MedPilot’s Jake Myers, CEO and Nathan Spoden, COO talk about how experience and having the right team paves the way to creating a successful startup, and what MedPilot’s focus on the consumer means for the future of healthcare digitization. VGV invested in MedPilot in December 2018.
How did you both get involved in the healthcare industry?
Jake: Nate and I have somewhat of a shared background. We met after college at the healthcare consulting company we worked for at the time. We were the younger guys on the team, and both new to healthcare. We were put on the project that was buying healthcare entities that were going bankrupt or that were having difficulties, and then the consulting group would go in and restructure the operation.
I spent about 5 years with that company before going off to start MedPilot. I learned a lot about revenue cycles, billing, and patient experience while I was working with healthcare-related vendors and new software. That's what triggered starting MedPilot, just seeing the need in the market where patient experience could ride the wave of consumerism. Once I left, Nate actually got a few more years experience, then I lured him back because he was the perfect person with great experience.
Nate: To give a brief summary of myself, like Jake said we both worked together at the boutique consulting firm with private equity. We were the lead restructuring team, and we were doing everything from operational restructuring to training new staff, so our main focus was really about revenue cycles and management. I worked with a former consultant and him and I built a process management system from the ground up, which is essentially the operating system for healthcare providers. It included patient accounting, records, etc. We built that with a few developers and from there went back to work with a big consulting firm. We worked with their revenue cycle department in their New York City office; basically we went in and looked at their revenue cycle and helped with their general strategy as a whole. One thing I noticed was that no one was focusing on patient billing, it was kind of an afterthought. Patient portals were coming out, but no one was really using them. We wanted to really improve the process of patient billing. That’s when Jake came to me, and brought me to MedPilot.
Jake, how did you take the leap from a consulting company straight into creating a startup?
I think the influence was that I was someone who was younger, untrained in a new market, so I got a really fresh look at how healthcare is this huge market, the revenue cycle is huge, and there’s so many opportunities within it but it’s a little behind compared to other industries. I think being in that market for 5 years, learning everything about it, it was clear through everyone I was working with that there were just a lot opportunities to be had. Then the time came where I had an expertise within the market, and I knew I wanted to do something with it.
The next phase was finding the right team to do it with. After launching the company in NYC, I knew that having the right people, the right team, was super important. So, partnering with my co-founders was the best, they were just a very good fit. Matt [Buder Shapiro] isn't on this call but has a background with direct marketing and customer engagement, which a lot of our software series are built off of. Nate has the expertise in product management, revenue cycle, and so those pieces are perfect. Building the right team and partners is the biggest accomplishment we did early on, so we really set ourselves up well which has made it easier.
Can you tell me a bit about your technology and how it works?
Nate: We built, for lack of a better term, a CRM. We partner with healthcare providers, practice management systems, and medical billing companies, to help either add to their patient billing process, or to take over their entire patient billing process. Today in the market most healthcare providers are sending paper statements to patients. These are very costly on average, about 65 cents for a 1 page statement. If people don’t pay their bills, they decide whether or not to send to debt collection. What we do is take a strong patient–centered approach instead, and we use our CRM system to call, text and email patients about their medical bills, and we can either use our US based customer support team, if need be, or we can plug our technology into an existing healthcare provider’s existing system. So, in essence, enhancing what they're’ already doing, or existing on top of their billing process.
So we collect info from the companies, patient demographic, insurance information, we set that up to come to us instantaneously, and use that to determine with whom we should be engaging. So when we start engaging with patients, we are learning from them, and we take what works best and keep plugging it back into our software. To put it simply, we set up our system to get smarter as time goes on, as we start to work with a specific patient population. For example, we see one person is opening text messages at a certain time and we see those texts have a certain tone, so we plug that success data back into our system and through AI can continuously make our product smarter. It learns what form to engage with a person, what time, and what tone to use in that engagement. We can also do two-way text or email communication. We create a lot more efficiency and savings because while paper statements are very costly, email and text message costs are a fraction of a cent. We are creating efficiency, and are getting people to pay their bills because we are engaging with them in a way they are used to, and also learning how they like to be engaged with. So we can build on the understanding of how to work with a certain patient population.
Have you conducted any case studies which have given quantitative results for cost savings, faster billing-to-payment time or increased engagement?
