Medical billing is a largely untapped and lucrative industry, potentially pulling in $55 billion globally by 2020. But it’s inner workings are still very murky — most of the time it’s not clear how much something will cost and sometimes you don’t even get the (possibly whopping) bill until months down the road. Founder Katelyn Gleason wants to make it easier to know what and how much you are paying for before you step into the doctor’s office with her new medical billing #startup Eligible.
Gleason has been through Y Combinator twice (once for DrChrono and once for Eligible) and raised $25 million from a syndicate of investors like Angellist’s Naval Ravikant, Reddit’s Steve Huffman, Dropbox founder Drew Houston and others so far. But, unlike many founders in the health startup field, she didn’t start out in medicine and never went to business school.
Instead, she was a New York City stage actor who put herself through state university working as a sales rep and waiting tables. Gleason soon wound up working 90+ hour weeks as the top sales rep for DrChrono when the electronic health records company first came onto the tech scene in 2010.
Chaotic as it was in those early days, Gleason wanted to launch something of her own and saw the need to reform medical billing. While electronic medical claims processing is nothing new, the system has been stuck in a cloudless, pre-data sharing era.
That means when a patient is at the doctor’s office and a doctor recommends a certain specialist, there’s no way to know if the patient’s healthcare covers the recommended specialist or what the final bill will be. There’s also no way to find out if there’s a more cost-effective treatment option covered within the same insurance plan. You’re basically in the dark and it leaves the doctor potentially not getting all the money owed and patients left with staggering medical debt.
Eligible integrates with medical systems like the Cleveland Clinic or One Medical and Quest Labs to tell you not only how much the procedure costs but what your co-pay will be and offers you a way to pay without waiting months for the bill total. According to Gleason, doctors routinely collect 50 percent more revenue per month using Eligible, since they’re not stuck trying to collect bills after patients leave the office.
Other startups like Simplee and iVinci are also working to modernize medical billing, but Eligible actually built the backbone for a lot of these consumer-facing startups and lets them use its API to unlock pricing data for patients in the same way e-commerce companies might use Stripe for payment processing. Legacy clearinghouses like Change Healthcare (formerly Emdeon) also serve more or less the same purpose but run on more ancient technology to create a billing workflow.
Eligible, which Gleason tells us has been profitable for more than a year now, makes its money on each of those payments, taking in five cents per transaction, with most of the revenue coming from insurance companies.
Gleason also says Eligible is also on a growth trajectory with about 14 million transactions per month currently and an expected 50 million transactions per month by the end of the year. Meanwhile, she’s busy hiring in the data science and engineering departments and, following a strong trend in the health tech field, the company just released an AI bot named Ellie to make it easier for customers to ask questions about their bills.