Everything I Need to Know About Cryonics I Learned in Kindergarten Local cryonics groups have a checkered history of fits and starts, of good intentions gone awry, of high hopes cruelly dashed. It's not just that there isn't enough money. Not enough people are cooperating or playing fair. The Service Gap in the Hinterlands. Because cryonics in the United States is an infant industry with a market of 400 or so suspension members nation-wide, it suffers from terrible diseconomies of scale. 400 widely scattered cryonicists can support only so much investment in cryonics technology and expertise. The compromise adopted by the national cryonics organizations offering cryonic suspension services is to perform the first phase of a suspension -- on-site stabilization -- with a mobile team, and the second phase -- cooldown, perfusion, and storage -- at a home base. To minimize warm ischemia and maximize the patient's chances for recovery to life and health, a stabilization kit and trained personnel are needed on-site when the patient deanimates. For a patient deaminating far from the home base, sufficient notice of the impending deanimation is needed; otherwise the mobile team and its kit won't get there in time. Should the national organizations invest in on-site stabilization technology and expertise to ensure reliable, rapid-response stabilization service? The initial costs of stabilization equipment, supplies, medication, perfusate (organ preservation solution), and training can reach $20,000. Recurring costs (including replacing expired perfusate and medications) are on the order of $4,000 or $5,000 per year. However, if perfusate and medications are financed from suspension fees rather than expiring, annual unfunded costs are reduced to $1,000 or so per year. With a local kit and expertise in place, a national organization can save thousands of dollars, primarily in equipment air freight and the mobile team's air fares. For example, a national organization in the West saves about $4,000 per cryonic suspension in the East if two mobile team members and all stabilization equipment and materials stay home. The national organization can save additional dollars if there is a "false alarm." The national organization has no financial incentive to acquire and maintain a local presence until the deanimation rate among its suspension members in the locale is so high that the annual savings outweigh the initial and recurring costs. In the East, the deanimation rate would have to be one and one-half or two persons per year. In other locales closer to the home bases, the savings are less, and an even higher deanimation rate is required. The service gap is widened where competing national organizations have split the local suspension membership. Bridging the Service Gap. To bridge this gap, local cryonics organizations in the hinterlands have to provide local stabilization technology and expertise themselves. They have to drive down initial and recurring costs, find ways to finance those costs, and recruit additional suspension members. The local organizations need not provide full stabilization services. For instance, a local organization could acquire and maintain all necessary equipment and supplies, train all personnel needed for standby and "initial stabilization," and rely on the national organization's perfusionist to fly in and lead the local team in "total body washout," which follows initial stabilization. Cost reduction, service improvement, and membership growth are mutually reinforcing, and should be pursued concurrently. Cost reduction creates the opportunity for additional investment in service improvements. Effectively advertising service improvements attracts new suspension members. Membership growth leads to economies of scale: as the number of suspension members in an area increases, the cost of providing given technology and expertise also increases, but not as quickly, and costs that are indivisible do not change at all. Economies of Scale from Regional Cooperation. Two forms of cooperation create economies of scale that accelerate the cycle of cost reduction, service improvement, and membership growth. The first form of cooperation is among cryonicists in a region. Certain services can be regionalized through inter-local agreements, the expansion of an existing organization, or the creation of a new organization. Tapping a regional membership base in this manner creates two economies of scale. The first type of economy is more effective use of, and greater continuity in, leadership, talent, and stabilization expertise. A larger group would be less vulnerable to fits and starts brought about by deanimations and changes in personal status. The second type of economy is a decline in the cost of service per suspension member. The Northeast offers an example. Cryonics groups in New York, Boston, and Washington, D.C. have operated independently up to now. Without regional cooperation, each group needs a complete kit, which includes a package for initial stabilization and a package for total body washout, including perfusate. With regional cooperation, three initial stabilization packages might still be needed, but the entire region could get by with a single total body washout package and pagers or some other emergency notification system. The Life Extension Society has suggested the creation of a company, the Cryonic Rescue Service, as a means to institutionalize regional cooperation in the Northeast. Economies of Scale from Perfusate Rotation. The second form of cooperation is rotating perfusate among national and local cryonics organizations. The purpose of perfusate rotation is to ensure that all supplies held by cryonics organizations are used, thereby reducing perfusate cost and increasing perfusate availability. At a cost of $2,500 and with a shelf life of only one year, a perfusate supply is too precious to waste. Let's use an example. Each of two national organizations performs two suspensions per year, for a total of four suspensions per year. The shelf life of new, improved perfusate is two years. Using the equation INVENTORY = DEANIMATION RATE x SHELF LIFE the maximum inventory of perfusate supplies is eight. Each national organization could keep a supply for its mobile team to use, and up to six local organizations could keep supplies on hand as part of their service. An independent organization would operate the rotation network. The perfusate supplied would meet the specifications of both national organizations. The supplies closest to expiration would be rotated to the most frequent users. Immediately after a stabilization by a frequent user, an infrequent user would overnight mail its supply to the frequent user on dry ice, at a cost of about $150. The network operator would replace the infrequent user's supply within a few days. In this example, perfusate rotation prevents three supplies per year from being wasted. Total cost, including the cost of overnight delivery, is cut by one-third or more, depending on perfusate cost, and