Ken Nagy, CFA
AUXILIO Stands Alone
AUXILIO (AUXO) is the only health care exclusive, vendor neutral Managed Print Services (MPS) firm that provides document production management strategies, services and solutions to hospitals throughout the United States. AUXILIO’s continuous workflow improvement solutions enable hospitals and health systems to reduce costs and waste in their operational and clinical functions by managing the process of document production between printing and copying equipment and technology. AUXILIO should see a tail wind in its top and bottom-line growth given the Health Information Technology federal mandates; the fact that hospitals are seeking efficiencies to reduce the cost of health care to the public, and because of increasing reductions in Medicare reimbursements. A recent strategic relationship with Sodexo, a leading provider of integrated facilities management services in North America, has been renewed and should nearly double the sales force
Backdrop of growth in MPS
Hospitals are paper intensive businesses. A typical 525-bed hospital will create roughly 35 million documents each year and expend about $1.5 million to print, copy, fax and scan each piece. This cost results in a high proportion of their annual budgets spent on printing and document handling — an estimated nine percent, according to the National Health Service in 2010. The inefficiencies are tremendous in the print environment as there is routinely a fragmented array of printers, scanners and multi-function devices; no management or centralized cost center; an over-burdened staff, and inefficient workflow processes that adversely affect the quality of health care provided to patients.
Enter Managed Print Services (MPS). Hospital management teams, (CEOs, CFOs, and CIOs) across America are seeking best practices and change management techniques to reduce their carbon footprint and to be more accountable and transparent to their boards, stakeholders and the public They are turning to MPS as one of the few remaining areas where they can capture considerable savings (as much as 20 to 30 percent) and efficiencies to improve workflow processes, as well as gain employee productivity and satisfaction, all while reducing waste and making the transition to electronic health records less costly and painful. According to estimates by Photizo Group, the growth of MPS by 2012 will have a carbon reduction impact equivalent to taking 304,000 cars off the road and saving enough energy to power 230,000 homes for a year.
Typical Customer Case Study
Let’s look at a hospital with three campuses that has approximately 1,000 beds and averages five million documents per month at an average cost of $0.045 per document. (This assumes a 60% printer/fax 40% copier split) The problem before the assessment is that no one owns the process. It is a bad mix of dysfunction and under-utilized technology. Through a combination eliminating multiple vendor invoices and bringing the system together in a centralized managed process, AUXILIO can manage entire process for $0.035 per document which represents a 20% discount. This translates to savings to the hospital of $43,000 per month or $2.6 million over the life of the contract. (Assumes a three-five year contract) That savings could improve if the firm is able to reduce the total documents produced per month. The revenue for AUXILIO in this case is projected at $170,000 per month. On a margin basis, most projects take several months to be profitable before settling in at around 20%.
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