StartSmart Finds a Niche

By Ray Carter The Journal Record | THE JOURNAL RECORD, April 25, 2001 | Go to article overview

StartSmart Finds a Niche


Ray Carter The Journal Record, THE JOURNAL RECORD


Faced with plummeting reimbursement rates and growing demand for new medical treatments, many hospitals have slowed investment in new medical technology in an effort to shore up their financial foundations.

StartSmart Sleep Diagnostic Programs, a new Oklahoma City-based company, could change that scenario -- at least when it comes to the treatment of sleep disorders.

Andrew Macias Jr., president of StartSmart, said that the treatment of sleep disorders is a rapidly growing field in the medical world, but few officials have the proper training to diagnose those illnesses, and few hospitals have invested in the training and equipment necessary. In the past, most hospitals would hire other companies to diagnose sleep disorders on a contract basis. But, due to declining reimbursement rates from government programs, outsourcing is no longer an option for many medical centers.

"Over the course of the last four or five years, there has been a tremendous decrease in outsourcing, hospitals or clinics outsourcing services, and a tremendous increase in in-housing most diagnostic services," Macias said.

But Macias saw that shift as a new business opportunity. He founded StartSmart to provide training and equipment to in-house personnel at medical centers around the country, recouping his expenses through long-term contracts.

"We kind of took a ride with the changes or the evolution of hospital administration," he said.

Macias describes StartSmart Sleep Diagnostic Programs as a hybrid sleep diagnostic company that provides education, support, equipment, policies and procedures to hospitals, physician clinics, home medical equipment companies and other medical entities.

The company provides training to staff therapists during a two- week process. The first week of training requires the client to travel to StartSmart's Oklahoma City headquarters, where the client receives clinical and technical training related to sleep studies.

"And we train them with the equipment that they purchase through us, which is sleep instrumentation," Macias said.

During the second week of training, the company installs the equipment at the client's facility and trains the client using actual test subjects on the newly purchased equipment.

Clients enter into a long-term agreement, normally lasting four years, in which StartSmart agrees to pay for the equipment upfront if the client will pay on a fee-for-service basis for the scoring and analysis of data by StartSmart officials for the next four years. The data is collected on-site by the client.

"What we do is purchase the equipment. We provide the equipment to the hospital," Macias said. "They utilize their employees. We train their employees how to do sleep studies. That study is streamlined to us, via the Internet or overnight delivery. And we provide the scoring and analysis thereafter."

Macias said all of the "professional components" of diagnosis are completed by StartSmart personnel.

While sleep diagnostic equipment costs anywhere between $25,000 and $50,000, StartSmart's clients face an upfront expense of only $3,000 for training, Macias said. He declined to state the overall cost of the average long-term agreement.

Steve Jantz, vice president of sales and marketing, said StartSmart would eventually make money based on volume.

"In the long run, we're going to be able to get the return on our end, based on the four-year (contracts)," he said. "We're hoping that we're going to have 100 contracts out there, and that's where we're going to get our revenue stream from."

At the same time, Macias said the StartSmart program gives hospitals a new recurring revenue stream base that diversifies the type of services offered at the hospital. …

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