those pieces of equipment is conducting a tag sale.

A tag sale is selling equipment by putting a price on each item. A sale can be open to the public, internal employees, certain set of invited buyers, or a combination of all three. Healthcare facilities have administered tag sales internally and have also hired businesses to handle the service.

There are a few advantages to liquidating equipment via tag sale. First is control over the price. By setting the price, hospitals can somewhat determine what equipment sells for. Another advantage is the goodwill hospitals can achieve with their employees by giving them access to items at a reduced cost. In other forms of sales, employees would have to bid or pay market value. In this setting, the facility can determine if someone gets a discounted price. Potential for higher returns is another advantage of a tag sale. If the market conditions are good and the pricing is set high enough, a hospital can receive top dollar for their liquidation.

There are disadvantages to a tag sale. One is the time it takes to administer such a sale. Auctions, third party removals take much less time than tag sales. Extended time in a closed building leads to higher utilities, more employee hours away from the main campus, etc. Also, tag sales can leave the seller with a lot of unsold equipment. Auctions, other forms of removal can leave empty buildings. Tag Sales need to have a plan for unsold equipment, whether it is a charity or scrap metal company, or some other business.

There are many ways to liquidate the remaining equipment in a closed building. Auctions, tag sales are the leading methods, but both have many advantages and disadvantages. What works best for a certain facility depends on time available and other factors.

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General Asset Ledgers – Size Does Matter

When initial conversations take place with a client that is interested in conducting a full house audit of capital assets, reconciling their general asset ledger is usually one of the goals they would like to achieve from the audit.

Many healthcare organizations fail to clean their asset ledgers regularly. Whether an audit is in the plans one should consider ongoing care of the hospitals asset ledger. We all take baths to clean the dirt that accumulates over time. The same can be said of data that is added to an asset ledger on a regular basis.

Past inventory projects have uncovered that a typical asset ledger for an average size hospital (approximately 250 beds) with a capital threshold of $1000-$2000 or higher can expect to see an average of 5,000-7,000 physical assets located on the property grounds. This same size hospital that fails to conduct a physical audit and reconciliation of capital assets for more than 10 years can have over 10,000 assets outlined on the asset ledger.

Following are some bathing thoughts for scrubbing your ledger:

• Is there a policy in place for add and deletes to the asset ledger?
• Who is responsible for managing the process of adding and deleting assets from the ledger?
• When was the last time you went through the ledger to clean out discrepancies that can be accounted for without conducting a physical audit?
• Should property improvements be a part of your asset ledger?
• Should aggregated purchases be part of the asset ledger?
• Are you keeping fully depreciated assets on the ledger until they are removed from service?
• Can you sort your ledger to show demographics about each asset i.e. individual fields for make, model, description, SN etc. (putting more than one of these identifiers in one field minimizes the ability to scrub data and reconcile)
• Are there assets on your ledger that you can verify have been removed from service and are no longer on the property?

Hospitals have different policies and procedures on how they to maintain the asset ledger but the common thread that needs to be communicated here is that all hospitals should continually evaluate what is on their ledger and should it be on there.

Retail, restaurant, & banking…similar to the healthcare industry? Perhaps more than we thought

                  

As the healthcare industry continues to change on a daily basis and consumers become more educated and savvy, leaders are realizing that the industry must now develop similar business plans as the retail, restaurant, and financial markets have done for years. As technology improves and people opt for more conveniences, healthcare leaders are now trying to follow the business examples set from retail, hospitality, financial institutions when it comes to supply & demand.

Hospitality & Healthcare:
Similar to the hotel/lodging industry, hospitals and medical facilities are now taking more of an interest in providing the best experience for their patients. Now more than ever, surveys are given after appointments in doctor’s offices and hospitals for feedback on how to improve the service, staff responsiveness, communication, & cleanliness of the facility. In terms of aesthetics, hospitals and doctor’s offices have gone from the stark, sterile and institutional look of the past to create a warm and comfortable atmosphere in the new construction of their buildings.

Retail & Healthcare:
Over the years, the healthcare industry has intertwined with retail to provide consumers with more convenient locations. UrgiCare centers and clinics, often referred to as “ATMs for healthcare” have popped up in drugstores and malls to provide quick, affordable services.

Banking & Healthcare:
Much like many Americans rely on online & mobile banking, consumers now prefer and expect easy access to their online medical records. Rather than waiting weeks for the results of a cholesterol test, patients can now have access to their test results online. In addition, healthcare institutions are also providing healthy lifestyle tips and comparable medical information regarding their patient’s health.

As we become a more consumer-driven society, the healthcare industry will continue to develop and make the necessary changes to follow suit with other industries.

Back to school – always a retail boom; even more since healthcare services now in retail stores

The days are growing shorter and the bright yellow school busses are again tying up morning commutes.  With school back in session, retailers were handed a healthy boost in August when shoppers hit the stores for necessary school supplies.  Could we see an even larger increase in retail stores’ bottom line since so many pharmacies and specialty stores are now offering healthcare-related services?

For a family on the go, the services of the Minute Clinic in CVS/pharmacy or Walgreen’s Take Care Clinic offer the ideal solution for Americans on a tight schedule.  If you are shopping for school supplies already, why not fit in a flu shot while at the drug store?  The Minute Clinic offers families a convenient and affordable “Back to School Vaccination Station” for sports physicals and other necessary immunizations, available evenings and weekends without an appointment.

With these services now available in neighborhood pharmacies, families have a better choice in how, when, and where they receive their health care.  Over the next few years, we will see some of America’s most prominent hospitals expanding into suburban malls and shopping centers, and for good reason:  the number of patients visiting retail clinics skyrocketed from 1.48 million in 2006 to 5.97 million in 2009.  As the trend continues to grow, smart retailers will continue to pay attention to the lifestyles and needs of busy consumers. 

For more information on how retail is expanding services to include healthcare, access the link below:

http://www.beckersasc.com/news-analysis/5-lessons-healthcare-can-learn-from-other-industries.html