Recently, Kinetic Concepts Inc. (KCI) entered into an agreement with Novation, a supply contracting company, to renew the present contract with Kinetic’s Therapeutic Support Systems business (TSS) through the end of 2013. The current contract renewal is an extension of Novation and Kinetic’s contractual relationship for more than 20 years now.
Novation is a leading supply-contracting company and provides services to many healthcare institutions. Novation manages the rental agreements across all four of TSS segments. It also manages other contracts on behalf of Kinetic such as helping in suppliers’ selection, price monitoring and facilitating in the implementation of contracts.
Kinetic’s TSS care business includes four segments such as Critical Care, Wound Care, Fall Injury prevention and Bariatric Care.
Kinetic, through Novation’s contracting services, offers innovative and qualitative therapies, hospital beds, bariatric products, mattress replacement systems as well as overlays to many US healthcare institutions. The renewal of its contract with Novation makes certain that these services are continually accessible to patients across the US availing the benefits of TSS.
Revenue at Kinetic’s US TSS segment fell 2% year-over-year in the first quarter of fiscal 2010 due to lower rental volumes in the US resulting from a milder flu season. However, the company believes that the Wound Care and Bariatric segments have stabilized, which could limit further material declines in the segment. We believe that contract renewal with Novation will also help to improve TSS business in the US to a certain extent.
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