Agiliti, Inc. (Agiliti) operates as an essential service provider to the U.S. healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system.
The company is one of the leading experts in the manufacturing, management, maintenance, and mobilization of mission-critical, regulated, reusable medical devices. The company offers healthcare providers a comprehensive suite of medical equipment management and service solutions that help reduce capi...
Agiliti, Inc. (Agiliti) operates as an essential service provider to the U.S. healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system.
The company is one of the leading experts in the manufacturing, management, maintenance, and mobilization of mission-critical, regulated, reusable medical devices. The company offers healthcare providers a comprehensive suite of medical equipment management and service solutions that help reduce capital and operating expenses, optimize medical equipment utilization, reduce waste, enhance staff productivity, and bolster patient safety.
The company's diverse customer base includes more than 10,000 national, regional, and local acute care hospitals, health systems and integrated delivery networks ('IDN'), and alternate site providers (such as surgery centers, specialty hospitals, home care providers, long-term acute care hospitals, and skilled nursing facilities). The company serves the federal government, as well as a number of city and state governments providing management and maintenance of emergency equipment stockpiles; and the company is an outsourced service provider to medical device manufacturers supporting critical device remediation and repair services.
The company delivers its solutions through the company's nationwide network of more than 150 service centers and Centers of Excellence, a majority of which are certified to ISO 13485:2016. At the company's facilities, the company employs a team of more than 800 specialized biomed repair technicians, more than 4,000 field-based service operators who work onsite within customer facilities or in the company's local service centers, and over 200 field sales and account managers. The company's fees are primarily paid directly by its customers rather than by direct reimbursement from third-party payors, such as private insurers, Medicare, or Medicaid.
Market Opportunities
The company participates in the U.S. medical equipment services market consisted of the services the company offers through its onsite managed services, clinical engineering services, and equipment solutions service lines.
Solutions
The company provides a comprehensive offering for the manufacturing, management, maintenance, and mobilization of critical medical devices, built on an integrated service platform. The company's solutions help reduce the cost and complexity of acquiring, managing, and maintaining medical equipment inventories. The integrated nature of the company's offerings within its end-to-end service framework ensures the company maximizes value to over 10,000 customers nationwide as the company addresses more aspects of the equipment lifecycle continuum.
While customers may initially engage with the company across one aspect of its service lines within this framework, the company employs a variety of land-and-expand tactics to grow the company's relationships and customer share-of-wallet over time. These tactics include:
Gateway solutions, which offer an entry point to the economic buyer and include peak need equipment, surgical lasers and equipment, specialty beds and surfaces, and supplemental clinical engineering services;
Vertical solutions, which provide a deeper level of service with clinical offerings tailored to specific patient needs (e.g. bariatrics, wound management, falls management) and clinical engineering programs for broad equipment categories (general biomedical devices, diagnostic imaging equipment, surgical instruments);
Comprehensive, connected solutions through onsite managed services and outsourced clinical engineering services that connect previously fragmented customer workflow processes to drive operational efficiencies, realize improved clinician and equipment productivity, lower total cost of ownership, ensure regulatory compliance, reduce waste, improve time to therapy, and allow customers to effectively lower costs; and
Comprehensive logistics, management and clinical engineering solutions that allow IDNs to manage equipment inventories across multiple locations, and supports city, state, and federal government agencies in managing and maintaining equipment stockpiles.
The company deploys its solution offering across three primary service lines:
On-Site Managed Services: Onsite Managed Services are comprehensive programs that assume full responsibility for the management, reprocessing, and logistics of medical equipment at individual facilities and IDNs, with the added benefit of enhancing equipment utilization and freeing more clinician time for patient care. This solution monitors and adjusts equipment quantities and availability to address fluctuations in patient census and acuity. The company's more than 1,300 onsite employees work 24/7 in customer facilities, augmenting clinical support by integrating proven equipment management processes, utilizing the company's proprietary management software and conducting daily rounds, and unit-based training to ensure equipment is being used and managed properly, overall helping to optimize day-to-day operations and care outcomes. The company assumes full responsibility for ensuring equipment is available when and where it is needed, removing equipment when no longer in use, and decontaminating, testing, and servicing equipment as needed between each patient use.
Clinical Engineering Services: Clinical Engineering Services provides maintenance, repair, and remediation solutions for all types of medical equipment, including general biomedical equipment, diagnostic imaging equipment, and surgical equipment through supplemental and outsourced offerings. The company's supplemental offering helps customers manage their equipment repair and maintenance backlog, assist with remediation and regulatory reporting, and temporarily fill open biotechnical positions. With the company's outsourced offering, the company assumes full management, staffing, and clinical engineering service responsibilities for individual or system-wide customer sites. The outsourced model deploys a dedicated, on-site team to coordinate the management of customer-owned equipment utilizing the company's proprietary information systems, third party vendors of services and parts, and a broad range of professional services for capital equipment planning and regulatory compliance. The company employs more than 800 technicians across its more than 150 local market service centers and Centers of Excellence who can flex in and out of customer facilities on an as-needed basis, ensuring customers pay only for time spent directly servicing their equipment by an appropriately qualified technician. The company uses flex staffing for its supplemental clinical engineering solution and to augment support when additional technicians are needed to supplement the company's outsourced services during peak workload. The company contracts its Clinical Engineering Services with acute care and alternate site facilities across the U.S., as well as with the federal government and any medical device manufacturers that require a broad logistical footprint to support their large-scale service needs.
