Niwot entrepreneur pivots his medical business to supply PPE

The market for personal protective equipment, or PPE, operates like the Wild West, as Niwot entrepreneur Dave Rechberger explains it.

He leveraged his contacts in the medical business and got into the chaotic market early this year when there became a critical need for PPE for medical providers who couldn't get masks and other equipment due to major shortages, supply chain disruptions, fierce competition and unscrupulous actors working under the shadow of the coronavirus pandemic.

The owner of Disruptive MedTech said the market has stabilized somewhat, but with cases of COVID-19 steadily rising in the U.S., there is a renewed sense of urgency, tight supplies and plenty of problems to be solved.

"We saw a need and we jumped in and went after it," Rechberger said.

He and his partners were already in the business of manufacturing custom medical equipment along with fulfillment and distribution of various medical products to the healthcare industry. In January, they talked with doctors and recognized there was a crisis coming. Disruptive MedTech was not in the best position at the time. It serves the market for elective surgeries, which were being cut back to make room in hospitals for COVID patients.

But the company was well positioned in other ways. Rechberger worked in Asia and has offices overseas. He has medical manufacturing contacts in China and understands how to import.

"We had a very, very fortunate supply chain in Disruptive MedTech," he said.

He also had the customer relationships in the medical field and a system already in place to get products to them. Rechberger made a laser-quick decision to pivot his business toward supplying face shields, three-ply surgical masks, washable cotton masks, intubation enclosures and gloves.

By February, Disruptive MedTech was importing and distributing desperately needed PPE. The company focused on a niche market that wasn't well-served - organizations like Hover Community, a senior living facility in Longmont, a women and children's health clinic in Wyoming and smaller hospitals.

Those organizations don't have the need, space or money to buy PPE in massive quantities, something major suppliers often require, according to Rechberger.

"If you need a box of 50, you just couldn't get that in the market space," Rechberger said. "We were able to take our large purchasing capability and supply 50, 100, 2000 at a time versus 500,000 at a time."

The competition for PPE has been fierce. That made organizations vulnerable to shady sellers looking to take advantage of a desperate situation.

"Everybody turned into a PPE supplier," Rechberger said. "All these hospitals were being inundated with fake products or random calls. Nobody knew what was real and what was not real, We always took the position that if we don't have it in inventory, it doesn't exist. A lot of other companies made promises that they couldn't keep. There was a lot of scamming and some unethical interactions as things were getting crazy."

With trust in short supply, Rechberger's track record and relationships in the medical field made a difference for the company's customers. Hover Community in Longmont got PPE from Disruptive MedTech when it had few options.

"They have been able to secure the necessary PPE for our staff when other suppliers have run out," said Lisa Czolowski, CEO of the senior living community. She also noted the quick turnaround and quality of the products. Hover Community has only had one worker test positive and none of its residents have tested positive.

Disruptive MedTech may be in the perfect location to operate in the Wild West market of PPE - Laramie, Wyoming. That's where the manufacturing facility started and will soon expand once its new 6,000 square-foot building is ready to occupy later this year. The young company has been hiring. It will have 11 employees this year and plans to double the workforce next year.

There could be an even greater leap in the company's future. Rechberger is exploring the possibility of manufacturing face masks in the United States, rather than importing from China, which makes the vast majority of the world's supply, he said.

It could be another opportunity to be the right business at the right time. Presidential candidate Joe Biden recently announced that if he's elected, he will shift to the United States the production of medicinal supplies and other critical goods and technology that come from overseas.

Peter Navarro, trade advisor to the Trump administration, said they are working to bring home medical supplies and equipment, admitting it is a challenge. Two weeks ago, the American Medical Association (AMA), asked the federal government to use the Defense Production Act to harness the U.S. industrial base to increase supplies of PPE on behalf of physicians.

"Without adequate PPE, physician practices may have to continue deferring care or remain closed, which will continue to have a dramatic impact on the health of their patients," wrote Dr. James Madara, CEO of the AMA. "For the health of patients, physicians, and staff, as well as the future sustainability of these practices, the federal government must do more to help navigate the challenges of securing PPE."

Rechberger said there are a lot of good reasons for domestic production.

"From a geopolitical standpoint, if China decided to stop shipping, we have very limited places where we could purchase these," Rechberger said. "It also provides a surge capacity that, even if you're continuing to buy from Asia, it takes time to exercise those supply chains and to increase or decrease those demands in a very, very short period of time."

And, domestic manufacturing would make supplies less vulnerable to international terrorism, trade wars, transportation disruptions and other issues out of U.S. control.

The idea of domestic manufacturing has already been gaining traction, he said, accelerating because of the health crisis.

"Over (the) last five to six years, I've seen a big shift in mentality on, 'How do we bring more of this stuff back to the U.S.?' And, how do we get more innovative and creative to bring costs down? That's really what it comes down to. How do you make it so you have a good liveable wage which is necessary In the United States? That's what we're going to figure out," he said.

Rechberger said his company is working with major strategic partners to make it happen, including some state governments. Whether he continues to import or moves into manufacturing, Rechberger said he's glad he has been able to fill a critical need by jumping into the PPE business. He plans to stick with it for the long haul. "We're pretty proud that we're able to help," he said.