This story is another good example of how the Internet helps create a new business model and saves money. I call it the selective democratization of information along with decoupling products and services.
The basic premise is that commodity products, e.g., screws, anchors, etc. should not require much, if any, sales/technical support. And sales support can be very costly in medical devices. Think of a rep making mid-six figures and spending a half day in a hospital surgery suite.
For those customers that do want that support and are willing to pay for it, the device company charges list price. For everyone else, MedPassage provides a virtual market for a cut of the action. The device companies can also control which customers have access to the MedPassage marketplace. Device companies cannot see each others’ prices or transactions.
Everyone wins. The device companies sell more products, the hospitals save money, and MedPassage sells an innovative, profitable service.
Takeaway: If you are on the commercial side of a medical device business, don’t accept the status quo when it comes to distribution and sales. You can differentiate your offering with value-added or value-subtracted services.