It seems there’s gold in surgical steel

SHARE It seems there’s gold in surgical steel

By Sarah Klein

For Sun-Times Media

Ever wonder where old ambulances, X-ray machines and hospital beds go after they’ve been replaced by newer and shinier models? Maybe you haven’t, but you should have, if only to beat BidMed to the punch.

The tech startup launched an online marketplace last year — think eBay with weight scales and ultrasound devices — to connect developing-world doctors and hospitals who are desperate for functioning equipment with counterparts in the U.S. who are willing to unload what they consider out-of-date gear at fire-sale prices.

So far the formula seems to be working for BidMed, which is closing in on $1.5 million in annual sales and is already turning a profit, according to co-founder Joanne Frogge.

The castoff machines are hot commodities in Africa, the Middle East and India, where during a recent visit Frogge was taken aback to see stretchers fashioned out of sheets of metal and wheelchairs made of lawn chairs and tires.

Ventilators, defibrillators and surgical instruments are in high demand in India, as are hospital beds and anesthesia machines. Even equipment that is a decade old “is considered state of the art,” she says.

BidMed takes a commission of 10 percent to 20 percent on each sale, a substantial amount on big-ticket items like operating room tables and ultrasound equipment, which can fetch up to $20,000.

BidMed also makes money buying equipment directly from hospitals, which it then stores in a 7,500-square-foot warehouse in Addison until it ships to customers in the U.S. and overseas. A lot of hospital administrators simply want to get rid of it. “They say, ‘Overnight me a check and clean it out,’” she says.

Launched with $300,000 raised from friends, family and two angel investors, BidMed was nurtured through its first 18 months at tech incubator Catapult Chicago. This week the company moves into its own office in the West Loop.

Frogge and co-founder Patrick Kelly see nothing but growth ahead even with competition from companies like Melrose Park-based Centurion Service Group, which specializes in auctions of new and used medical equipment, and Fort Lauderdale, Fla.-based, another online seller of hospital equipment and supplies.

Frogge says this is because the industry is still highly fragmented. Mom-and-pop shops that cater to local markets are more the norm. Fly-by-night operators that take equipment from hospitals on consignment and then “forget” to send a hospital a check or send a check that bounces are also a problem — so much so that there are black lists of vendors to avoid.

“We will pay [the hospitals] in full before we remove the equipment,” Frogge says. It also helps that the company got a seal of approval of sorts from Charlotte, N.C.-based Premier, which vets suppliers seeking to work with the nation’s large and small hospital systems. That’s helped to open doors with several large hospital chains, Frogge says.

Presence Health, which operates 12 hospitals in the Chicago area and recently sold more than 700 pieces of equipment to BidMed, chose the company because it had well-thought-out plan for removing the used equipment and it seemed dependable, says Kelly Richardson, system director for biomedical engineering for Presence. “We wanted someone we could trust,” she says. 

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