06-presentation-dan-sanchez-medline-industries

Report
Dan Sanchez
Vice President
Medcrest Textiles Division
Medline Industries, Inc.
Medline History
Textiles is our Heritage
Started almost 100 years ago as a textile company
Medline pioneered many textile innovations that
are now widely-used in healthcare today:
○ Colored scrubs, printed patient gowns, knitted sheets
Largest U.S. Provider of Healthcare
Textiles in the USA
Approximately 36% healthcare market share in the
U.S.
Over 19,800 textile customers
#1 or #2 healthcare market position in every
major category
Medline Sales History
Sales in Billions
4500
4000
3500
3000
2500
2000
1500
1000
500
0
$4
Billion in sales
6000+ employees
Number one privately held
manufacturer and distributor of
health care products in the U.S.
40+ years of consecutive growth
4th generation family leadership
1000 person dedicated sales force
Steady International Growth
Historical Development of the
Reusable Market
Until the 1950’s “Muslin”
material was the accepted
reusable surgical material
 The belief was it would stop
airborne microbes & was a
T140, 100% Cotton material
 The fabric was white in color
and produced glare which
tired the surgeons eyes –

 Medline introduced color into
the Operating Room by coloring
the gowns and drapes green to
reduce glare
Historical Development of the
Reusable Market




In 1952 William C. Beck reported
“muslin material may have been
considered an acceptable
bacteriological barrier when dry, but lost
whatever barrier capability it possessed
once it became wet”.
New fabrics were developed with a
higher thread count and chemical
finishes such as “Quarpel” were applied
However not much changed at the hospital level for about
a decade as they continued to use Muslin fabrics
At the same time disposable fabrics were being
developed and their use began to increase
Historical Development of the
Reusable Market

In the late 1980’s Reusable
Surgical Textiles finally improved
substantially
 100% polyester materials were
developed that provided a very good
barrier to fluids and strike through
 In the early 1990’s Gore was
introduced as a Liquid Proof and
Breathable fabric for surgeons gowns
 Unfortunately the barn door was left
open and the horse was gone!
Disposable Surgical Textiles

During the 70’s and 80’s the use of
disposable surgical textiles surged
higher
 The U.S. government reimbursed
hospitals for single use items on a cost
plus basis
○ Hospitals used disposables to generate
revenue
○ Reusable Surgical Textiles were not
reimbursable
 The technology for disposables was
better than the reusable's
Organisation of The Reusable
Market
As of 2004, through a survey it was
estimated disposables had captured 84%
of the market for surgical textiles in the
USA
 Disposables promised the product would
be perfect every time
 Whereas, with reusable's you would need
to have faith the laundry had processed,
inspected and repaired the textile item
appropriately

 Sadly, many laundries were not meeting
expectations
Organisation of The Reusable
Market

U.S. ~ 20 Million Surgical Procedures
Annually
 Gowns
○ ~ 85% Disposable – 15% Reusable
○ Primarily Level 3 and 4 (using AAMI
Guidelines)
 Drapes
○ ~ 85% Disposable Table Covers and Mayo
Stand Covers – 15% Reusable
○ ~ 95% Disposable Patient Drapes – 5%
Reusable
Organisation of The Reusable
Market
Canada ~ 2 Million Surgical Procedures
Annually
 Gowns

 60% Disposable – 40% Reusable
 Reusable's are ~ 80% Level 4
 Balance is a mix of Level 3 and Level 2
 Disposables are ~ 75% Level 3, 25% Level 4

Drapes
 70% Disposable – 30% Reusable
Organisation of The Reusable
Market
Mexico – number of procedures
unknown
 Gowns and Drapes are about 60%
Reusable

 ~ 50/50 split between cotton and microfiber
 Rapidly transitioning to disposable gowns
and drapes
Medline’s Position In The
Reusable Market

USA
 31% Market Share
 Primarily Gowns, Wrappers, Table Covers
and Mayo Stands

Canada
 30% Market Share
 Primarily Gowns, Wrappers, Table Covers
and Mayo Stands

Mexico
 Very little Reusable sales
Medline’s Position In The
Reusable Market

Complete Delivery on a Rental Basis
 Sterile Recoveries
○ Can cover about 70% of the USA
○ About $100 M in revenue
 Comprised of reusable's textiles, stainless steel and
disposable sterile packs
 Primarily Level 4 and 3; some level 2
 Other Laundries with Sterilization Capability
○ HLS – Illinois
○ MUHL – Wisconsin
○ Comtex – Ohio
○ Crown Laundry – Alabama
○ Mayflower - Maryland
Promotion of Reusable's




Dedicated Textile Sales
Representatives to sell textiles in the
USA and Canada
Implementing “Hybrid” programs to
provide a mix of Reusable's and
Disposables – this will increase our
reusable sales by 10 to 30%
Creating a sustainability catalog that
draws from every division (20) within
Medline
Providing support to build Pack Rooms
and provide guidance in meeting FDA
regulations within laundries
Promotion of Reusable's

Continue to educate on the AAMI
Guidelines:
The Position of Reusable's
vs. Disposables
Reusable Surgical Textiles have the
ability to provide a cost effective
alternative to Disposables
 The U.S. Government is reducing its
funding for hospitals

 Hospitals must find ways to cut cost and
save money
 Adding a pack room to the laundry and
converting to reusable's is one potential
savings
The Position of Reusable's
vs. Disposables
Cost Savings Analysis:
Product
Gown pack cost
Gowns used per year*
Annual Spend
XL Ultra Level 3 - KC 95121
$2.57
12,900
$33,153
XL Fabric Reinforced (no level)
$2.71
2,556
$6,927
$40,080
Total
Medline Reusable Level 3
$1.93
12,900
$24,883
Medline Reusable Level 4
$2.67
2556
$6,826
Total
Annual Savings moving to Reusable
Gowns
% Savings moving to Reusable Gowns
$31,710
$8,370
20.9%
The Position of Reusable's
vs. Disposables
Reusable's are also primarily synthetic
and do not produce lint which coincides
with the objective of AORN in the USA
and ORNAC in Canada
 Many hospitals have established
“Green” committees to try and become
more environmentally friendly

 We must support their efforts with
documentation on our sustainable products
Summary
Reusable Textiles have dramatically
changed in the past 100 years from Muslin
to high tech synthetic materials
 Disposables filled the vacuum we provided
when our product did not have the required
barrier properties
 Government helped to reinforce the
transition to disposables
 We must prove our products are cost
effective and sustainable to win over new
customers


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