SM: How big is NaviNet? How many insurance companies are your clients, and how many people do they represent?
BW: There are over 380 insurance companies in the United States. We measure the size of an insurance company by the number of lives it insures. The smallest health plan in the country has 15,000 lives and the largest, like WellPoint, have millions. The Milliman Group did two studies on multi-payer portals. One was on the provider side. They said that multi-payer portals such as NaviNet save the doctor an average of $20 per patient, per visit. That is an average of $42,000 per year.
SM: Is your business model a per-transaction business model? Are you licensing a service or charging for each individual claim for which you facilitate the communication?
BW: We get 50% of our revenue from a SaaS model, and the remainder comes from a transactional model. We are starting to see more and more insurance companies preferring to go with a transaction-based model versus a SaaS-based model. An open report done by American Health Insurance Plans in May said that portals such as ours typically have a one-year ROI, and they save $2.65 per transaction thereafter. The savings for a plan with 500,000 lives is estimated between $14.5 million and $15 million a year.
SM: How many multi-payer portals are there?
BW: We are a real-time multi-payer portal. We run in all 50 states and three territories. There are 25 insurance plans that are involved in our portal who represent 114 million lives, including Medicare. There are companies out there that use an older model such as electronic data interchange (EDI) models, which are really batch-oriented companies. Those companies have been around many years. We are the only real-time portal running in the United States. We are the next generation of that technology.
SM: When you sell to insurance companies, do they feel as though you are the only option they have? Are you truly the only multi-payer insurance portal in America?
BW: The biggest competitor is the firms themselves. Their own IT shops are our biggest competitors. They are still trying to push a single-payer portal. When it comes to a multi-payer, real-time portal, we are the only one running in the United States. There are some companies that are trying to enter into our space, but they are in the EDI batch side of the house.
SM: From a provider’s point of view, it is very cumbersome to switch among nine or ten different services. It is much more convenient to work from an aggregated system.
TM: Absolutely. I will use this analogy to help you understand the EDI offering in this market. Imagine last year when you received your benefit book. Typically, these practice management systems will only pick four or five data elements out of that benefit book. There is a huge difference between being able to present five or six data fields inside a practice management system for all of the payers, which is how the EDI system works, and being able to present all data fields.
What we have done, and I truly believe that we are alone in this, is to allow each payer to present their full benefit book just as if it was their own Web site. When they work in NaviNet, they can put whatever information they want inside of NaviNet’s benefits screens. There is really nobody in the marketplace that does that.