Equipment Solutions: Equipment Solutions primarily provides supplemental, peak need, and per-case rental of general biomedical, specialty, and surgical equipment to acute care hospitals and alternate site providers in the U.S., including some of the nation's premier healthcare institutions and integrated delivery networks. The company contracts for Equipment Solutions services directly with customers or through its contractual arrangements with hospital systems and alternate site providers. The company delivers patient-ready equipment within its contracted equipment delivery times and provides technical support and educational in-servicing for equipment as-needed in clinical departments, including the emergency room, operating room, intensive care, rehabilitation, and general patient care areas. The company is committed to providing the highest quality of equipment to its customers, and the company does so through the use of its comprehensive QMS, which is based on the quality standards recognized worldwide for medical devices: 21 CFR 820 and ISO 13485:2016. This commitment ensures that customers have access to patient-ready equipment with the confidence of knowing it has been prepared and maintained to the highest industry standard for optimal patient safety and outcomes.
Many of the company's customers have multiple contracts with Agiliti with revenue reported across multiple service lines.
The company's nationwide network of clinical engineers, storage and repair facilities, vehicles, and analytics tools gives the company scale to provide services for individual facilities, systems, regional IDNs, governments, and device manufacturers.
Growth Strategy
The key elements of the company's growth strategy are to retain and expand existing customer relationships; grow the company's customer base among customers that outsource; grow the company's serviceable market by contracting with those that insource; invest in complementary offerings that enhance customer relationships; and opportunistically pursue accretive M&A.
Business Operations
Service Centers
As of December 31, 2023, the company operated more than 150 local market service centers, which allow the company to provide its end-to-end healthcare technology management and service solutions to customers in virtually all markets throughout the United States. Each service center is responsible for supporting the equipment management needs of its local healthcare market across all sites of care. Each service center maintains an inventory of locally demanded equipment, parts, supplies, and other items tailored to accommodate the needs of individual customers within its geographical area. Should additional or unusual equipment be required by one of the company's customers, a local service center can draw upon the resources of the company's other service centers. With access to more than one million owned or managed units of medical equipment (over 300,000 owned) available for customer use as of December 31, 2023, the company can most often obtain the necessary equipment within 24 hours.
Depending on market size and demands, the company's service centers are staffed by multi-disciplined teams of sales professionals, service representatives, customer service technicians, clinical engineering (biomedical) equipment technicians, and surgical services technologists trained to deliver on the company's complete portfolio of customer solutions. Employees providing resident-based services through the company's on-site managed programs are supported by local site managers and/or the service centers in the markets where those customers are located.
Centers of Excellence
The company's local market service center network is supported by strategically located Centers of Excellence. These centers focus on providing highly specialized clinical engineering service and support. The Centers of Excellence also provide overflow support, technical expertise, training programs, and specialized service functions for the company's local service centers. All specialized depot work required by the company's manufacturer customers resides within these Centers of Excellence. The company's Centers of Excellence are certified to ISO 13485:2016 by BSI, DEKRA, NQA, and Intertek as a quality commitment to the company's customers.
Centralized Functions
The company's corporate office is located in Eden Prairie, Minnesota. The company has centralized many of the key elements of its equipment and service offerings in order to create standardization and to maximize the company's operating efficiencies and uniformity of service. Some of the critical aspects of the company's business centralized within its corporate office include contract administration, marketing, purchasing, pricing, logistics, accounting, quality, and information technology.
Medical Equipment Fleet
The company acquires, manufactures, or manages medical equipment to meet its customers' needs in some of the following product areas: respiratory therapy, infusion therapy, newborn care, critical care, patient monitors, specialty beds and therapy surfaces (which includes fall management equipment, bariatrics equipment, pressure area management and wound therapy equipment, stretchers, and wheelchairs), and surgical equipment. The company maintains one of the most technologically advanced and comprehensive equipment fleets in the industry and routinely acquire new and certified pre-owned equipment to enhance the company's fleet. The company's specialized equipment portfolio managers evaluate new products each year to keep abreast of current market technology and to determine whether to add new products to the company's equipment fleet. As of December 31, 2023, the company owned or managed more than one million units of medical equipment available for use by the company's customers of which more than 300,000 were owned by Agiliti.
In 2023, the company's ten largest manufacturers of medical equipment supplied approximately 65% of the company's direct medical equipment purchases. In 2023, three of the company's largest medical equipment suppliers accounted for approximately 41% of the company's medical equipment purchases.
