The Problem
The amount of debt accumulated across the country due to unpaid bills is estimated at about $40 billion.
The market for out-of-pocket medical payments is ready for an innovative solution. Providers and patients both suffer from excessive complexity and delays in the bill cycle. Today, it takes 3.3 bills for providers to receive complete payment from patients, costing providers $25B of revenue loss annually.
The payment management systems on the market – although wildly profitable and successful – only address the main needs of healthcare providers, not patients. The root cause of non-payment
Care4US tracks the billing process for users and their dependents, and offers both instant payment features and provider-approved installment plans. Users can monitor family plans and can keep track of pre-tax medical spending from the same place they pay medical bills. This enables users to manage their cash flow needs, pay providers on time, and prevent their credit score from taking a hit from unpaid bills.
Since the burden of non-payment lies with the patient, our product to explore product ideas that could facilitate greater bill payment rates and tackle the main reasons patients leave medical bills outstanding.
While providers receive more of the revenue previously lost to non-payments. Providers recover missed payments. Our consumer research revealed that consumers are receptive to managing out-of-pocket payments on their mobile devices.
Our Solution
Customer Segments
Our pilot market focuses on pediatrics and we plan to move into the natural extension of this consumer base by targeting the pre- and post-natal maternity market in a second pilot program. Pediatrics has a limited number of specialty referrals with a high frequency of visits, so it was selected as the beachhead. This market offers room to scale, without requiring the product to integrate with dozens of partner platforms for beta testing. Additionally, the positive response we received in our customer discovery has been even more notable now that we are re-examining our early findings targeting parents only.
Market Size
Of healthcare expenses, $170 billion is paid out-of pocket by patients. Annual out-of pocket medical spending in the pediatric sector is $2B+ in the NY market alone, with over $40B+ across the US. Each year, 40% of revenue is lost to nonpayment and on average only 15% gets recovered.
Business Model
Care4US is pre-revenue so our model still requires further validation. Our billing model is comprised of fees paid to process transactions that occur through the app (standard market rates $0.30 per transaction + 3.00%). On non-payment recovery, a sliding scale is charged in place of the 40% market rate used by collection agencies. We are in the process of examining the likely frequency of non-payment and how this would impact our profit assumptions and user acquisition targets.
At the copay stage, Care4US functions and charges are on par with the market standard rates for other billing platforms. It is only when patients miss bills that the Care4US payment recovery features are activated. We initially planned to undercut the 40% cut taken by traditional collection agents but some doctors have said they would be willing to pay a premium at or above the rate for early bill completion and not having to damage the doctor patient bond. By using Care4US first, the integrity of the doctor-patient bond isn’t put at risk by exposing the patient to negative credit impacts.
We present a solution to doctors that costs far less than standard collection agencies while leveraging the consumer acceptance to trigger behavior using our mobile application platform. It’s a win-win for both sides.
Road Map Accomplishment
- Product on-Demand Analysis
- Project Context and Time-Line Estimation
- Business Plan, model and Scopes
- Co-Founder Agreements
- Market Research Report
- Financial model and Projection for 5 Years
- Business Requirement Proposal
- Client and 3rd party service provider Contacts or Evaluation
- Solution Architecture and Platform Modules
- System Design and Data Flow Diagram
- APP Flow Chart and UI/UX Design
- Team Resource Recruitment
- Web Page XML Programing
- Application Backend Development
- Domain Hosting and Website Builds
- Product Brand Registration
- Others such as QA, UAT or Launch, client site release
Networking
We are open to meeting up to grab a coffee, or just to chat. We would really enjoy your feedback and insight into our venture and would be happy to discuss anything that you are currently working on to see if we can be of service!