Jake: We’ve done some case studies which have shown the cost savings to be about 10-15 percent, based off of case studies where we have been live with clients for a little over a year. It’s been easier to build our successes through this. Another metric of success we measure is when there is an increase in patient revenue for that client, we record where and how we are showing that cost increase, which then decreases time and cost effort for the client. When we study a client before using us and after, we notice that the time savings of how long it takes patients to pay their bills can be about a 20 day decrease. That’s a big factor for clients, as most are businesses and that cash flow is a really big deal to them. Getting revenue in the door faster for them is really vital. The last thing we focus on is patient satisfaction, everyone knows how frustrating healthcare billing can be. A patient has the ability to choose new doctors, choose a surgery center or walk in center, based off of preferences or experiences. A lot of these providers are spending a lot on marketing and branding to get customers through the door. So every part of that patient experience is all a part of whether they make good reviews. So for us to help clients reach good customer satisfaction and retain that customer is important, especially if we are the ones speaking with that customer. Patient billing is becoming a huge spotlight. It’s not all about collecting money, it’s also really about overall patient experience and satisfaction.
Can you walk me through how your technology would work from the time a client bills ?
Jake: So once that bill is submitted, we get a notice that the insurance company has paid their portion, then we initiate our process of texts, emails, or calls, to see if they have any questions. A lot of this process helps catch mistakes as well, because there’s sometimes mistakes being made in the insurance billing process, and so whether they’ve misspelled a name, insurance number, etc, when we communicate with the patient we collect that data and can give it to the insurance company, and our core software just manages their information. We are in constant communication with the client and their insurance billing department. We get notices whether insurance pays their portion or not. So we are the main ones gathering information, then making the most efficient move on having the patient pay, or correcting or providing information that would go back to the insurance department. So we do whatever we can to assist the provider to get the job done.
What challenges come along with building something that integrates into the healthcare industry?
Jake: We’ve had a few challenges so far. For me, a huge challenge of getting off the ground was that healthcare is a bit behind in innovation and technology. First starting on MedPilot, the biggest challenge was getting healthcare providers to take the risk of working with a startup. That’s never the easiest thing. Even if the idea of the company is great, when it comes down to making a decision, working with a young company is never easiest. It’s a little nerve wracking. That was a big hurdle, but Nate and I relied on our backgrounds and expertise to earn the trust of our early stage clients. Between us that helped a lot, having the background we do. It helped us get through those early stage clients. Fortunately we were able to get a good group of clients under our belt, and we got through that part. We are also lucky that a few industry trends are very focused on what MedPilot does. When you go to healthcare conferences, these trends of consumerism, patient revenue and engagement, that are leading the healthcare discussion in 2018-2019, we’re lucky that our company aligns with what's being talked about, versus the hard work we were putting in back in 2016-2017 when no one was really talking about those things.
Nate: Yes I agree, I think the only other big challenge we faced, even though more responsibility is being moved over to the patient themselves, healthcare providers are still learning that they need to do something different. And I think that getting through that is a challenge, because the market is slow to change, and providers don’t know all the options to start progressing in that direction. So when they hear about us, it really just makes sense for them. I think it’s an easy sell in some regards because the process makes sense, but it’s getting over that hurdle of “Okay, is this what I should be doing?” because it's really a new trend in the market, engaging with patients this way. Providers are weary of new things like a startup, and adding on AI learning is just a brand new concept that people are just starting to understand the value of; it’s just crossing that bridge of the idea of this market becoming more mainstream.
And what comes to my mind is back when providers were starting to make the transition from paper medical records to digital ones, kind of the same concept of hesitation...
Exactly, now we’re digitizing everything and this is kind of building that next layer, the AI layer, which is more modern and mainstream. People are still getting used to digital medical records let alone engagement technology for their patient population.
How do you deal with patient retention after already further engaging them in the billing process?
So we do offer engagement that deals with marketing survey purposes. We track every event with a patient and any action that patient takes on. So we are continuously learning how they use our system. We are automatically creating preferences for the patient, if you will, so whether it’s the same patient for a new provider or a provider now wants to market to that patient or send surveys to that patient, we’ve already learned the best way to optimize getting in touch with that person, so we can just build on that knowledge base continuously.