Avid Medical: Made to Order - Health Executive - Red Coat Publishing - Inside Healthcare

When someone is an avid painter or an avid sports fan, there is an implied level of enthusiasm, knowledge, and dedication to their passion. That is why Avid Medical is such a perfect name for this Virginia-based player in the custom procedure tray (CPT) market. Although the company is relatively young, its staff is among the most experienced in the industry.

Michael Sahady, chairman and CEO, Rick Setian, President and COO, and CFO Scott Ramer

“We are a newer company, but we are an extension of an old company,” said Michael Sahady, founder, chairman of the board, and CEO. “When customers and manufacturers deal with us, they are dealing with people who really know the business.”

Avid Medical began operations in 1999, but this was no rookie start up by industry novices. Prior to starting Avid, Sahady founded MedSurg Industries, the first company that offered CPT production. Rick Setian, president and COO, also has years of experience in healthcare earned with companies like The Kendall Company and Boundary HealthCare.

With two experienced and respected leaders at the top, the company was able to recruit experienced industry professionals at all levels of the company, from corporate to sales. One of these is CFO Scott Ramer, who Sahady credits as one of the individuals behind the company’s financial success. In addition to its talented leadership and support staff, Avid was able to leverage relationships previously earned in healthcare to open doors at hospitals and providers across the country.

As for the product, CPTs have become a vital part of ORs for myriad reasons. Trays take up less space and allow for the consolidation of purchase orders. Items required for a surgical procedure are delivered in one bundle and in specific sequence, rather than having staff waste time unwrapping and sorting dozens of items, which can be life threatening in emergencies. This also eliminates the waste associated with packaging individual devices. Because of the time saved in preparing for procedures, ORs can increase the number of surgeries performed per day.

“You can effectively do 25% to 30% more procedures annually at the same overhead cost, which generates revenue,” said Sahady. “It improves throughput from the standpoint of taking a patient into the operating room and performing a procedure in less time.”

What sets Avid apart from its competitors in the field is something it calls TruCustom. That trademarked name refers to the choice offered to the end user of the CPT: the OR surgeon. Avid assembles and distributes custom trays, but unlike many of its competitors, it doesn’t manufacture the individual devices that end up in the trays. This allowed Avid to create relationships with leading manufacturers like Kimberly Clark, Covidien, and 3M, as well as distributors like Owens & Minor and McKesson.

The advantage to Avid’s partners is clear: when they deal with Avid, they know they don’t have to look over their shoulder to see if Avid is getting ready to copy their product line. This allows hospitals to custom order trays with branded products at competitive prices because Avid’s purchasing programs give the company favorable acquisition costs, a savings that is passed on to its clients. It’s a win-win-win situation for Avid, its partners, and its customers.

Avid Medical: Made to Order - Health Executive - Red Coat Publishing

“Our sales reps and our manufacturer’s sales reps begin to act as surrogate sales forces of each other. If we have success with them, they will have success with us,” Setian said. “We can generate leads together, and instead of one sales force, you now have ultiple forces.”

Custom goals
After reaching its goals of $50 million and $100 million, Avid now has its sights firmly set on a goal of 10% marketshare, or roughly $200 million. The company recently took some internal steps to help set the stage for future growth.

One issue the company faces relates to facility needs. Although the company has a nationwide sales force, it has only one physical location for assembly, in Toano, Va. Avid is currently finishing site work on an addition of 91,000 square feet, more than doubling the size of its facility. This will help improve efficiency and drive costs out of the assembly process.

“You can’t automate the assembly of a CPT because it’s a one-time tray with different devices,” Sahady said. “Some may have 25 products while others may have 85. So we are trying to automate the movement of material to increase throughput.”

With the introduction of robotic innovations in surgery, Avid has worked on the delivery of materials for those types of procedures to the OR. At the same time, as the population ages, Avid knows certain procedures will be more common, so it also offers a line of more standardized trays.

Avid has invested in software solutions to improve its internal functions as well as its distribution system. The company has a single system for resource planning, covering everything from accounts receivable to inventory and payables. With its distribution network, which span across hundreds of sites around the country, Avid works closely with its partners to monitor inventory and keep its customers well stocked with these critical supplies.

“By dealing with all of our distribution partners electronically, we can obtain information about supply at their inventory level. That allows us to schedule production accordingly to ensure we always have products there when the distributors need it for the hospital,” said Ramer. “We can build in lead times for places that are further away and account for it in our production cycle.”

With a reputation for accurate and timely service measured at a near 100% success rate, Avid earned its way into a leading role in the acute care, surgery center, government, and organ/tissue procurement markets. With $200 million in revenue within reach, its experienced leadership and staff is raising the standard of excellence in the CPT marketplace.

“We provide our customers with products that can improve their ability to save lives and money,” said Sahady. “That’s the Avid way.”

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