Last month’s newsletter discussed the different ways in which a facility can liquidate assets from their property. If your facility is closing and you are looking to sell equipment, auctions are a viable option. In this newsletter we will discuss a couple of options utilized for liquidating assets – Onsite (live) Auctions & Online (timed) Auctions.
Both methods of selling offer viable options for a seller. Administrators should determine which works best for their needs and timeframe when liquidating assets. Below gives some insight on which method might be best for your facility.
Onsite (live) Auctions
• This type of sale takes place onsite, with auctioneer and buyers present at the location
• It’s important the event is properly advertised at least 30-45 days prior to auction
• Auctions can be broadcast over the web to allow buyers from all over the world to purchase equipment
• Best for liquidating assets quickly – auction usually only 1-3 days
• Buyers have a better understanding of what they are bidding on; visual site inspections are allowed before the auction begins
• Buyers are likely to purchase larger quantities of equipment – utilizing space on trucks to minimize exposure associated with freight and handling costs.
• Summary – Onsite Auctions require quality equipment to draw buyers to the site for the event. These types of auctions also require more preparation before the auction to validate the inventory of equipment being sold; properly advertise the event and staging the equipment. The seller can anticipate a much faster turn on selling and removal of sold equipment.
Online (timed) Auctions
• Takes place online only, hospitals or third parties post equipment to a web-based hosting site for the online auction
• Generally this type of sale is not advertised prior to start of the sale.
• Seller may be required to provide a digital picture of the asset prior to sale
• Typical online auctions can last anywhere from 10-17 days depending on the hosting site.
• Buyers cannot view condition of equipment other than through photos posted or specs provided to the hosting auction house.
• Sellers may want to establish reserves for the items up for sale. The auction house should be able to assist with determining the reserve
• There is high competition when conducting an online auction – buyers have the opportunity to view and compare prices/condition of multiple pieces of equipment available online from competing sellers
• Buyers must pay for shipping of equipment, sellers must assist with processing equipment for shipping and coordinating delivery with buyer
• Summary – requires minimal preparation advertising prior to auction, and seller can determine the timeframe needed to receive the highest bid. May be able to capture a larger audience online from buyers around the globe than to gather at a facility for a 1-3 day live auction. Items are sold individually, and at various timeframes, which could lengthen the timeframe for purchase and removal of equipment from the facility.
The temperatures will soon be changing which means it’s that time of year again for many hospitals – “Budget Time!”Department heads have worked to establish forecasts to provide information in developing a budget for upcoming 2013 fiscal year.When it comes to equipment needed, lists have been submitted by the departments and the hospital budget committee will begin the approval process for replacement equipment.
MRG specializes in system replacements and technology change-outs. On average clients that utilize our services see an 85%-90% net return for these types of projects. As you meet with the budget committee please let them know about our services. We would be happy to make ourselves available to meet with your team to discuss how we can assist their efforts.
Inventory & appraisal projects have been in full swing this year for Manage Resource Group, Inc., having just completed another multi-specialty physician practice in Columbus, Ohio. This project included physician offices, a sleep lab, pulmonary medical clinic, & durable medical equipment business (DME).
Utilizing MRG’s proprietary Appraise Now™ Inventory Module that captures demographics associated with each asset and MRG’s Appraise Now™ Blue Book a historical database of capital equipment that includes tens of thousands of recorded assets, manufacturers and model numbers, MRG was able to provide comprehensive deliverables accurately and efficiently to the client. This year MRG has seen an upswing of projects due to the changes in healthcare reform and reimbursements, and also a 50% increase in physician practice and offsite clinic inventories in 2012.
From acquiring independent physician practices to shutting down an underperforming service/department within a hospital, knowing the value of the medical equipment and other assets is crucial to any healthcare project. Below are a few examples of when equipment appraisals are needed:
Insurance purposes: equipment may need valuation for future policies or claims.
Mergers & acquisitions: needed to properly value assets bought or sold
Liquidation & bankruptcy: necessary any time creditors are involved
Partnership separation: objective view assisting with buyout negotiations
Leasing/buy-outs: for market value at end of term
Management & planning: understanding equipment’s value prior to replacement
Finance & tax purposes: current market value against book/equipment life and depreciation values
Third party appraisers offer many benefits that can be leveraged in a project. MRG would be happy to meet with your team to answer any questions you may have regarding inventory & appraisal services.
Manage Resource Group, Inc.
APPRAISE NOW Budget Valuation Service (BVS)
Do you know the value of the equipment impacted by your replacement program?
…Manage Resource Group, Inc. can help!
Our industry experience assists on a few different levels:
• Identify fair market value on systems and equipment that will be displaced with new purchases
• FMV’s will help you negotiate higher trade-in credits and offer alternative revenue streams for equipment
• Provide a proven sales method for system replacements and change-outs should the hospital wish to sell decommissioned assets
• Help you be proactive instead of reactive by determining the best course of direction for assets that will be displaced over the upcoming year
MRG’s Service Benefits:
• Identify FMV for your system
• Increased trade-in credits
• Highest net returns in the industry
• Secure forms of payment
• No shipping / handling / storage fees
• No long-term contracts
ROI on Past Projects: Total Sale: Net Return:
1999 CT Scanner $17,000 $15,000
Olympus Endoscopy Suite $135,000 $114,750
Baxter Pump Change Out $178,000 $160,000
MRG specializes in system replacements and technology change-outs. On average clients that utilize our services see an 85 – 90% net return for these types of projects. As you meet with the budget committee please let them know about our services. We would be happy to make ourselves available to meet with your team to discuss how we can assist your efforts.
Everyone knows that the “dog days of summer” occur during the hottest and muggiest part of the season. Webster defines “dog days” as… the period between early July and early September when the hot sultry weather of summer usually occurs in the northern hemisphere.
During this time kids are dreading going back to school while parents anxiously await its return. Many folks struggle to find comfort in the shade and AC. But here in Cleveland, Ohio the dog day heat leads us into training camp for our beloved Cleveland Browns who happen to be known as “the dawgs” and we the fans look forward to another year supporting them in the infamous dawg pound. So these hot days belong to them and as diehard Browns fans we have a sense of optimism every year that comes with new players and the opportunity to forget about last year’s losses. Every year we are going to the Super Bowl.
As your ponder your own “dog days” allow optimism to play a part. If your company has dealt with pains associated with the recession and the staggering economy, now might be a good time to look forward and forget about last year’s losses. Maybe you have made adjustments to players on your team to weather the storm, but you made it through and opportunity is beginning to show itself again . The dog days of summer always give way to fall when the weather cools and the colors thrive. Your business has weathered the heat and now it’s time to show your true colors and move forward with optimism on what tomorrow holds.
Mergers and sales transactions are commonplace in the healthcare industry as demographics continue to change throughout the United States. Our last two Manage Resource Group, Inc. newsletters have discussed capital equipment transition & liquidation. The article below outlines the 4 important areas that hospital executives must consider before a hospital transition.
Administrators must also consider the costly assets inside the walls of their facility. Each asset offers value to an acquiring health system. These items may include medical, IT equipment, or general office furniture. Utilizing a 3rd party appraisal firm to determine the fair market value of capital equipment will allow for a better negotiation.