Cramer: AirBNB style company changing health care
Jim Cramer spends a lot of time educating investors about the ways to make money in stocks of publicly traded companies. However, sometimes the only way to truly understand a trend controlling stocks is to take a look at smaller privately-held companies off the tape.
Cohealo is one of those private companies that is a fast-growing software company, and has taken the health care industry by storm. Its software allows different hospitals within the same health care system to share expensive surgical equipment, and ultimately save enormous amounts of money.
The company's software tracks fleets of medical equipment, and provides real-time updates to let hospitals know where the machinery is, its availability and how much it is being used. It's a combination of analytics and logistics for hospitals to share non-emergency surgical equipment.
It's basically the AirBnB for hospital equipment.
Before Cohealo came along, hospitals had to either buy these machines or rent them at ridiculously high rates. Thus, sharing the equipment is a total game changer and it seems the industry agrees as Cohealo has locked down three of the five top health care systems in the country as clients.
"I think Cohealo's software represents a great leap forward when it comes to containing health care costs, one of the biggest long-term themes of our era," the "Mad Money" host said.
To learn more about how Cohealo is disrupting the health care space, Cramer spoke with its CEO Mark Slaughter.
"We help health systems utilize their resources more efficiently, from the hundreds of millions of medical equipment that they own at every facility to how they deploy their capital in investing and upgrading these systems," Slaughter said.
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So by leveraging the principals of a sharing economy, the company has allowed their clients to extract the most value out of their resources. According to Slaughter, a recent study from GE indicates that medical devices on average sit unused for approximately 60 percent of its useful life.
The CEO has found that as the merger and acquisition activity within the health care space has increased, the focus on reducing costs has grown and thus prompted the popularity in Cohealo.
"We think we have found a perfect storm of inefficiency. Health systems and hospitals either own too much of something or not enough of the other, but they don't have exactly what they need. We are hoping by linking it together…we can find the perfect balance," Slaughter added.
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