When Moni Milchman’s sister went to the hospital for a relatively routine procedure, to everyone’s shock, she died from a post-operation complication.
Already working to build new hospitals throughout Europe, Israeli-Belgian Milchman rebounded with a resolve to create a way for people to find the best hospital to perform any kind of procedure. He wanted to include information on potential surgery risks, where the best hospitals around the world were for various kinds of operations, and cost, among other things.
This is how ARCHIMEDICX was born, the new search engine to find the world’s best hospitals.
“The problem today with medical is you have no place to go and say this is the budget I have available, the language I want to speak and the food I want to eat,” Chief Marketing Officer Guy Klajman says to Geektime.
Since launching in September and with almost no marketing, the platform already boasts 30,000 users. It is not surprising that a medical information platform would score high on Google: according to comScore data from 2011, about 100 million people residing in the U.S. search for health related matters each month, a figure that has likely risen since and is undoubtedly high across the globe. It also helps that there is no mass database online that has the targeted sophistication of Archimedicx, with competition that is scattered and mostly local.
No pay to play
To make the search engine reliable, the team needed to consider the most important elements of each locale. How much weight do you give to location, or cost, or recurrence rates? Those were all major questions that took the company quite a bit of time to answer.
“It took a year and a half to come up with a methodology to compare hospitals, certain data elements that have direct impacts on the procedure,” Klajman reflects. “For instance, comparing infection rates of different hospitals.”
They also don’t rank by the hospital or even the department, but by the procedure itself. In Krajman’s words, “I don’t care about the general rankings or in cancer if I need a knee replacement.”
The engine is still in the maternity ward: It covers 300 hospitals worldwide in 20 countries while it aspires to index the top 1,000 facilities for each procedure in its database. They hope to hit that initial goal by the end of 2016.
But they’ve already got one acquisition under their belts: staff from Quomeda, which specializes in healthcare data retrieval, works as part of their team.
What might make its business tough is the objectivity: It does not charge a fee to be included in the search listings. You will be there no matter what, Klajman says in his pitch to hospitals when he meets with their management. The question is if you want to have accurate information while being part of this massive project.
“Our algorithm is a closed box. To be included there is no subscription model or fee. If it is a top hospital according to our algorithm, it will be ranked whether we have a relationship with them or not. There is no bidding system. They need to improve their rates to have an influence on the algorithm; if they acquire new equipment, etc,” he explains.
“We have over 150 signed agreements with top hospitals. This we accomplished without launching our service. They don’t need to pay to be in the system and it is a pure performance-based model.”
An invaluable tool?
Despite not charging hospitals to be included in their search listings, its revenue model seems to be convincing venture capitalists. They plan to ask for referral fees from the hospitals, who have no incentive not to empower the site.
The product is a confidence-inducing powerhouse according to Klajman. After getting off the ground with Milchman’s own resources, an initial funding round brought in American-Israeli angel Ron Zuckerman and Belgian-Israeli investor Robert Taub.
“It was the fastest and easiest capital I have ever raised. We had 25% over-subscription within a month. We raised enough money to operate for at least another year and plan to do another significant round in the middle of 2016 targeting a 9-digit valuation as opposed to 8-digit.”
Still, the fees in their business model won’t fly everywhere. The U.S., for example, sees those sorts of referral payments as illegal. So for the United States, the users will have to pay to go through the system.
But what’s stopping them from flying off the handle and booking their surgery themselves?
“This is the same model as other booking sites,” says Klajman. It’s the Priceline negotiator, but for elective medical procedures. “The prices there are exclusive and more convenient. So are ours.”
And will Americans pay? Abso-freaking-lutely, according to Klajman. With the cost of operations in the U.S. astronomically high even after insurance coverage, the main angle for ARCHIMEDICX in the U.S. will be as a search engine for price comparison. The reasons for using the site and booking operations in exotic locations also vary from country to country.
“What we do compared to other facilitators of medical tourism is we don’t send them to a specific hospital. In Africa, more than 2 million travel abroad for better treatment. A million in the U.S. go abroad to save money. People in the UK travel abroad because the waiting time for operations is so long.”
For now, the search database is limited to just over 360 elective procedures (that doesn’t preclude life-saving surgeries) covering the gamut from knee replacements to implants to in-vitro. That could change in the future though.
ARCHIMEDICX was founded in 2014 by CEO Moni Milchman. The company has 30 full-time employees scattered across its headquarters in Brussels, an R&D branch in Israel, and offices in Riga, Latvia and Delaware. Their algorithm has been certified by HIMSS Europe. The company completed a second investment round recently worth several million dollars after being launched with Milchman’s own resources.
For more information about ARCHIMEDICX, watch this video: