Surgeons aren't taught to optimize networks or build web applications. Surgeons are taught to know when to use a 2-0 Vicryl suture and how to ligate the dorsal venous complex. For a time, with patients coming to Miami from such faraway places as New Zealand, Dr. Krongrad did what he was taught to do.
It wasn't enough. The trouble for many had nothing to do with surgical technique. It had everything to do with mundane logistical matters such as airport pickup, cost transparency, value, and so on. These are the kinds of things that consumers always consider.
The team at the Krongrad Institute for Laparoscopic Radical Prostatectomy learned to accommodate by offering white glove service tied to new arrangements with facilities that charged less. It learned to leverage spot capacity in operating rooms and deliver the savings to market. It learned also to contract directly with pathologists and anesthesiologists and, given the mobility of surgical gizsmos, including robots, to integrate more and more choices.
The pivotal moment happened when a patient from Oregon was unable to afford his surgery in Portland. In his case, the team was also unable to solve his problem in Miami. The solution came by mobilizing: sending the patient, a robot from Colorado, and the surgical team to an operating room in Trinidad. It worked beautifully as cost plunged by 60% relative to retail, which the patient could afford. Surgical care was delivered.
To optimize further, under the rubric of Mobile Surgery International, the team next identified beautiful and largely empty operating rooms in Wichita. Those did just fine until a new set of largely empty operating rooms were identified in Miami. And so on, until the cost of surgery plunged 25% relative to wholesale. That's when Blue Cross of Florida came around and the country's first surgical bundled network tier was born. It was based on surgeon subject expertise -- what is an operating room, what does it take to do surgery -- and the inherent mobility of patients, anesthesiologists, equipment, and surgeons.
The idea behind Allevion was to build technology that would accelerate and scale up the provision of similar value to everyone: all patients, payers, employers, and so on. The idea was to harness the same surgical subject expertise, couple it to automation, and deliver real value to the market. By our estimates, at maturity this would mean 40% more efficiency, which translates to an estimate $600BB per year in savings.
To get going, Allevion built a multitenant software platform that delivers a free market for surgery: surgeons can charge what they want, patients can buy what they want. This market, launched as Surgeo and designed to serve the uninsured segment of the market, taught the team more lessons relating to everything from software architecture to surgeon qualification. Among the most interesting lessons was this: the cost of surgery drops in a free market. Perhaps not surprising, but never before actually witnessed.
The problem with Surgeo, which can be privately labeled for any hospital, device company, or other customer, was that it doesn't offer cost information relevant to insured customers. This became a huge problem because insured customers found Surgeo and called us, frustrated that nobody, including their doctors and insurance companies, gave them simple answers. They wanted to know their out-of-pocket costs, without which they were not going to move ahead with surgery.
The team wanted to help. It looked for but could not find a plug-and-play software utility that would provide customers with their out-of-pocket costs. That's when Snapshot, another software application, was born, to give customers their comprehensive, personalized out-of-pocket cost in real time. This application is unique and represents a very rare opportunity to make a monumental difference in the lives of American surgery shoppers. It is the company's number one priority.
Allevion was born of necessity. It was born in the quest to deliver value to a market screaming for it. The path that followed led Allevion to contend also with price opacity and challenges related not to value, but to convenience. As of this moment, the company intends to pursue its opportunities in convenience.
The company recognizes that, in pursuing convenience, it will open unique flood gates of real-time and very granular demand data. These demand triggers, like that of the patient form Oregon, form the data analytical basis for everything from healthcare resource allocation to dynamic, real-time network optimization, the kind that will bring $600BB in savings every year.
Ultimately, we envision an optimized surgical ecosystem, one that spans from the patient seeking to know his out-of-pocket cost to the drone operator delivering the implant to the right hospital at the right time for the right surgeon.
We believe in value and convenience. We know how to make those real.