Management Health Solutions, a Fairfield, Conn.-based developer of business solutions announced Tuesday the acquisition of Hospital Inventories Specialists, a Tampa, Fla.-based provider of inventory management solutions and analytical services.
Combined with the company’s acquisition of mobile supply chain software developer AtPar this past May, MHS looks to double its business in the market – the second largest cost that a hospital incurs, behind labor – reaching roughly 20 percent of the nation’s hospitals at the outset.
“The acquisition of HISI is a major step for MHS," said Bill Zierolf, president and Chief Executive Officer of MHS. “We are buying an established and recognized industry player that will appreciably enhance the supply chain software and optimization services that MHS has provided to the U.S. healthcare industry. Together, we'll be developing and releasing the next generation of supply chain operations tools, Optimal Inventory Control (OPTIC) 3.0, to make managing the receipt, flow and charging of clinical supplies much more efficient.”
“The market opportunity and potential for growth is tremendous,” he added. “The majority of hospitals across the United States have yet to implement integrated point-of-use supply chain software, content management solutions and optimization best practices for tracking, managing, ordering and analyzing the flow and consumption of clinical supplies. Millions of dollars are wasted annually through overstocking, expired inventory, and last minute, overnight resupply. Our flagship product, OPTIC, addresses these needs and helps reduce cost and improve patient safety through increased visibility.”
When acquiring Lebanon, N.H.-based AtPar earlier this year, Zierolf said hospitals stand to waste 30 percent to 40 percent of their budget on overstocked or out-of-date supplies or emergency orders for understocked items. He called the situation “a $70 billion industry with little automation,” and said hospitals have to move away from manual, paper-intensive audits.
The HISI acquisition gives MHS much-needed tools for pharmacy inventory and analytics, company officials said.
“With full integration to all the leading material management information systems, our point-of-use mobile software applications provide unparalleled visibility for supply chain executives,” said Mike Ferris, MHS’ co-founder and executive vice president of operations. “Integrating software and professional services to independently serve our national client base is MHS' sole focus as a company.”
“Bringing these two companies together makes perfect sense,” added Martin C. Wein, HISI’s principal and president. “The improvement in supply chain management that MHS will bring to a greater cross-section of the U.S. healthcare industry will not just reduce overall cost but improve patient safety as well.”
With this latest deal, MHS expects to serve more than 1,000 hospitals, increase its employee base and double its inventory, currently valued at $2.5 billion. In 2008, when Zierolf joined the company, it had a client base of roughly 50 healthcare providers.