Do you find keeping track of medical bills to be a huge hassle? You’re not alone; in a recent survey of the users of my recently-launched health care financial site, Simplee, 32% said that their main system for organising their health-related paperwork was “no system at all.”
And yet this category of expense is one that is becoming ever more important; the 2010 Milliman Medical Index says that the amount families paid out of pocket increased 50% in the past five years and now stands at over $3,000. This figure is only set to go up as companies look to cut costs further by offering more high-deductible health plans, which require members to foot the first $1,000 or more of their annual health care expenses before plan coverage begins.
A big part of the problem is that high-deductible plans were introduced with the idea that having families bear more of the cost of their care would turn them into discerning consumers who would negotiate and bring prices down. However, while the Internet has helped people become savvy shoppers on everything from car loans to houses, the consumer tools in health care really haven’t kept up.
I started Simplee after my daughter got sick and spent time in the hospital. I found I could not figure out what was coming from the insurance company, what was coming from the doctor, and how they matched up. I couldn’t figure out what I needed to pay and what had been paid already. I thought there really had to be a better way to deal with it.
The first step, I felt, was to create something that would explain to people in crystal clear language what they owed and why. We built something that shows users what their provider charged, what their insurance covered, and what they owed, and we’ve gotten a lot of feedback that this is the first time they’ve ever really understood that stuff.
We also heard from users that we needed a summary of expenses to help them plan how much they should put into tax-free savings accounts to cover spending. A lot of people with high-deductible plans have health savings accounts (HSAs) or flexible spending accounts (FSAs), and the only way to track how much you were spending was pretty much manually. This shows people right away what their spending patterns are so they know how much they should be setting aside.
A third feature, launched just last week, might appeal to doctors as well as to their patients: it allows people to pay their medical bills online. According to a report from research firm Celent, collections rates for doctors are only around 50%. However, our research shows that people ignore the bills not because they are deadbeats, but because they are confused about what they owe and to whom. By explaining things clearly and making it simple, we are eliminating that barrier. We’ve had people paying bills that were months old because now it’s easy.
But will people really want to let virtual strangers access their health information? We understand that some people might have concerns, so security is a top priority for us. Our data is encrypted, and all our staff are trained in the security measures required by the Health Insurance Portability and Accountability Act (HIPAA). We are also committed to never sharing users’ data with third parties.
As for the future plans for the site: people will spend two hours trying to save $50 on a digital camera, but when it comes to getting a root canal or a physical therapy treatment they just pay whatever they are asked. We want to be able to give people more control over what they spend on health care. Buying insurance is another area where users ask for a lot of help; knowing what people’s usage history is like will help make plan recommendations much, much easier. The health care market is so broken right now, so—perhaps unfortunately— there’s a lot of opportunity out there.