AlloDirect Founder and CEO Rhett Barker discusses the company’s novel AI-enabled digital platform for sourcing allografts and improving the ASC supply chain in an interview with SmartTRAK.
AlloDirect has developed an AI-enabled digital procurement platform that enables ambulatory surgery centers (ASCs) to source allografts directly from tissue banks while streamlining ordering, inventory visibility, and compliance workflows. In an interview with SmartTRAK, AlloDirect Founder and CEO Rhett Barker discusses the platform's development, early pilot results, and its potential to improve efficiency and reduce costs across the healthcare supply chain.
To listen to the interview, click on the following video (19:28 min). A link to download a complete transcript of the interview is also provided below.
Interview Transcript
SmartTRAK: Hey everyone, this is Nick. I am the ASC analyst with SmartTRAK. I'm here with Rhett Barker. He is the founder and CEO of AlloDirect, a Chicago-based healthcare supply chain startup that is creating and operating an AI-enabled B2B digital procurement platform that connects ambulatory surgery centers directly to certified tissue banks for allograft sourcing. Rhett, how are you this morning and thank you for being here.
Rhett Barker: Yeah, thanks for having us, Nick. I am rocking and rolling, and thank you for the intro. It sounds like you know the business pretty well already.
Well, I appreciate you being here. I'll get right into it.
Your background is great. It's fascinating. It looks like you spent time in the trenches doing med sales for Zimmer Biomet in the foot and ankle space before moving to the startup world with an EV company and now founding AlloDirect.
How did carrying a bag for a major orthopedic manufacturer shape your understanding of the supply chain? And what was the specific aha moment that made you realize the allograft procurement model was broken?
RB: Yeah, so getting into Zimmer Biomet actually started a little bit before that when I was at college. I actually had a startup. So I started a company at Ball State that we scaled, won a couple pitch competitions. It was actually in the car management space. We would do tire changing, oil changing, car detailing onsite, totally different industry. It was when Uber and Lyft and the whole on demand economy were really taking off. And I basically asked the question, why would you have any car maintenance done after you leave work? Why would you not just have that done while you're at work? So we went and signed partnerships with Eli Lilly, Rolls-Royce, a bunch of large employers in Indianapolis, got the largest parking garage management group in the Midwest to sign a deal with us. And that was three months before COVID hit. So to make a long story short, so that impacted our business.
We still had enough business going on to pay our contractors and our team members, but not enough to pay me really anything. So three or four months out of school and that happening, I kind of said, All right, why don't you go find a job? And that was Zimmer Biomet Foot and Ankle. And so I kind of say that the cloth that I'm cut from is more so in the entrepreneurial space. I would say I'm more of a challenge to status quo, figure out a better way to do something, find stagnant industries, try to change them. And so I entered orthopedics with that mindset.
I think my first day at Zimmer Biomet, or at least my first day in the operating room, I was like, Wait. So two days in, I just got credentialed and I'm in an operating room. How crazy is that? And that seems like off the bat, something there.
And it's so funny you've seen all these vendor credentialing companies start up and they're all started by X reps. So it's funny, people that have that mindset identify that right away.
As it relates to the supply chain products or more specifically biologics graphs, it was really seeing firsthand that there's a lot of these products that internally, and you know this as a previous rep, it's mailbox money. That's literally what you're instructed by your managers. It's like, Hey, sell this stuff because you don't need to be there, but you're going to make commission on it.
I'm like, Oh, well, that sounds awesome. I want to sell biologics. That means I can go off, not work and make money. Oh my gosh, that's awesome. That really stood out to me from the beginning and on. And it's not just biologics, there's a lot of other products that fall in that bucket too, but you also know how it goes to you either.
There's a lot of cases where you do need to be there. Whether it's you're running instrument trays, you're doing a total ankle with a newer user. There's definitely cases that reps should be in supporting and frankly, the orthopedics world would not operate without reps. So I definitely understood the value that we played and you can see firsthand what makes a great rep a great rep. I always say for every great rep, there's usually about 50 associates that come and go, jump different companies, and I kind of view that as kind of an issue. So I guess to really hone in on your question, it was really seeing why are we taking a process that would make a lot of sense to be direct for manufacturer for certain products and why are we becoming part of the equation? Because I know I'm getting paid the commission.
I know my distributor's making more than that. They're keeping part of that. And Zimmer Biomet, Stryker, all these big manufacturers, they all partner with one or two tissue banks, and that's where the product's actually coming from. So you have Zimmer Biomet who needs to make money, you have the distributorship who has to make money, and you have the rep who has to make money for a broken system that could just be coming directly from the tissue bank. Of course, that took me six years to realize, but that was essentially how it flowed.
So for people that aren't familiar with AlloDirect, and I mean, you guys just raised some funding earlier this year, so it seems like the platform's still being built out. Can you walk us through the business model and what you're trying to do in terms of your solution?
RB: The original thesis for AlloDirect was, Hey, we're going to go aggregate a bunch of tissue bank data. So all these sports med tendons, these different sizes, is it aseptic, non-radiated? How's it processed? What's the fuller of diameter? There's a lot of questions. There's a lot of preferences that surgeons want. In order for that materials manager, when a case gets added to see what's available, there's three hoops that to go through ...
Click the button below to read the rest of the complete transcript of AlloDirect CEO Rhett Barker discussing the company’s novel AI-enabled digital platform for sourcing allografts and improving the ASC supply chain with SmartTRAK's Nick Fitzpatrick, Associate Market Analyst – Orthopedics.
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