Medical bills are one of the easiest payments to fall through the cracks — unlike a monthly bill, there’s rarely a reminder system, and between handling unexpected illness or injuries and coordinating with health insurance, you can easily forget. One in five Americans with medical insurance have unpaid, past-due medical bills — many reported that they were unaware of any medical debt until it impacted their credit score.
Scrubpay keeps you (and medical debt) in check by reminding you of balance owed via text or through their online portal — no more onsite trips to make payments or notices getting lost in the mail. The application helps partner hospitals and health clinics stay on top on payment collection and improve the overall patient experience by sending timely alerts.
CEO Justin Grant was baffled by the broken process of medical billing after growing up watching the industry (his dad was surgeon!) and working in healthcare.
“You go through to a doctor’s visit and you wait three months or so and all of a sudden you get a random bill in the mail. You don’t know if it’s your final bill, your first bill, or a credit notice saying that they’re going to ding your credit and you’ve gone to collections. It’s kind of an unpredictable area within healthcare,” says Grant.
Grant shares more about how he validated his idea with smaller health practices first, how Scrubpay can make a significant market impact in hospital closures, and his top advice for entrepreneurs.
What problem are you solving with Scrubpay?
I talked to CFOs of hospitals and they would say that patients aren’t paying. They were telling their billing office to go after them harder and call them in the evenings, basically annoy them into paying their bill.
After running the numbers, at any given hospital anywhere from 60 to 90 percent of people with self-pay balances don’t pay. It’s not necessarily their fault. It’s often the hospital’s fault, since they don’t provide a quick, simple, easy way to pay, and so that’s what we built. Instead of receiving a statement in the mail, you now have the ability to receive a text message, click on the link in the text message to take you directly to our application and pay your bill. It already has all the information, from what hospital you visited to how much you owe.
It is only patient responsibility, so it’s not convoluted with any insurance receivables or payment information. It really simplifies that process for both parties. The patient now has a quick and easy way to pay and the hospital is actually getting paid at a higher rate than they were before. With all the hospitals closing right now, it potentially could keep a hospital open.
How does Scrubpay integrate with hospitals?
Every practice management system, which a medical practice is run off of, has a statement file. That statement file gets all the open balances and they send that file usually to a vendor. They map that and print those statements. After all the insurance is adjudicated, the remaining balance drops the patient responsibility. They send out three statements over X amount of days, but those statements cost anywhere from a dollar to a dollar and forty cents with postage.
We take that same statement file that they’re already producing and they upload that to our system. We do everything on our backend, and we have an engine that text messages people periodically throughout the day when payment is due.
It’s a smart texting system with data to help us identify when we should be sending the text messages, when people like to receive them, when they want to pay their bills, etc. You never would think but Sunday night around 7pm is when we have found that most people like to pay their healthcare bills.
You collect payments, but you’re not a collection agency, correct?
We’re an extension or we’re a separate engine to help them collect patient responsibility dollars. We’re not the hospital. We’re an extension of the hospital legally, but we’re definitely not collections.
What’s your revenue model?
We actually are in the process of switching our model. Currently we’re doing a percentage of collections. It’s kind of a nebulous amount and it’s never fun to be in a business when you’re charging your customers an unknown amount. Now, we are changing it to a subscription fee. We’re doing 99 dollars per physician or per billing doctor to start.
Are you actively looking for funding?
We’re bootstrapped, funded by friends and family. Within the next six months we’ll be looking for funding. We’re at a point now where I don’t know that we would necessarily need it until we wanted to scale. The technology is all there. We’re just repositioning it a little bit, and then we’re going to go to the markets here in Atlanta and then potentially elsewhere.
Who are your clients right now and what’s the feedback?
We have a couple smaller practices, kind of our beta clients. We deliberately didn’t want to put it out there to many clients, because then if you have one problem, you have ten if you have ten clients.
Reporting on how much we collected, from whom, how out of date those balances were, and age reporting has been popular. We had a 93-year-old patient who paid through the system already. That’s one of people’s biggest trepidations with using it, is “Well, all my patients are older. What if they’re not going to use an iPhone to pay their bills?”
What’s your biggest advice for other entrepreneurs?
If you have an idea and you want to make it a business, somebody has done it before. Maybe not your exact idea, maybe it is a very similar or an almost-exact idea, but someone has been there before. I would always advise people, before they do anything (spend any money, raise any money, etc), go find that person who potentially has done it and have them advise. I waited way too long to get a confidant adviser involved. I just didn’t use him nearly enough, which was costly. I mean, it’s expensive mistakes and they’re unnecessary. Other entrepreneurs and advisors want to help you — you just need to reach out to them.