MDB expands with new finance and information systems units

Firm cultivates warmer relations with vendors

Many medical imaging companies were caught off guard by the changesthat have wracked the device purchasing process over the pastfive years. Not everyone has been bloodied by the new purchasingregime, however. The shift from a radiologist-centered model toone based on hard data and information exchange has benefitedMDB Information Network, formerly known as MD Buyline, which isaggressively entering new markets in hopes of expanding on itssuccess.

The Dallas-based company was formed in 1983 to provide equipmentbuyers with objective information for making sound capital equipmentpurchasing decisions. Its services range from providing reportsthat discuss medical technology assessment in a layperson's termsto a fax-based information clearinghouse that tells members whetherthey're getting an adequate discount from vendors on prospectivepurchases.

The fast-growing company has more than 1700 members, most ofthem hospitals or hospital chains that pay an annual membershipfee to access the company's services. Membership stood at 1200in 1993 and 1500 in 1994. Participation by multihospital chainsand group purchasing organizations (GPOs) surged in 1994 afterMDB began accepting corporate partnerships, and the firm expandedits reach to outpatient facilities this year.

MD Buyline retooled its operations in May in a corporate makeoverthat saw its name change to MDB Information Network (SCAN 4/26/95).The new name signifies MDB's desire to transfer its success tothe equipment funding and information systems fields.

As part of the restructuring, MDB formed three separate divisions:

• MDB Technology Services, which will continue as an informationresource for selecting and purchasing medical capital equipment;

• MDB Information Services, which offers consulting on informationsystems, medical records, office automation and other computer-relatedsubjects; and

• MDB Financial Network, for equipment financing and leasingconsulting.

MDB Information Services focuses on computer-based technology,such as management, financial and clinical information systems.MDB has partnered with the Andersen Consulting division of ArthurAndersen & Co., as well as with McGraw Hill's DataPro division,an information technology research firm based in Delran, NJ. Therelationship gives MDB access to the unique skill sets of Andersenand DataPro while providing those companies with an entree intothe health-care market.

MDB also found a partner to set up MDB Financial Network. Thecompany is working with the Quinlan Group of New York City toaccess its legal and financial expertise in analyzing equipmentleasing contracts. The division can analyze each leasing proposala hospital receives to determine which provides the best rates.Participation in each division is covered by a separate membershipfee.

The new corporate structure exemplifies the two-pronged strategyMDB has adopted: to aggressively expand the range of servicesprovided to its members, and to rely on joint ventures to do so,rather than reinvent the wheel with each new offering, accordingto president Larry Malcolmson.

"The big thing we had to get over was doing it all ourselves.That's what slowed us down for years, so we decided that partnershipscan work out great," Malcolmson said. "What we wantto be is an integrator of information services. We have threedivisions now and next year maybe there will be six."

Relations improve with OEMs. In addition to its expansion,MDB has cultivated warmer relations with device vendors. In MDBuyline's early years, some manufacturers adopted a confrontationalstance toward the company because the data it provided to prospectivebuyers were often used to wrest bigger discounts from vendors.

MD Buyline embarked on a campaign to improve its relationswith manufacturers in 1993. The company used its data collectionabilities to its advantage in fostering a more cooperative relationshipwith companies, Malcolmson said. MD Buyline representatives madesite visits to each major manufacturer, documenting and analyzingeach company's manufacturing processes. The firm also broughtsenior OEM executives to its Dallas headquarters and offered toserve as an information conduit between equipment users and manufacturers.

"We formally agreed to exchange information (with vendors).We put together a checklist of what (our members) wanted, andthen we gave (the OEMs) everything that they had been asking for,"Malcolmson said. "That's where a lot of the animosity went.It's still not all gone at the local sales level, but at the seniormanagement level it's been terrific."

MDB can provide OEMs with information such as their serviceratings on a region-by-region basis as judged by MDB members,as well as information on the prices OEM field offices and distributorsare quoting customers. It also offers members a hotline throughwhich MDB will help resolve serious equipment service problemsby directly contacting the chief executive of the company thatmanufactured the device.

Based on increasing requests for data from members, Malcolmsonbelieves that health-care capital equipment purchasing activityhas been perking up in the last year or so, particularly in medicalimaging.

"We are seeing quite a bit of purchasing in diagnosticimaging equipment in the last year," Malcolmson said. "Peopleare buying, not as much, but they're using information now becausethe things they are buying are such an important premium."