A career in financial services, followed by a three-year stint at Watertown-based athenahealth, Rebecca Palm combined her two fields of experience and co-founded CoPatient, the Boston-based startup empowering patients by helping them investigate, understand and save on their medical bills.
Many of us know the feeling. It could be a simple test or a long medical battle with visit after visit, but either way, that bill comes and often times it doesn’t seem to make sense.
How could it cost me that much? I don’t understand this bill. Did I even have that test done? Question after question, but nowhere to get the real answer and nobody to turn to for help. Your best option, unfortunately, is to spend hours on the phone hoping to get some sort of resolution.
The statistics are staggering. According to CoPatient the average amount spent on healthcare in the US each year, per person, is $9,000. Altogehter, consumers spend over $300 billion per year in out of pocket healthcare expenses. And, 80% of the bills CoPatient reviews contain an error.
As if consumers aren’t spending enough money on healthcare, it turns out 80% of the time they’re likely paying more than they should.
With these numbers, “this is an issue that everyone should care deeply about,” Palm (pictured) put it to me.
Palm, who is originally from Chicago where she spent time as a commodities broker, realized a gap in consumer tools for healthcare while she was working in product strategy at athenahealth. “There are plenty of financial tools like Quicken and Charles Schwab, for consumers, but there wasn’t anything in healthcare,” she explained to me.
Palm and Co-Founder, Katie Vahle, took on the challenge and went to work on CoPatient.
CoPatient is an extremely straightforward concept and its technology platform allows it to function seamlessly (and scale).
A consumer with doubts or concerns about their medical bill can visit CoPatient.com and create a basic profile. The platform allows the patient (or caregiver) to upload the bill and provide additional background information.
Once submitted, the case is reviewed and the patient is given a free report informing them of any errors or overcharges on the bill.
If the patient wishes to proceed, they are paired with an “Advocate” who is specialized to fit the needs of the case (medical, legal, accounting, etc.). Through the CoPatient platform, patients can open dialog and discuss the case with the advocate as well as check the status in real-time.
CoPatient is only compensated if and when they are successful in disputing a patient’s bill and the fee is based on the level of success.
Essentially, CoPatient makes it possible for the average consumer to dispute and win medical billing errors. Additionally, peace of mind is provided for patients realizing their bill is actually accurate upon receiving CoPatient’s free report.
Palm had a vision a couple of years ago. She realized an opportunity and discovered a problem that needed solving. Having originated while she was at athenahealth and knowing she’d need support, she turned to her CEO in 2012. Jonathan Bush, athenahealth’s Founder, would become one of Palm’s first investors.
A founder investing in their employee’s new ventures is key to the success and growth of Boston’s startup community and this is an area that Palm tells me Bush has his eye on.
“He put his money where his mouth is. He’s always talked about athenahealth supporting startup activity, and that’s exactly what he did.”
In June of 2014 CoPatient, who was a team of four at that point, raised a $3.6 Million Series A round led by .406 Ventures (Bush returned for this round as well). I caught up with .406 Co-Founder and Managing Director, Liam Donahue, to find out what attracted him and the firm to CoPatient. Excited about this investment, Donahue had quite a bit to share:
"We got excited about CoPatient because it fit several of .406’s investment themes in healthcare:
To begin, we loved the mission of helping consumers, who are increasingly taking responsibility for medical costs, to understand and evaluate medical bills. Historically, large insurance companies employed very sophisticated teams on the front lines of evaluating medical bills and pushing back when they found overcharges and mistakes. These days, the increasingly large number of people with high deductible plans are thrown into the fray and are generally ill-equipped to understand complex medical bills, let alone identify mistakes and/or self-advocate. CoPatient levels this playing field and actually helps bills get paid (it turns out that one of the leading reasons that doctors don’t get paid on time is that their patients don’t understand their bills).
In addition, we see huge potential in the data that CoPatient is accumulating from its activities. As they collect more and more de-identified information, they begin to see patterns that are otherwise difficult to discern, e.g., doctor practice habits, patterns of billing, referral patterns, etc… This kind of data is extremely valuable and has the potential to be richer than that provide by companies like Castlight (NASDAQ: CSLT).
Finally, we think that CoPatient has the potential to be a valuable platform to facilitate consumer healthcare financing programs. With an increased shift of healthcare costs to patients, the burden often requires financing options. In addition to reducing bills, CoPatient is well positioned to assist its customers with financing their healthcare costs.”
Speaking directly about the founding team, Donahue added:
“In addition, Katie Vahle and Rebecca Palm are a compelling duo and because of their experience at Athena, uniquely understood the pain point that CoPatient is trying to solve. We’re really excited to be investors in a company that has so many opportunities to grow and improve patients' (and even providers’) lives.”
Today, CoPatient is a team of fifteen, and growing (R&D, engineering and sales). Palm tells me there is a lot more to come, including a few major partnerships to be announced in the coming months.
Palm envisions CoPatient helping the average person become a smarter healthcare consumer. With additional services currently in private beta, the current model of disputing bills is really just the start for Palm and her team.
As Palm said, “this is an issue that everyone should care deeply about.” I believe people do – they just haven’t had a way to act on it… until now.
Josh Boyle is Director of Community & Marketing, VentureFizz. You can follow him on Twitter @jb_sid and keep up with his latest posts by signing up for the VentureFizz Weekly Email!