In a world where people can comparison-shop for everything from an apartment to toothpaste with a few taps on a screen, good luck finding how much a hip replacement or MRI will cost. And yet individuals are on the hook for a higher share of their medical bills as employers get tired of paying the tab and turn to healthcare plans with high deductibles.
Turns out, though, that there's an Expedia for healthcare, too. HealthEngine allows people to search online for a doctor or a procedure by price. In this case, there's a bonus: If they book a quote cheaper than the standard rate, patients pocket 60% of the savings, while their employer and HealthEngine split the rest.
Workers at the village of Orland Park, which is self-insured and assumes the financial risk of its employees, started using HealthEngine last year. Employees have used the site to book more than a dozen services, reducing their bills by $21,000, Village Manager Paul Grimes says. He estimates the savings will likely increase. “Now that it's the employees' money, they've got skin in the game,” he says.
Employees save an average $965 per booking, or 50% of the rate their insurer had negotiated with a doctor or facility for the service, says HealthEngine's founder and CEO, Dr. Jonathan Weiss.
Tech equipment seller CDW and Jewel-Osco parent Albertsons are among other clients.
Weiss, 42, who has a medical degree from the University of Chicago's Pritzker School of Medicine and an MBA from its Booth School of Business, is a serial entrepreneur. He launched HealthEngine in 2012 after spending more than a decade in England, where he launched Nations Healthcare, which grew to $200 million in annual revenue and was sold for an undisclosed amount to a company backed by Goldman Sachs and other investors.
He calls another startup he created, Endeavour Health, the precursor to HealthEngine. That business focused on the small percentage of people with private insurance in the U.K. and Ireland, saving customers and their employers money by having hospitals and other facilities compete for one fee for a bundle of services. He sold that company in 2011 for an undisclosed amount to private-equity investors.
Chicago-based HealthEngine, which is anticipating up to $9 million in revenue in 2016, has a searchable database with 300 of the most common procedures and their costs. The information comes from a variety of sources, including claims data from self-funded employers, physicians and the federal government's Centers for Medicare and Medicaid Services. The company also lets doctors and facilities create their own profiles; there are 1.2 million profiles so far.
People save money because doctors and facilities can see in real time how their rates compare to each other and bid against one another. “Transparency for us is the appetizer,” Weiss says. “We could show you're twice as expensive as the office down the street.”
