Durham startup looks to launch health care benefits, cost estimates app

Sep. 25, 2013 @ 04:01 PM

Want to know how of the cost your insurance company will cover for an emergency care visit, or for a sick visit to your doctor?

Pretty soon, a Durham-based company will have an app for that.

Medlio, a start-up health care technology company, is working on a smart phone application that will act as a virtual insurance card for patients. It also will enerate estimates of the cost of seeing a particular doctor for a specific problem at the time of check-in to the doctor’s office.

However, it won’t allow consumers to shop around for health care based on price, said David Brooks, Medlio’s founder and CEO, said he thinks it would be irresponsible to publish lists of health care prices because price is not necessarily linked to quality of care. He also said consumers should consider customer service when choosing which provider to see.

“Until better, more comprehensive information is understood around quality (outcomes), access, and patient experience, price alone is not enough and could lead people to make bad decisions,” Brooks said in an email.

What the consumer app will do, Brooks said, is give information about their benefits and allow them to start a conversation with their doctors about cost.

“Medlio creates complete cost transparency so that providers and their patients can discuss cost-effective treatment options, which is critical as we increasingly transition to consumer-directed healthcare and risk-based payment models,” Brooks said.

And Brooks said that giving consumers an idea of what they might be paying for health care is important as more people are offered high-deductible health care plans, and end up paying more of their own health care costs.

“As consumers bear responsibility of their heath care costs, they need tools to help them be better consumers,” Brooks said.

According to a survey of employer-sponsored health benefits by the Kaiser Family Foundation and the Health Research & Education Trust, the “2013 Employer Health Benefits Survey,” covered workers face similar premium contributions and cost-sharing requirements this year compared to last year.

However, the share of workers enrolled in plans with a general annual deductible increased to 78 percent. Fifty-eight percent of covered workers at small firms with between three and 199 workers have deductibles of $1,000 or more, up from 49 percent last year.

Medlio is now part of Groundwork Labs. John Austin, Groundwork Labs’ director, said he believes that Medlio is a “very timely product” given the changes coming in health care. He said he expects it to be attractive for providers as well as for consumers.

“Perhaps in the future price comparison will be important, but there is so much information that needs to go into that decision that just having transparency today will be more compelling for many consumers,” he said in an email.

Alwyn Cassil, director of public affairs for the Washington, D.C.-based Center for Studying Health System Change, said there are Web sites out there now with price information, but they’re not necessarily specific to consumers’ health insurance plans. Some insurers also have online tools that allow members to see cost differences between providers.

However, Cassil said she believes that consumers have a “small incentive” to consider price because most people have set co-pays for visits. And consumers who have co-insurance, where they pay a percentage of the bill, have a slightly stronger incentive, she said, but “it gets blunted” when they reach their deductible.

 

How Medlio’s app will work

 

Medlio is looking to launch public testing in October of its consumer app, Brooks said. Ultimately at full roll-out, they’re planning to give consumers access to a certain number of benefit look-ups for free, he said, but they may add a charge for subsequent look-ups.

To get health insurance benefits information downloaded to the user’s phone, the user must enter in personal information including their name, insurance company, and insurance identification number, Brooks said.

Medlio is able to access benefits information through what he said is an online insurance information clearinghouse. It’s also used by doctors’ offices and other providers to look up benefits, he said.

To get the cost estimates, he said users must enter in the reason for their visit for the doctor, and the doctor’s office has to confirm the reason for the visit when the patient checks in, he said, using the program.

In order to generate that data, Medlio will need providers to sign up for the company’s program so they can get access to prices negotiated between the provider and the insurer, Brooks said.

In addition to the app for consumers, the company has started testing a web-based computer program for doctors and other providers. Among other services, Brooks said it helps estimate the cost of care for the providers. Testing is being done in a North Carolina office of an independent physician association, he said in an email.

What they will be generating are still cost estimates, as Brooks said they don’t know exactly how the provider will bill for a particular service.

Brooks said cost can also change if the doctor changes something during the visit, or needs something beyond the original scope.

“However, depending on the doctor's workflow, we offer the ability to capture those changes as they occur so the patient is notified, and hopefully involved in those decisions,” he said in an email.

Initially formed in January, the four-person company is now part of Groundwork Labs, a program that provides office space, mentorship and information for technology entrepreneurs.

The company has raised money from founders, friends and family, Brooks said, as well as through a business development program called DreamIt Health.

They traveled to Philadelphia for the four-month accelerator, finishing last month, he said.

On Tuesday, Brooks said the company will be doing a demonstration at a health care conference in Santa Clara, Calif., called the Health 2.0 Fall Conference. They’ll be one of 10 young health technology companies that will be doing back-to-back, minutes-long demos.