Every year, about two months before April 15, my husband and I prepare our taxes, before we send them to our accountant. This requires us to calculate our bills, such as medical payments we made in the prior year. For these payments, I count up the receipts while at the same time call the medical providers for records of what we paid in the prior year, just so the figures are in sync. As you can imagine, or maybe relate, it's a lot of paperwork and invoices to collect, file and go through every year.
But this year, I'm going to try Simplee, a new free service to consumers, which manages all those invoices, and allows users to pay bills from the site as well. In other words, it simplifies the management of medical bills. Based on my challenges, it's an idea worth backing.
Simplee announced Tuesday morning that it raised $6 million in a Series A round of financing from the Social+Capital Partnership, a relatively new fund started by Chamath Palihapitiya, who was an executive at Facebook and AOL, and also a venture capitalist at Mayfield, before launching his own venture firm. Also joining were existing investors seed investors Greylock Partners and angels, such as Palihapitya and Lorrie Norington, former President of eBay Marketplace. Simplee raised a seed round of $1.8 million in the summer of 2010.
"Our core focus is managing and tracking bills," said Tomer Shoval, CEO and founder, in an interivew with me. "We cross reference [insurance] plans with specific bills."
Basically, consumers can go to Simplee and input their medical insurance information and their HSA accounts. Right now, Simplee covers about 80% of the medical insurance providers, such as Blue Shield. Simplee doesn't have to have relationships with these providers, but it can access their database once a consumer inputs their account information into Simplee.
Once a consumer goes to a doctor, the doctor will submit the bill to the insurance company. Simplee then sees that information from the insurance company database and makes it visible to the Simplee member, and alerts them to make the payment. If a Simplee member has also submitted her/his HSA account information, that person can make a payment through Simplee, or a credit card (a PayPal option will be added in the future).
This consolidation of information makes it super easy for a consumer to manage their payments from one dashboard, as opposed to one HSA dashboard (which requires login information that's probably often forgotten, if you're like me) and folders to organize the invoices.
"Our vision is we can integrate with different medical providers and stop sending paper invoices that gets you frustrated and confused," said Shoval. Indeed, I have a bunch of invoices. And while not so confusing, it's frustrating to organize them and I'm all for a simpler alternative.
Simplee has been open for business in a little over a year. While Shoval would not give specifics on how many members Simplee has accumulated, he did say that the company is already tracking half-a-billion dollars in healthcare expenditure, more than 65% of users are returning and the average Simplee user has paid about $1000 a year in medical bills.
Economics of Simplee
To use the service, a consumer doesn't pay a subscription, rather Simplee's model is to charge companies, HSA banks and administrators of FSA (flexible spending accounts) or HRA (health reimbursement arrangement) to use the Simplee service on a per member, per month basis. Shoval would not disclose how much such clients would pay, only to say that Simplee plans to announce a number of them in the coming weeks. He also said that the average employee costs about $10,000 a year in medical expense for employers. He implied that the Simplee expense would be a nominal cost relative to that outlay, but a significant potential savings in a world of spiraling-out-of-control healthcare costs.
Right now, self-insured employers (those with 1,000-plus employees) spend about $800 billion a year on healthcare, said Shoval, quoting a stat from a report put together by The Kaiser Family Foundation. And, those costs continue to rise, he said. For instance, the amount of out-of-pocket medical expenses for the average American was $3600 annually in 2011, up from $2000 in 2006, said Shoval.
By giving employees the tools to better understand and manage their medical bills, consumers will likely be better stewards of their own medical bills and start making different choices that may ultimately lower the costs of healthcare in general, Shoval explained.
Indeed, if Simplee can "utlimately" do this - because as of yet, they're more of a management tool (and that doesn't help a consumer reduce their actual medical claims, but rather to organize them) - their value proposition will increase.
And, it's only a matter of time. Shortly, Simplee will be introducing a new feature that can track billing errors. "There are many medical billing errors that cause people to lose a lot of money," he said. "We not only allow people to efficiently handle their bills, we can flag errors that can save them money." Additionally, Simplee hopes to be able to collect enough information to suggest different plans, based on a person's medical history. Again, this could be a potential cost savings to the consumer.
In a sign that healthcare management is big business, Simplee's fundraising comes in the same month Castlight Health raised $100 million. Castlelight provides a way for consumers and employers to manage healthcare costs .
(Image source: thedebtdefier)