Green Imaging has been wildly successful in buying capacity for resale in the health care world of American health care finance.
A multi-million dollar MRI machine sitting idle between BUCA paying patients makes no money. In simple terms here’s how it works:
“Mr. MRI Owner, how much do you charge for a (CPT Code 1234)?”
“We charge $5,000.”
“And how often does your MRI machine sit idle?”
“35% of the time!”
“Ok, I’ll pay you $xxxx.xx up front for 35% of your capacity and resell CPT Code 1234 for $500! You win, and I win and the patient wins!”
The business of buying capacity for resale is made possible by the law of supply and demand. The higher the price the lower the demand. In this model success is dependent upon higher retail pricing, not lower. When capacity equals demand the model fails.
Buying and selling capacity is widespread in many different industries. Years ago I learned that from Olga, a Houston travel agent. She would buy empty airplane seats months in advance and build a tour package around that. Landing in Belize and retrieving our travel bags I noticed almost every bag in the merry-go-round had Olga’s travel tag attached. When I got back I asked Olga “Did you buy out the entire flight?”
“Yes, of course!” she said in her heavy Russian accent. “I held 50 seats on the flight you were on!”
