This five-year-old startup helps U.S. health care providers get payment from patients by making the experience less unpleasant
The subject of this article may make you angry or nervous: Paying hospital bills.
But before you click away from this page, consider for a moment that paying bills can be fun. Well, at least getting your bills out of the way can be fun, because procrastination is self-sabotaging.
Israeli startup Simplee attempts to solve the pain point of procrastination by making it as enjoyable and effortless as possible for Americans to pay their hospital bills. In doing so, they reduce the number of bills that go to collection, a highly unpleasant experience for all involved. They also address the challenges of health care providers, who currently have to send an average of 2.7 paper letters in the mail before getting paid, according to Simplee’s CTO and Co-Founder Tom Tsarfati, who sat down with Geektime at a Tel Aviv café recently.
Reducing the number of steps
Tsarfati explains that there are two trends that Simplee is trying to disrupt. First there’s the fact that hospital billing is so complicated.
“When you go into a hospital, you can get two, three or four different bills. You get an EOB, or explanation of benefits from your insurance, an EOB from your secondary insurance and a bill from your medical provider. This can happen weeks after you’ve been in the hospital.”
But what exacerbates the problem further is that insurance plans in the U.S. are covering less while out-of-pocket costs for the patient are growing. Tsarfati says it is not unusual for a family of four to pay $4,000 a year in out-of-pocket medical costs, and that’s if they are fully insured.
Simplee’s paying clients are hospitals and health care providers who find it increasingly difficult to get paid by individual patients after receiving partial payment from insurance. Typically, an American patient will pay a small amount during their initial visit, wait a few weeks, then get a bill for the remainder of what insurance did not pay. This is where things get painful for both the patient and health care provider.
“More than 10 percent of patients don’t pay at all,” explains Tsarfati. “We don’t see ourselves as someone who helps you get unpaid bills paid. We want to make it easier for those who want to pay.”
To that end, Simplee creates bills that are very colorful and laid out in a logical, intuitive manner. All your bills are in a single place and Simplee sends you emails and text messages with URL codes to help you access your patient information. The paper bills they send have QR codes, and you don’t even have to remember a password, as Simplee asks you a personal question instead.
“You’re happy because you understand your bill,” says Tsarfati.
What causes procrastination?
According to Tim Pychyl, a procrastination researcher at Carleton University in Ottawa, Canada, a person’s propensity to procrastinate is tied to how aversive a task is to them. The most aversive tasks tend to be boring, frustrating, difficult, lack personal meaning and intrinsic rewards, be ambiguous (meaning you’re not sure how to do it) and unstructured. All of these adjectives describe paying an expensive medical bill you don’t understand, which explains why hospitals struggle to get money out of patients.
If you conduct an Internet search for “paying hospital bills,” you get lots of sites asserting that these bills are too high or that you simply shouldn’t pay. Indeed, it is a time-honored American tradition to negotiate your medical bills down to a more reasonable amount. Health care providers do not come off as the good guys in public perception.
But in this face-off, Simplee is in the corner of their clients, the health care providers.
“Our market is large medical providers,” Tsarfati asserts.
Even for those health care providers that have online payment, the percentage of patients who pay online is 6-7 percent, says Tsarfati. This means the providers have to spend a lot of money on call center agents to answer the phone and employees to open envelopes with checks and mail payment reminders.
“We reached 40-60 percent unaided payment three months into deployment.” For those out of the loop, unaided payment means that the patient does it by themselves online, with no human intervention. This is the holy grail of healthcare providers.
Simplee currently processes over $1 million in hospital bills per day and has raised $17.8 million in funding. The company was founded in 2010 by Tom Tsarfati, Roberto Rabinovich and Tomer Shoval. Shoval and Rabinovich both worked at Shopping.com before it was sold to eBay in 2005.
“They have years of experience building good user experience for consumers,” said Tsarfati. The company uses machine learning to figure out how much a procedure should cost on average and will provide this as a service that providers can offer to patients. Simplee also lets you divide your fee into payments, and may let you negotiate your bills online in the future.
The company has 20 employees in the U.S. and 20 in Israel, where they are looking for full-stack programmers for their R&D center.
“We are looking for coders who know Rails or want to learn,” says Shelly Kantarovsky, the company’s HR Manager.
Simplee earns money by charging health care providers a small commission on paid bills. Providers are happy to pay this, because it still saves them money.
“We save our clients a lot of money,” claims Tsarfati.