Medical Device as a Service

The medical sector is facing major challenges: many practices and laboratories are undergoing a generational change. This shift brings uncertainties, especially when it comes to large investments required to stay at the cutting edge of technology.

At the same time, more and more investors are buying up several practices. These investors face a critical decision—either continuously invest in new equipment or continue using outdated devices that are no longer state-of-the-art.

We see similar challenges across other B2B sectors: pressure to innovate, the need to make high-stakes investment decisions, and the impact of market consolidation. This is why solutions like Medical Device as a Service (MDaaS) are gaining attention, offering a subscription-based approach to accessing medical technology.

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What is Medical Device as a Service?

Medical Device as a service or Medical Equipment as a service is a business model where medical devices are not sold through traditional sales channel but rather offered either as subscriptions, rentals, lease or pay-per-use basis.

The reason so many different models exist—such as subscription, rental, and lease—stems from the value proposition a business wants to offer its customers. Each model addresses different customer needs and usage patterns.

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Pay-per-use example

For example, dentists often use tools and components that need frequent replacement, and they can't afford to run out of these supplies. A business idea could be to install a drawer containing essential equipment with an IoT device that tracks usage. The device would monitor inventory levels and automatically bill for only what has been used. This type of pay-per-use model ensures that dentists always have the necessary tools without the hassle of restocking manually.

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Subscription or rental model example

In a subscription-based model, healthcare providers or clinics pay a recurring fee (monthly, quarterly, or annually) to have continuous access to medical devices. This model is ideal for hospitals and clinics that require long-term access to specific devices but don't want the burden of ownership, maintenance, or upgrades.

For example, a clinic might subscribe to a package of diagnostic imaging equipment. The subscription fee covers not just the use of the machines but also ongoing software updates, maintenance, and even automatic upgrades to the latest models as they become available. This ensures the clinic always has the most advanced technology without large capital outlays or the need to manage the equipment lifecycle.

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Lease model example

In a leasing model, medical devices are provided for longer terms, typically with an option to buy at the end of the lease. Leasing is beneficial for healthcare providers that want long-term use of a device but prefer to spread out payments over time.

For example, a hospital might lease an MRI machine for five years. During the lease period, they pay monthly installments, and at the end of the term, they have the option to either purchase the machine at a reduced cost or upgrade to a newer model through a new lease. This model helps them manage their budget and spread out the financial burden, while ensuring they have access to essential equipment for the long term.

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Medical Device as a Service companies powered by circuly

circuly is a subscription management software solution that provides the digital infrastructure to launch, manage, and scale an as-a-service business model for physical products like medical devices and other tangible products.

Here are some medical device-as-a-service companies powered by circuly:

Pulse4all - subscription service for defibrillators

Founded by Peter Houtzagers, Pulse4all is a company revolutionising access to defibrillators. After years of experience in the European defibrillator market, Peter observed how challenging it could be for individuals and small to medium-sized enterprises (SMEs) to buy, own, and maintain defibrillators. Many defibrillators on the market were not kept ready for use, causing critical delays in emergencies. Pulse4all was born out of the need to provide reliable, affordable, and hassle-free defibrillators

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With Pulse4all, the responsibility of maintaining, updating, and ensuring the defibrillator’s readiness is handled entirely by the company. This subscription-based model removes all barriers associated with purchase and ownership, offering customers a streamlined, worry-free solution. Customers can choose between models like the Philips FRx Kit Car or the Philips HS1 Kit Home/Office, and within just two days, they receive one of the best defibrillators available. The low monthly fee covers all aspects of ownership, with no hidden costs, ensuring peace of mind.

Quick Facts

Value proposition:

• Hassle-free and affordable defibrillator solutions for individuals and SMEs
• Full responsibility for defibrillator maintenance and readiness
• Simplifies the purchase, ownership, and maintenance process for customers
• Offers defibrillators like the Philips FRx Kit Car and Philips HS1 Kit Home/Office

Key offerings:

• Delivery of defibrillators within 2 days
• Low monthly fee covering all aspects, with no hidden costs
• Ensures defibrillators are always ready for use without worry or extra effort from the customer

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med4rent - rental and subscription service for medical equipment

med4rent S.à.r.l. was founded as an eCommerce startup in mid-2023 and offers a comprehensive portfolio for medical devices as rental products. Alongside individual devices from well-known brands, med4rent provides complete sets tailored for various medical specialties.

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At the beginning of the rental period, customers receive a brand-new device along with instructions for use, ensuring a seamless experience. If a device malfunctions during the rental, a replacement is provided at no extra cost. At the end of the agreed rental period, customers will receive a reusable shipping box to return the device free of charge.

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Quick Facts

Founded by: Michael Heine
Country of operation: Germany.
Business model: Subscription-based rental service for medical devices

Value proposition:

• Innovative and sustainable solutions for medical practices and laboratories through a circular economy approach.
• Access to state-of-the-art medical devices without the long-term commitment of purchase.
• Hassle-free experience with comprehensive technical support and free shipping, ensuring smooth operation.

Key offerings:

• A diverse portfolio of 34 categories of medical devices, including specialised product sets tailored to various medical specialties.
• Free loan devices in case of equipment defects, minimising downtime.
• Detailed instructions and ongoing support provided to customers, ensuring proper use and commissioning.

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Benefits of Medical Device as a Service

For Companies Offering Medical Devices:

1. Steady Revenue Stream: Transitioning to a subscription-based model allows companies to establish predictable, recurring revenue, reducing reliance on one-time sales.
2. Enhanced Customer Loyalty: Providing ongoing support and regular equipment updates fosters long-term relationships with customers, encouraging loyalty and repeat business.
3. Reduced Inventory Costs: Renting out equipment reduces the need for companies to maintain large inventories, as devices can be returned and refurbished for future rentals.
4. Market Adaptability: Companies can quickly adapt to technological advancements and changes in customer demand by offering the latest devices without the burden of outdated inventory.
5. Sustainability: Embracing a circular economy model allows companies to promote sustainability by reusing and recycling medical equipment, appealing to environmentally conscious customers.

For Customers:

1. Access to Cutting-Edge Technology: Customers can use the latest medical devices without the high upfront costs, ensuring they always have access to state-of-the-art equipment.
2. Flexibility and Convenience: Renting equipment for a specific period means customers can easily adapt to changing needs without long-term commitments.
3. Worry-Free Usage: With comprehensive instructions provided and free replacement devices in case of malfunctions, customers can use the equipment with confidence, knowing support is readily available.
4. Cost Savings: Renting can be more cost-effective than purchasing, especially for practices that may not need equipment on a permanent basis.
5. Simple Return Process: At the end of the rental period, customers can return the equipment easily using provided shipping materials, eliminating the hassle of managing ownership and disposal.

Conclusion

The medical device as a service model is revolutionising how healthcare providers access technology. For companies, it creates a sustainable revenue stream while enhancing customer relationships and adaptability to market changes.

For customers, this model offers access to cutting-edge technology without the burdens of ownership, alongside flexibility and a worry-free experience. The straightforward return process and cost-effectiveness make it an attractive alternative to traditional purchasing.

As the healthcare landscape evolves, adopting this model empowers both providers and users to drive efficiency, sustainability, and innovation in their operations, paving the way for a more responsive future in healthcare technology.