ReLink helping hospitals clear out the clutter

From Crain’s Cleveland Business

Many of us — at least the 1% who have not yet “tidied up” under the spell of Netflix clutter guru Marie Kondo — can relate to the pain of storing stuff we just don’t use anymore.

Spare bedrooms and basements are littered with old recliners, boxy TV sets, rusty weight benches and forgotten instruments, records and books.

Hospitals have the same problem, according to Jeff Dalton, president and CEO of reLink Medical in Twinsburg Township.

Only “times a thousand in terms of time and value and complexity,” he said. “Some of this medical equipment is dangerous. It might be a biohazard or have environmental issues.”

Then there’s the legal obligation to safeguard patient health information, which can be stored inside electronic devices.

Partnering with his father, Ray Dalton, Jeff Dalton co-founded reLink in 2015 to help medical officials sell, scrap, recycle or otherwise safely discard retired hospital equipment. The duo previously spawned and nurtured PartsSource Inc., an Aurora medical device parts broker, which they sold in 2017.

In four years, reLink has seen triple-digit growth, according to Jeff Dalton. The 40-person company will bring in $10 million in revenue this year, and late last year, it left the 25,000-square-foot Aurora site where it began for a 75,000-square-foot building off Enterprise Parkway in Twinsburg Township.

ReLink’s new home includes a 65,000-square-foot warehouse where incoming CAT scanners, hospital beds, infusion pumps, colonoscopy cameras, surgical headlights and about any other equipment once used for patient care is sorted, photographed, inspected and digitally cataloged. Items with little or no value are disassembled for parts that can be sold or recycled.

Everything else, about 65% of the inbound products, is assigned an aisle in the warehouse “showroom” and logged into reLink’s sales channels, which range from phone marketing and online auctions to live auctions and liquidation sales.

“Every product will go through each one of our channels, forcing it out,” Jeff Dalton said. “Even if we ultimately have to recycle an item, we will turn this entire space in less than 90 days.”

Recycling or landfilling, however, is a last resort. Because reLink works on consignment, “nobody makes money” if it can’t find a buyer for the 5,000 pieces a month it salvages from hospitals, according to the CEO.

“My pitch to hospital clients is that we will try our best to get as much value out of it as we can,” he said.

“It’s like they sort of got this hidden savings account they did not know they had,” added Ray Dalton, reLink’s executive chairman and managing partner. “We have accounts where we are giving back $300,000, $400,000, $500,000 a year to them, and it’s real money.”

The transition from selling new medical parts to used medical equipment was a natural one. Jeff Dalton said he and his father had turned over daily operations of PartsSource in 2014, recognizing they were better suited for “startup mode.” Yet, one thing they took away from working with clients during more than a decade of running PartsSource was that “hospitals did not know how to handle getting rid of their old stuff,” he said.

“They are almost paralyzed to take action because they don’t know what to do,” Jeff Dalton said. “Many hospitals, and I was really surprised by this, actually have storage facilities for excess medical equipment.”

Ray Dalton said an important part of reLink’s value proposition is the “dirty work” of collecting and managing hospital dispositions, including compliance with patient data and biomedical waste regulations, as well as internal near-zero landfill commitments.

Still, an equally big benefit is the company’s software platform. Ray Dalton said reLink has invested more than $1 million in the development of software that allows hospitals to track each item the company takes from their ownership.

“We really are more of a software company that happens to do disposition, and we have to do the disposition in order to add content to the software,” he said.

The asset-tracking platform not only tells hospital administrators what became of their retired equipment, but also which used devices are nearing disposition or need servicing. By having a better picture of their products’ lifecycles, hospitals eventually will be able to replace equipment before it loses too much of its value and improve profitability through smarter procurement patterns, Jeff Dalton said.

Getting inside hospital buying strategies, however, is just part of reLink’s growth plans. Jeff Dalton said the company plans to have 60 employees in Twinsburg Township within the next five years and by the end of 2019 open operations in one or two regions beyond the six-hour radius serviced by its Summit County base. Prospective satellite locations include Indianapolis, Philadelphia, Atlanta and Memphis, he said.

Ray Dalton said he expects most of that remote growth to come from acquisitions or partnerships with businesses that already perform some aspect of reLink’s sales channels.

The Daltons also would like to see their startup evolve into a more buyer-centric play by, for example, renting warehouse space so that international customers — about one-quarter of its buyers — can fill large shipping containers over time rather than incurring the costs of smaller, individual shipments. Or, Jeff Dalton said, it “could create a dedicated web-based platform for regular buyers and reduce reliance on intermediaries like eBay.

“Why can’t we build an Amazon for excess medical equipment?”