Jake Myers is all about the numbers. When he makes a decision, there’s usually a list of pros and cons. An array of percentages to compare. A side-by-side breakdown of all the facts, in a format that’s most easily read. So when he was considering relocating the startup he helped found from New York City to Cleveland, he, of course, deployed his best analytics.
It turns out, the move was a no brainer.
Not only has MedPilot, a healthcare tech startup, made Ohio its home since 2018 – it’s thriving there. Myers’ counterparts, Matt Buder Shapiro and Nate Spoden, are maybe a little less surprised. They are both Buckeye State natives (Myers originally hails from California). Sure, Cleveland is a major medical city, home to Cleveland Clinic and University Hospitals, a system that’s also routinely top-ranked. But no one would exactly consider it to be the next Silicon Valley.
That’s a mentality the trio is hoping to change.
“Our New York-based investors were like, ‘Hey, I think that’s a bad idea. The access to talent is low. The access to capital is low.’ We’ve seen the exact opposite,” Myers said. “We’ve gone from five employees to 40. We’ve gone from only taking New York dollars to being surrounding by great Cleveland and Ohio-based and Midwest-based firms. We did this a couple years ago, but today, more and more startups are seeing this, and it’s almost a blueprint that people are going to these secondary markets. We definitely think it’s the way to go.”
Buder Shapiro, Spoden and Myers all met while living in the Big Apple. Myers and Spoden had experience in healthcare, and Buder Shapiro in advertising and political media strategy. Together, they saw an opportunity to build a software solution that could help both healthcare providers and their patients, the latter of which who increasingly struggled to pay their bills amid a shift to higher-deductible health plans.
MedPilot, which officially launched at the end of 2014, is a patient financial engagement platform that helps individuals better understand those bills. The company balks at the industry standard – a series of monthly invoices sent via snail mail – and instead relies largely on emails and text messages headed with creative subject lines, like, “Rome wasn’t built in a day. Your medical bill doesn’t have to be paid in one either,” and “Best things in life are free! Unfortunately, medical bills are not. Let’s work together to take care of it” (although MedPilot can mail paper statements, too, if a provider chooses, as well as serve as a call center point of contact, for example).
Inside the platform, a patient can view digital statements, ask questions, pay or dispute their bills, update insurance information or even set up payment plans.
The idea is to send communication when a patient is most likely to read it. MedPilot’s platform is powered by artificial intelligence and machine learning – and millions of data points – so it can to tailor the content, frequency and message type. MedPilot’s software is white labeled, so a patient will only see their healthcare provider’s brand. Additionally, MedPilot can send appointment reminders, surveys and marketing notifications.
Physicians like it because it helps reduce cost. In 2017, the bill for healthcare-related paperwork in the U.S. topped $812 billion, and a patient still took, on average, about 64 days to pay.
Patients like it because they can more quickly navigate the payment process, and with greater satisfaction, especially if they have a clearer understanding of what they owe and why.
“Patients feel like there’s more transparency,” Spoden said. “And providers are able to collect more of their outstanding bills, which gives them revenue they need to continue to deliver patient care.”
The company relocated to Cleveland in 2018 as the idea gained ground and the guys saw a better way to grow their business. Since that date, MedPilot:
- Has added more than 35 employees
- Has increased its office space dramatically, from a 500-square-foot WeWork in New York, to a new 7,500-square-foot HQ that it hopes to finish later this year
- Has doubled revenue from 2018 to 2019. Myers expects that state to repeat in 2020
To date, MedPilot has helped over 1 million patients with a 97-percent satisfaction score. And in 2019, it started to shift its sales efforts. Previously, MedPilot largely targeted physician groups, but Spoden said the company is gaining much more traction going directly to third-party medical billers. Closing one medical billing client, for example, is the equivalent of closing 20 providers, he said. It’s obviously been a much easier way to scale.
“A lot of these third-party entities, these third-party billing companies, are very old school and have traditionally focused on the insurance side of the equation,” Buder Shapiro said. “But patients are now the largest [part] of the payer mix. They [the medical billing clients] see the value of a company that takes a truly holistic approach to working with patients. It has been very crucial for us.”
In February, the company closed a $1.5 million seed round, bringing MedPilot’s total funding to $3.6 million overall. MedPilot is further eying a Series A late this year. Among the most recent investors: JumpStart, a Cleveland nonprofit that provides funding, services and programming for area entrepreneurs; Jon Pinney, a local attorney; North Coast Angel Fund and Valley Growth Ventures; Wavemaker Three-Sixty Health, a Los Angeles-based early-stage venture capital firm; and Hudson River Capital Partners of New York.
Rem Harris, JumpStart’s senior partner of portfolio management, called MedPilot a great boomerang story for Cleveland, given Buder Shapiro and Spoden’s local ties. He said he’s excited to see the company continue to build out a team in Northeast Ohio, which has a rapidly growing healthcare IT sector.
“MedPilot is working to solve a big problem in a massive market. Delivering medical billing information in a way that is most convenient for the patient creates a less frustrating experience and actually reduces the time it takes for healthcare providers to get paid.”