The hospital repair problem PartsSource solved by admitting its first idea was wrong

In the useful version of the PartsSource creation story, a hospital technician is not sitting at a desk. He is bent over a disabled piece of medical equipment, hands occupied, patient schedule ticking. In 2001, founder A. Ray Dalton and a seven-person team built an application-service-provider model that expected this person to browse for a replacement part online, click through to a supplier and leave PartsSource to collect a fee on each side. It was sensible dot-com logic. It was also wrong.

Dalton later described the flaw with the clarity founders usually acquire after the invoice is paid: the person who needed the part had his head inside a machine, not in front of a keyboard. The company changed course. Instead of being a directory, it became an aggregator and an active sourcing layer. Staff would help find the part; proprietary software would remember which supplier was likely to make it or have it in stock. The business moved closer to the broken machine.

“The person needing the part has his head inside of a machine, not sitting in front of a keyboard.”A. Ray Dalton, founder

The catalog is only the visible part

Today, PartsSource is a private healthcare marketplace and enterprise-software company owned by Bain Capital. It says more than 5,000 hospitals and 15,000 clinical sites use its network. More than 6,000 original-equipment manufacturers and suppliers sit on the other side, alongside a national field-service network. The catalog holds more than 4 million products and services, from ordinary batteries and cables to components for infusion pumps, monitors, CT scanners, MRI systems and portable X-ray equipment.

Calling it a catalog, however, misses the business. A hospital can already phone an OEM, use a distributor, hire an independent service organization or ask a technician to chase three vendors. PartsSource sells the coordination around the purchase: product-quality history, standardized approvals, order status, returns, service dispatch, contract administration and data that flows back into the hospital's computerized maintenance management system. The aim is to let the clinical engineer repair equipment rather than become an accidental buyer.

Figures are reported by PartsSource. Network totals can overlap and change as the marketplace grows.

One workflow, three ways to buy back time

The flagship product, PartsSource PRO, combines procurement software with a managed service. On-demand parts offers the long-tail inventory. On-demand service finds qualified technicians for corrective work, preventive maintenance and supplemental labor. Repair and Service Agreements consolidate recurring maintenance relationships and their paperwork. Formulary controls steer buyers toward approved choices; visual analytics show spend, quality and supplier performance; integrations place the transaction inside systems the hospital already uses.

The business model follows the structure of a vertical marketplace. Hospitals route parts and service demand through the platform, while suppliers gain access to an aggregated, pre-approved customer base. PRO adds an enterprise-software and managed-workflow relationship, with pricing negotiated by customer and program. The customer-facing pitch is expressed as an outcome: the company advertises first-year cost reductions of 10% to 30%, a sixfold improvement in quality and a 95% average efficiency increase for PRO users.

The receipts are hospital-shaped

At Marshfield Clinic Health System, the story began with consolidation. Biomedical-services director Jay Olson centralized parts spending, then integrated PartsSource with the health system's existing purchasing and maintenance workflow. The system reported a 35% saving after one quarter and $1.2 million saved on parts in 2019. One specialized X-ray tube cost $89,000 through the marketplace - more than $30,000 below the price from the hospital's usual vendor - and arrived the next day. Just as important, part cost stayed attached to the machine's record.

Summa Health tested the service side on imaging equipment. Its case study reported more than $800,000 in annual parts savings and nearly $1 million less in total CT-scanner service and support than under its traditional model. Ballad Health used PRO during the merger of two formerly competing systems, when it had roughly four months to bring different parts-ordering methods into one process. These are vendor-published case studies, so they should be read as successful implementations, not promises. They are still useful because each shows the prerequisite: operational change came before the savings screenshot.

The moat is the return label

Most marketplaces boast about selection. PartsSource also cares about what comes back. Its PRECISION Procurement technology uses more than 3 billion data points to inform selection, including quality and supplier performance. A defective replacement part, a late delivery and a weak service event are not merely annoyances; they are feedback for the next purchase. Scale creates buying power, but recorded outcomes create judgment.

This is how PartsSource differs from a direct OEM relationship or a broad distributor. It is manufacturer-neutral, focused on the peculiar long tail of clinical equipment and embedded in the work order. The competitive risk runs both ways. OEM support may be the required choice for proprietary systems, warranties or high-risk modalities. A hospital with little volume may not gain much from consolidation. PartsSource becomes more valuable when a health system has many sites, inconsistent vendors, enough transactions to benchmark and leaders willing to standardize how technicians buy.

The platform keeps swallowing adjacent bottlenecks

Under CEO Philip Settimi, who joined in 2014, the company widened its frame from replacement parts to clinical-resource management. Great Hill Partners acquired it in 2017. Four years later, after its enterprise hospital base had grown from around 100 to more than 1,200, Bain Capital bought the company for an undisclosed sum. The phrase “parts source” had become almost too small for the product.

The expansion accelerated in 2025 and 2026. PartsSource opened a Customer Experience Center at its new Hudson, Ohio, headquarters, with replicas of hospital environments and a biomedical training lab built with the College of Biomedical Equipment and Technology, RSTI and NVRT Labs. Then it acquired SkillNet, a workforce-intelligence platform that maps technician capabilities and competency compliance. The coming PRO Workforce product adds diagnostic decision support, training and workforce planning to parts, service and asset data.

That acquisition makes strategic sense because the next unavailable component may be a person. PartsSource says labor shortages remain a central concern for hospital technology leaders. Knowing that an infusion pump needs attention is insufficient if the health system cannot identify a qualified technician, guide the repair or close a documented skill gap. The company is trying to connect equipment readiness with human readiness.

In August 2026, Memorial Hermann Health System made an undisclosed strategic investment. The detail that matters is not the round label. Memorial Hermann was a customer investing in the vendor's direction, as PartsSource repositioned itself as a “performance platform for clinical technology.” PartsSource said 150 health systems were advancing this enterprise model. Customer-as-investor is not proof that every deployment works, but it is a meaningful vote for the category.

What another operator can copy

The copyable PartsSource lesson is not “build a marketplace.” It is to observe the moment of work before choosing the interface. Dalton's directory failed because it digitized an assumption. The replacement model took responsibility for the outcome: find the part, judge the supplier, move the order, record the result. Once that loop existed, software could make it faster and the accumulated evidence could make it smarter.

There is a pleasing loop in the story. PartsSource's first product misunderstood where a technician spent attention. Its newest product tries to understand what that technician knows. Between those two points sits the less cinematic work of hospital operations: a tube arrives, a vendor answers, a service record closes and a room returns to the schedule. “Healthcare is always on” is an ambitious mission. Most days, it is achieved one very specific part at a time.