Blueprint For Saving 11 Billion Dollars In Healthcare Costs: MD On-Line CEO Bill Bartzak (Part 6)

SM: Where do you go from here? There are about 700,000 physicians in the United States, and you have reached about 35,000 of them. What percentage of that available market has a solution like yours?

BB: Most of them have practice management systems. The problem is, we know based on the information we receive from insurance companies that there are tens of thousands of doctors who are not submitting their claims electronically. In 1995, I thought that our window of opportunity was going to be about three years. Today, there are still 3 billion paper claims a year.

The opportunity exists for us to continue on our current path because we bring on between 400 and 600 new doctors’ offices every month. A lot of them use us as a free service, but the rest use us as a paid service.

SM: If you solidified deals with the practice management side, would that accelerate the process?

BB: It probably would, although it also presents an upselling opportunity. Our doctors are typically using older technology. Of the 400 to 600 offices that we sign up every month, half are using us for a data-entry product. They use us as an online claim form where they can put their information in and click “send.” That is where the opportunity is to upsell. That service does not offer an accounting package and all the other things that a doctor’s office needs.

SM: What are your next milestones?

BB: On the technology side, we are doing something that we do not see anyone else out there doing today. When somebody sends us a claim, we can automatically check the patient’s eligibility on the claim form in a real-time fashion with the insurance company. Assuming the person is eligible and we send the claim to the insurance company, we automatically check the status of the claim three or four days later.

If you think about the FedEx model of tracking transactions through the entire system, that is the way our system has evolved. We can track the entire life cycle of the claim in real time. We are moving forward on the practice management side as well. We are putting together a practice management system so that we can have a very stripped-down data-entry package and a normal data-entry package as well.

SM: It sounds as though your next strategic step is to have a practice management component so that you can upsell to the doctors’ offices. It also sounds like managing the claims process as an outsourced service is a reasonable extension of your business.

BB: It would make a lot of sense.

SM: After you raised your initial set of funds in 1995, did you have to put more money into the company?

BB: Additional funding came in through other angels. It was a total of another $3 million. After that we were at break even, so we did not need any more money.

SM: That is fantastic. Too many people are reliant on VC financing.

BB: I learned to start businesses based on their business value. We have always been under our expense lines.

SM: How many people do you have in the company now?

BB: We have 69 people in the company. We acquired a company last June in Connecticut called Medical Claim Corp. Our growth from 2008 to 2009 is 98%.

SM: You were about a $12 million company in 2009?

BB: Yes. The neat thing about this type of business is the profitability of the company. The profitability is at a point where the bulk of every new dollar is profit. This past year has been transformational.

This segment is part 6 in the series : Blueprint For Saving 11 Billion Dollars In Healthcare Costs: MD On-Line CEO Bill Bartzak
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