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Settling up to keep
healthcare healthy
PayMD’s patented technology
accelerates bill dispute resolution
By EMMA JOHNSON
Photos by KEELIN DALY
STAMFORD, Conn. – Hospitals can’t
survive or provide quality healthcare
if they cannot get paid. That’s why
PayMD makes good business sense,
says Robert Ballou, CEO of the parent company, Cybersettle.
PayMD is a patented secure payment platform that helps hospitals,
clinics and physician groups make
it easier for patients to settle their
portion of their medical bills. In the
United States, patient responsibility
for medical bills totals $700 billion
annually, yet just 16 percent of these
patients pay these bills, according to
one McKinsey & Co. report. “The potential marketplace for our services
is enormous – the size of the healthcare industry in this country is unfathomable,” Ballou says. “But failure
for patients to pay is a chronic and
life-threating problem for hospitals
and the communities they serve ... If
we can help hospitals recover patient
responsibility, we can help save patient lives.”
Cybersettle (www.cybersettle.com)
has been in business for 12 years,
building solutions that allow end users to negotiate the price of goods
and services, and settle bills. The third
line of business is revenue recovery –
‘The market is there. It is just a
matter of how fast we can effectively
and efficiently ramp up the business
to create profound value.’
CYBERSETTLE CEO ROBERT BALLOU
the technology upon which PayMD
was launched. In its dozen years, the
Stamford, Conn.,-based Cybersettle
has secured 23 patents, Ballou says.
But three years ago, a troubled Cybersettle sought the services of Spencer Trask. “Spencer Trask had the
foresight to see the potential of the
cyber-settlement business, and they
provided the financial and intellectual support to bring PayMD to market,” Ballou says.
“Without Spencer Trask, Cybersettle was on track to experience what
many good ideas experience in the
absence of strong execution: We
would have died on the vine.”
That is not to say that the company’s technology did not prove useful. New York City Comptroller John
C. Liu announced that Cybersettle’s
technology saved the city $94 million
between 2004 and 2009 by helping
to settle personal injury claims made
against the city. Cybersettle’s software
created an online, automated process
that replaced the old protocol of faceto-face and telephone meetings with
adjusters. Liu reported that claims
were settled faster, and at a fraction of
the cost per settlement. In fact, during
that five-year period, claims settled
using Cybersettle technology averaged just $9,000 per claim, compared
with nearly $28,000 per claim for
those settled without the technology.
Today, it is clear that Cybersettle is no longer at risk of dying on
any vine. PayMD is excelling, and
Cybersettle is thriving. In the two
months following its November 2012
launch, PayMD signed on six hospital
groups, which represent 4 percent of
the New York City-area market and
about $1 billion in patient responsibility revenue, Ballou says. In the 18
months leading up to January 2013,
the company doubled in size to 19
employees, and was on track to double again in the following 18 months.
Growth potential, Ballou says, is
enormous. Healthcare costs are,
too, and the trend is shifting toward more patient responsibility in
an effort to keep reins on employer-paid premiums. In the past two
years alone, the percentage of total
healthcare costs for which the patient is responsible jumped from 21
percent to 26 percent, or $700 billion in 2013, Ballou says, and that
figure is expected to balloon to
$1.6 trillion by 2017. These trends
only add to the pressure on healthcare groups to find a way to get patients to pay.
“This is the first time in my 35-year
business career that the potential
market has not been an issue,” Ballou says. “The market is there. It is
just a matter of how fast we can effectively and efficiently ramp up the
business to create profound value for
our clients and create a metric value
for our shareholders.”
PayMD’s value lies in its ability to
bridge the gap between the fact
that 98 percent of patients are both
willing and able to pay for some of
their out-of-pocket medical expenses, yet only about 16 percent of
patients ever pay at all. Those who
fail to settle their bills claim misunderstandings about what is owed,
forgetting, and a lack of payment options, among other reasons. “There
is general confusion about medical
bills,” Ballou says.
PayMD stands to bridge this significant gap by providing a user-friendly
way for healthcare providers to communicate with patients and provide
simple tools for them to pay their
portion of their medical bills.
Cybersettle CEO Robert Ballou checks in with Alan Hurwitz, chief operating
and financial officer. Cybersettle’s PayMD has signed six hospital groups as
new clients since November 2012.
Ninety-eight percent of patients
are both willing and able to pay for
some of their out-of-pocket medical
expenses, yet only about 16 percent
of patients ever pay at all.
Upon leaving the healthcare provider, patients are given a one-page client-branded document that is specific
to the patient’s experience, insurance
and other information.
“Research shows that the more you
give the patient the tools to pay when
they want, where they want and how
much they want, they are far more likely
to settle their obligation,” Ballou says.
This document clearly lays out how
much is owed, why, and how they
can pay. The patient is invited to log
in online to deal with their bill. There,
on a client-branded website, they can
chose to pay online, negotiate a lower
bill or agree to a payment plan.
“We’ve recently trademarked the
slogan, ‘We save hospitals that save
lives.’ The more we can help hospitals
recover revenue they are owed, the
better the chance that those hospitals
will be there to serve each and every
one of us when we need them.” ST