By Jenny Lower
Recently appointed PartsSource president and CEO Philip Settimi, MD, comes to the third-party medical device parts supplier with a rich background in medicine, biomedical engineering, and OEMs. (His first job was working for GE Healthcare.) But his latest role combines all three. For Settimi, it’s about scale, impact, and giving his customers the Amazon experience.
24×7: How did you decide on a career in healthcare?
Settimi: I grew up in a family of business people. I have a father who managed industrial businesses and a mother who was in public health. I grew up with a real passion for health and improving healthcare, and also scientific technology. I was an undergraduate economics major, but with this real passion for health and healthcare. That got expressed later on in medicine and biomedical engineering. For me, it was really about following passion.
24×7: Why did you opt to pursue a business path?
Settimi: I thought about it really from the standpoint of impact—how do you create scaled impact in healthcare? I loved seeing patients in the hospital. But I could see, even during medical school, that you might see 12 or 13 patients a day. I would take a step back each night and say, “What would it take to see 12,000 or 13,000 patients a day, or 12 million or 13 million patients a day?” Ultimately, it was about putting a passion for healthcare together with a deep background in science and technology, and focusing on the impact created by the healthcare side and the scale created from the technology side. For me, that was a vehicle to impact millions of patients every day.
24×7: What brought you to PartsSource?
Settimi: When I think about improving healthcare, I first think about it from the standpoint of efficiency, efficacy, and quality. Next, ensuring you’re in a technology-driven solution environment. And that’s absolutely what PartsSource is. We offer a technology platform for medical device repair parts procurement and workflow management. PartsSource evolved as a third-party vehicle to acquire those parts and ultimately reduce the reliance on the OEM. What we provide is not just a solution to manage costs in a better way, but to also manage that work associated with acquiring parts and validating suppliers, ultimately getting people back to work on diagnosing and repairing equipment. We serve over 3,000 hospital customers today in the US. We simultaneously manage over 3,500 suppliers of medical device repair parts. We do all this because we’ve got a highly efficient, web-based platform for both the procurement of parts and the work attached to it.
24×7: You have an MD and a masters in biomedical engineering from the University of Michigan. You’ve also worked for an OEM. How does this background influence your business practices and decisions?
Settimi: It’s about understanding the complex workflow requirements of these institutions, specifically the hospital and provider side. Experience in each of these realms has been most helpful in understanding unique quality requirements. A hospital is a highly complex ecosystem. And the symphony of work that goes on there every day is across multiple departments and multiple levels of individuals. Seeing these things from the inside out is critical if you’re building solutions for the hospital environment. We really understand the concept of being a vendor/partner and a trusted advisor because of the gravity and acuity of what they do every day. It’s about speaking the right language. Having lived in all of those worlds and being able to work across the diverse personalities and diverse functions of a hospital has been really valuable.
24×7: What are your goals for PartsSource in your new role?
Settimi: First and foremost, growing awareness of a really great solution for clinical engineering around the country. We work with some of the largest and most prestigious facilities around the country. Those institutions have realized how powerful our procurement technology is, and it’s driving most or all of their clinical engineering workflow. The good news is that people love what we do, but the opportunity there is really about growing awareness of the solution and that impact.
Second, continuing to be very customer-centric and create value at their institutions—in productivity, in cost savings, and in reducing the burden of quality validation.
And lastly, building a great company for the employees here. We’ve got 200 terrifically dedicated team members, and every one of us wakes up every day thinking about how we can help the healthcare community. That needs to stay at the forefront of our minds.
24×7: A big part of PartsSource’s business model is ePartsFinder. Explain how it works and why it’s a useful tool.
Settimi: The company started as a vehicle to source parts in the third-party market. Eventually, we developed a software technology that we used internally, and then developed a software technology for our external customers to use. Now, we have a large proportion of our customers who order thousands of parts every day through our electronic platform. Of course, we still work over fax and telephone, and we have dedicated technical support, but we have many clients who are highly self-sufficient. We license that software platform and make it available to all our provider customers, too.
You can think of it very much like an Amazon experience. It allows you to shop across 3,500 suppliers in real time with quality validation of that supply base. We offer customers different options, depending on what their condition requests are—so a new product, a refurbished product, a tested product. We give them insight into availability and pricing. And in that system, they’re able to track all their shipments, workflow, and approvals for PM management. It’s one comprehensive system. We also have ePartsFinder mobile, which is available across all platforms—iOS, Androids, tablets, mobile devices. I can be on the floor of the hospital or in the parking lot, and have the same access and functionality.
24×7: According to your website, you regularly price parts at 10% to 75% off OEM list price. How are you able to deliver those savings?
Settimi: It’s a little bit like Amazon in that we have great purchasing power. We order thousands of parts per day, whereas many hospitals might purchase dozens of parts per day. Second, we’ve got relationships with 3,500 suppliers. We have proprietary ranking methodology inside our technology platform that ranks suppliers in real time based on the issues that matter to our customers: availability, quality, dependability, reliability, price. That ranking drives our selection to the customer, and ultimately, price is a factor that drives individual ranking. The incentive is there for suppliers to work with us to make sure they’ve got an attractive price point.
24×7: How has the company seen the parts market shift over the last several years?
Settimi: There have been three major trends. We’ve seen a much greater comfort with non-OEM or non-new OEM parts, which historically was all that was available to the market. Increasingly, as clinical engineers have purchased these parts from folks like PartsSource, who are able to vet and validate quality suppliers, that comfort has grown. As comfort has grown, our business has grown.
Second, the one-stop shop concept has become very important. How do I go to a place to meet most or all of my needs without having to shop around? Each part order could be anywhere from an hour to 4 hours, and a typical technician might be ordering a few parts per day. That’s a huge consumption of energy and time. We’ve created a one-stop shop to alleviate that huge time commitment.
The third is the movement toward electronic ordering. It’s great to have a catalogue, but the better option is to have an electronic catalogue where I can do my ordering and all of my tracking. Our system automates the tracking of core exchanges. We were able to reduce costs by $250,000 per year at a large, prestigious, academic medical center in Cleveland simply by managing that process in an automated and standard way. The digitization of this process is really critical to saving time and money.
24×7: What do you think is the most important element of a biomed’s job today? How do you think the role of biomeds will change—or should change—in the years ahead?
Settimi: The technology component of the devices we supply parts for has gone up dramatically. The number of our customers who are now reporting up through the chief information officer of a hospital has grown substantially. Standardization across all facets of clinical and non-clinical work is a trend that we see happening in the clinical engineering areas of hospitals in a much more significant way. This is really about how we can help engineers focus on what can be controlled in this complex environment. We believe we have a solution that allows engineers to turn their energy back to the organization and further train themselves on new technology, and allows them to expand their impact on the organization by reducing this non-strategic work. Our hope is that we’re back to our original goal in improving healthcare through greater efficiency, greater efficacy, and greater safety.
Jenny Lower is the associate editor for 24×7.