Intellectual Property
The company has registrations with the United States Patent and Trademark Office ('PTO') for the following marks: 'Asset360' and 'BioMed360'; 'Universal Hospital Services, Inc.', 'UHS', and the UHS logo; 'OnCare,' 'Harmony,' 'Quartet,' 'Agiliti' and the Agiliti logo. The company has applications pending with the United States Patent and Trademark Office for the following marks: 'Vityl'. The United States service mark registrations are generally for a term of 10 years, renewable every 10 years if the mark is used in the regular course of business. Sizewise maintains 45 issued patents in the United States and other countries, is prosecuting ten pending patent applications in the United States and other countries. Sizewise maintains 46 registered trademarks in the United States and in other countries. Sizewise maintains five applications for registration of trademarks in the United States and one in Canada. Sizewise also has many common law trademarks. Sizewise owns copyrights on original works of authorship and provides appropriate notice of copyright on its original works of authorship. There is no pending litigation pertaining to seven Sizewise's intellectual property.
The company has a domain name registration for agilitihealth.com, which serves as its main website. In 2011, the company registered the domain name OnCareMedical.com featuring the company's OnCare sub-brand for patient handling products. In 2012, the company registered UHSSurgicalServices.com. In 2016, the company acquired resxray.com. In 2021, the company acquired Sizewise.com. In 2023, the company acquired dabir-surfaces.com.
The company has developed a number of proprietary software programs to directly service or support its customers, including 'inCare', which is a medical equipment inventory management system that allows the company to track the location and usage of equipment the company is managing at a customer's location in the company's 360 Solutions. 'MyAgiliti' is the company's online ordering and reporting site which accesses its proprietary programs specifically designed to help customers meet medical equipment documentation and reporting needs under applicable regulations and standards, such as those promulgated by the FDA and The Joint Commission. Additionally, this tool provides detailed reporting on utilization, compliance, and analytics for management. 'Vityl' is the company's equipment maintenance and planning system, which houses the company's work order system and assists in the company's customers regulatory compliance recordkeeping. 'Scheduler' is the company's web-based scheduling, tracking, reporting and physician preference system for Agiliti Surgical solutions. 'inCommand' encompasses the proprietary software tools that allow the company's employees to manage and maintain the company's extensive equipment fleet and serve its customers more effectively and efficiently.
Marketing
The company markets its programs primarily through its direct sales force, which consisted of more than 200 sales representatives as of December 31, 2023. The company supports its direct sales force with technical, clinical, surgical, and financial specialists, who lead new business selling efforts to deliver comprehensive solutions for the company's customers. The company's national accounts team also supports its direct sales force through its focus on securing national and regional contracts.
The company's sales force uses a structured and consistent process to target customers where the company can deliver significant financial and operational value over time. Each sales team member is responsible for identifying and prioritizing customer opportunities in their territory through the use of segmentation tools and market intelligence, leading to short- and long-term sales pipelines balanced across the company's comprehensive solutions.
The company also markets its end-to-end solutions through its website at www.agilitihealth.com and various social media and digital marketing channels, including a variety of trade publications and organizations with subscribers and members who are key decision makers for the company's solutions.
In the company's marketing efforts, the company primarily targets key decision makers, such as administrators, chief executive officers, chief financial officers, chief technology officers, chief medical officers and chief nursing officers, as well as physicians, directors and managers of functional departments, such as supply chain, materials management, surgery, purchasing, pharmacy, biomedical services, and clinical engineering. The company also promotes comprehensive solutions to IDNs, hospitals, surgery centers, manufacturers, alternate site provider groups, and associations.
Seasonality
Historically, the company's first and fourth quarters (year ended December 2023) are the strongest, reflecting increased hospital census and patient acuity during the fall and winter months. However, the COVID-19 pandemic impacted the seasonality of the company's business.
Regulatory Matters
Regulation of Medical Equipment
Manufacturers of medical equipment are subject to regulation by agencies and organizations, such as the FDA, Underwriters Laboratories, and the NFPA. All medical equipment the company outsources conforms to these regulations.
The Safe Medical Devices Act of 1990 ('SMDA'), which amended the Food, Drug and Cosmetic Act ('FDCA'), requires manufacturers, user facilities, and importers of medical devices to report whenever they believe there is a probability that a medical device has caused or contributed to a death, illness, or injury. In addition, the SMDA requires the establishment and maintenance of adverse safety and effectiveness data and various other FDA reports. Manufacturers and importers are also required to report certain device malfunctions. The company diligently evaluates all complaints for devices the company manufactures and reports to the FDA as required.
The company holds such licenses in 26 states. The Health Insurance Portability and Accountability Act of 1996 ('HIPAA') applies to certain covered entities, including health plans, healthcare clearinghouses and healthcare providers, as well as to business associates, such as the company. Because of the company's self-insured health plans, the company is also a covered entity under the HIPAA regulations.
The company is subject to the federal Anti-Kickback Statute, which prohibits the knowing and willful offer, payment, solicitation or receipt of any form of 'remuneration' in return for, or to induce, the referral of business or ordering of services paid for by Medicare or other federal programs.
History
Agiliti, Inc. was founded in 1939. The company was incorporated in Minnesota in 1954 and reincorporated in Delaware in 2001.
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