Neoforma Prescribes the Web
Jeff Kleck has what he believes is the cure for what ails hospitals the world over: a high-speed electronic equipment procurement system.
As an academician and later a marketing executive at medical radiology equipment manufacturer Varian Associates, he got an idea of just how far the healthcare industry was behind the rest of rest of the world in modernizing its marketing. Earlier this year, he co-founded and became CEO of Neoforma Inc. (www.neoforma.com), which he describes as a Web-based business community where hospitals and other medical institutions can review, assess and get price quotes on medical equipment and learn of specialized news.
For the better part of a year, Santa Clara, CA-based Neoforma has b een recruiting vendors of hospital equipment ranging from relatively inexpensive rubber gloves to magnetic resonance imaging (MRI) scanners which sell for several million dollars. About 13,000 vendors have signed on so far.
At the same time, the company has sought out customers in hospitals, other medical facilities and even governments in 120 countries around the world. Neoforma already has attracted about 5,000 customers in 50 different institutions, he says. These include doctors, nurses, administrators, purchasers and architects. Neoforma makes its revenue from bringing buyers and sellers together.
“This [system] gives U.S. manufacturers the ability to expand internationally,” says Kleck, noting domestic growth in medical equipment has flattened out for several years.
Early next year, Neoforma plans to expand its electronic commerce offerings, enabling buyers to request price quotes online and order directly through the site using a credit card. From this, Kleck is projecting more than $1 million in revenue for next year.
Neoforma isn’t doing any formal advertising. Instead, it’s relying on search engine listings on Yahoo! and other sites and on its six-person sales force to contact potential customers. Kleck claims his already-established healthcare industry contacts make this job a little easier.
