Auxilio Wins Big Managed Print Service Deals in Healthcare

Auxilio Inc., a healthcare-focused managed print services business, has been capturing big deals this month. This week the company announced a three-year, $3.5 million MPS deal with New York Hospital Queens. That contract follows the company’s win earlier this month at Saint Joseph’s Medical Center in Yonkers. The company estimates the Yonkers contract at $1.5 million to $2 million. Here’s a closer look at Auxilio’s momentum,

Both contracts stem from Auxilio’s marketing alliance with Sodexo, a food and facilities management services company. In November 2008, Auxilio inked a five-year agreement to provide MPS to Sodexo’s U.S. customer base. As part of that alliance,  Auxilio issued Sodexo warrants to purchase 1.5 million shares of the company’s stock, according to Joseph Flynn, president and chief executive officer of Auxilio.

Flynn said Sodexo has a presence in about 1,500 U.S. hospitals. To open that opportunity, Sodexo in March 2009 assigned a member of its sales team members to work full-time with Auxilio. That sales person goes into Sodexo accounts to arrange meetings between Auxilio and a hospital’s C-level executives.

The sales activities have begun to pay off this year. Flynn said Auxilio has closed four deals this year — including the two New York contracts — in conjunction with Sodexo.

“The pipeline has grown significantly,” Flynn added, crediting the Sodexo alliance for bolstering the company’s market access. “For a small company, it’s very expensive to get to the C suites of hospitals.”

Origins

Auxilio got its start as an MPS provider in 2004. The company had been operating as PeopleView Inc., providing human capital management reporting tools and consulting services. The company sold the PeopleView business to Workstream Inc. and then purchased The Mayo Group, a document image management firm.

Flynn described the acquired company as a “higher-end copier sales group.” The Mayo Group had a healthcare client on board prior to the acquisition and, as the newly formed Auxilio, soon landed a second hospital customer.  Auxilio decided to focus on healthcare and position itself as a vendor-independent service provider, rather than an equipment reseller.

Flynn cited a couple of characteristics that he believes makes healthcare a solid focus: campus environments with large buildings where economies of scale can be achieved and a market space that tends to print a lot of paper.

But will the latter point remain the case as hospitals switch to electronic medical records? Flynn said he thinks so. Flynn said Auxilio has found that 10 to 15 percent of a hospital’s print volume relates to medical records. Reports and other office documents will continue to head for the printer.

The rise of electronic medical records, he said, will have more of an effect on paper forms than on general printing.

Managed print is typically provided as a horizontal service, but there’s at least one example of a vertical MPS provider beyond Auxilio: Advantage Enterprises Inc., a managed print company based in South San Francisco, Calif.,specializes in law offices.

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