a new supply is just an overnight package away. Savings and the availability of perfusate would increase with an increase in the deanimation rate nation-wide. Perfusate rotation will continue to make sense unless the cost of perfusate drops dramatically. Fairness in Financing Initial Costs. Cryonicists far from the national organizations' home bases have an incentive to invest in stabilization technology and expertise long before a national organization would find it feasible to do so. On the other hand, national cryonics organizations save when local organizations provide stabilization services. A way must be found to equitably share the initial and recurring costs of local stabilization services. To finance initial costs, a local organization must rely largely on living suspension members. One problem is that some members seek to obtain a "free ride," that is, to benefit from others' investment of time and money. However, with so much at stake, a local group is loath to withhold service from the free riders, so free ridership persists. By maximizing the participation rate among living cryonicists, a local organization can reduce the cost per participant, contain the free rider problem, and maximize investment. The key to widespread participation is to give investors something for their money and/or enable investors to liquidate their investments. One mechanism for obtaining widespread participation is the sale of shares in a stock corporation owned and controlled by local cryonicists. Purchase of shares brings ownership and voting rights. An investor may liquidate the investment by selling his shares. The local organization may desire to limit shares per person in order to maximize participation and minimize inequities. The Life Extension Society has suggested the creation of one such company, the Cryonic Rescue Service, to finance and provide stabilization services in the Northeast. Fairness in Financing Stabilization Readiness. Where a local organization has developed rapid-response stabilization services, a national cryonics organization will agree readily to pay for the replacement of supplies, medications, and perfusate consumed during a stabilization. (It also will contract with individuals for their services during standby and stabilization.) Simply replacing consumed materials is not enough, for two reasons. First, the fixed, recurring costs of local stabilization services are ignored. These costs include the costs of replacing obsolete durable equipment, replacing expired perfusate and medications, retraining, and administration. Without a stable funding source for recurring costs, a local organization will suffer a financial hemorrhage and die. Second, a national organization's savings in suspension costs (air freight, air fare, patient shipment, etc.) that are created by the availability of local stabilization services are ignored. At the expense of local cryonicists, the savings accrue as a windfall to the national organization, the suspended patients, suspension members in the area, or suspension members nationwide, depending on whether and how the savings are reflected in the national organization's fees. Most revenue sources that a local organization might explore are unreliable or unfair. For instance, contributions are unreliable. If suspension members are charged annual local readiness fees or patients are charged one-time local stabilization fees, the members or patients simply are sharing the pain (or seeking a free ride) while the national organizations retain their windfalls. The fair thing to do in this circumstance is to pass the savings through to the local organization, not to keep the savings or pass the savings through to patients or suspension members. The pass-through could be in the form of an equipment rental fee. Presumably the national organizations would rather pay after stabilizations take place (since that is when the savings are realized) than pay an annual readiness fee. With a contract or contracts in-hand for savings pass-through, the local organization can assure prospective local investors that it will be able to stanch the financial hemorrhage over time, thereby triggering the cycle of service improvement, membership growth, and cost reduction. Savings pass-through seems to be a "wash" at best for each national organization. However, each national organization is under competitive pressure to provide the best service possible, and a national organization that fails to contract with a local organization to offer rapid-response stabilization service may lose market share in that locale. Fairness in Pricing of Suspension Services. As things currently stand, each national organization charges uniform prices across the Nation for cryonics suspension services. Since far-off services cost more in air freight, air fares, and patient shipment, among other things, this practice creates cross-subsidies between nearby locales and far-off locales, with the national organization making money in nearby locales and losing money in far-off locales. In locales where one is losing money, it is tempting to cut corners or take risks that adversely affect the quality of service. If cost differences were reflected in suspension fees, the fees for far-off suspension members would rise and the fees for nearby suspension members would fall. Cost-based pricing eliminates cross-subsidies and the temptation to cut the quality of service in far-off locales. All other things being equal, a national organization that adopts cost-based pricing plus pass-through of savings is able to enhance its competitive position by reducing the price of suspensions in nearby locales and by improving the quality of stabilizations in far-off locales, where quality of service is a key consideration. A New Model for Local Stabilization Services. Local cryonicists have an incentive to invest in acquiring and maintaining stabilization technology and expertise long before a national organization would find it feasible to do so. They can drive costs down and maximize investment and membership growth through the economies of regional cooperation and cooperative perfusate rotation. They can distribute initial costs equitably through the sale of shares in a local, cryonicist-owned company. They can reach agreements with national organizations to repay the costs of materials used in stabilizations. However, their efforts be wasted if they cannot stanch the financial hemorrhage of recurring costs. For this, they need to capture the savings that the national organizations, their clients, or deanimated patients otherwise would obtain as a windfall from the local investment. For its part, each national organization can enhance its market share and competitive position by pricing its service fairly and passing through cost savings to the local organizations that create the savings. It all seems so clear now. To succeed in saving lives, we need to cooperate with each other and to play fair. Everything I need to know about cryonics I learned in kindergarten.